By Steve Robins, Solution Marketing Strategies
Account-based marketing, a term with hype in the industry, promises to coordinate marketing across an entire account to increase sales success. But is it right for your company?
The sales analytics company InsightSquared had a growing problem. Like many B2B companies, its marketing model was fueled by a combination of inbound and outbound marketing.
Its inbound marketing strategy was designed to drive user traffic back to the site via compelling content. Its outbound marketing strategy used more traditional communication tactics to reach consumers via email.
For the growing company, inbound drove some demand, but it took too long to kick in and wasn’t sufficient on its own. Outbound email wasn’t working either: Each new name the company acquired was of lesser quality than the one that preceded it. They were running out of good names to market to. “The results weren’t worth the effort,” said Joe Chernov, VP of marketing at InsightSquared. “That led us to change our marketing model.”
As the company considered its options, it looked at account-based marketing (ABM), which coordinates marketing and sales activities on targeted accounts. ABM moves away from mass marketing to make marketing tactics more efficient by targeting the accounts most likely to close. Where traditional marketing assailed a mass audience with generic messages, ABM tailors messaging to each targeted prospect account, groups of accounts or personas within accounts.
The sales team was already moving toward selling to accounts, rather than to individuals. And, as Chernov said, the company was beginning to “narrow the aperture” in terms of the types of companies they were targeting. Chernov said he believes that ABM is a better fit for companies with a more targeted, addressable market and a higher average annual contract value (ACV).
As the company moved toward a more targeted, account focus, ABM made sense while they waited for the benefits of inbound to kick in. While continuing with inbound, InsightSquared decided to replace outbound marketing with account-based marketing.
The company has developed several innovative campaigns to increase engagement with target accounts. In one, they ask prospects at venture capital-backed startups if they use the same metrics that their VCs expect them to use. Another campaign offers customized Nike sneakers to previous InsightSquared users who have moved to other companies, but have not yet started to use its product in their new jobs. The campaign provides several opportunities for sales to check in with a client to see whether the client received items such as the postcard or sneakers.
So far, the blended inbound-ABM model is working at InsightSquared. Indeed, B2B research firm Sirius Decisions reported that 92% of B2B companies said that account-based marketing was “extremely” or “very” important to its marketing efforts in 2015. There’s a lot of hype around ABM, but will it work for your company? It depends.
Many B2B marketers are focused on generating leads, or even marketing-qualified leads. In many cases, this works fine — especially when the target market is large, the average deal size is low, the sales cycle is short and the number of influencers in a deal is low. But if your target market is narrower, your deal sizes are larger, your sales cycles extend over months instead of weeks and the number of influencers is not one or two, but 10 or more, then lead-centric demand generation is less likely to work for your organization. Instead of marketing to individual people — that is, leads — you may need to market in a more coordinated fashion to an entire account comprised of multiple people. Account-based marketing helps you to do just that.
Jon Miller, co-founder of ABM firm Engagio, is a leader in the account-based marketing space. Speaking at the MarketingProfs B2B Forum in November, Miller defined account-based marketing as “a strategic approach that coordinates personalized marketing and sales efforts to open doors and deepen engagement at specific accounts.”
Building an account-based marketing strategy
As mentioned previously, ABM is not for every company. But if you have determined that ABM belongs in your marketing and sales strategy, you can approach it in different ways. In all cases, marketing and sales must work closely for ABM to work. Some companies start small and have sales drive ABM account selection. Others run marketing campaigns aimed at building out all accounts. Still, others run highly personalized, account-specific, multi-touch campaigns targeted not only at accounts, but also at the individual personas within the account. Some use ABM in concert with other strategies, such as inbound marketing, traditional demand generation and awareness building.
Regardless of which approach you use, here’s a snapshot of the basic steps to creating an account-based marketing program.
1. Identify target segments and ideal customer profiles. Take a close look at which types of organizations have purchased your products or services, your future ambitions and the market research you’ve already conducted. Use those factors to determine the optimal target markets, industries, segments or functions and associated personas for your offering. In other words, determine what types of organizations you plan to sell to. Include a model of your ideal customer profile, the “perfect” prospect account that would be most likely to buy.
Work closely with sales to identify target accounts based on a combination of sales input, third-party databases and predictive analytics.
2. Identify target accounts. Work closely with sales to identify target accounts based on a combination of sales input, third-party databases and predictive analytics that determine the specific accounts most likely to buy. Be prepared to commit to the target account list: Miller said that in most cases, you should plan to change no more than 25% of accounts from quarter to quarter. Too much churn wastes the marketing and sales departments’ time and money.
3. Map leads and contacts to accounts. Use existing or external databases and tools to map leads and contacts to accounts. You will be marketing to many, if not all, of these people.
4. Develop account profiles. Develop complete profiles for each target account: their top business initiatives, challenges and goals. These insights drive how you market to the account.
5. Determine the strategy you’ll use for a given account. Map account profiles to standard or customized strategies that incorporate your company’s products, messages, marketing offers and sales tactics. You may or may not choose to customize specific strategies for each account.
6. Execute marketing campaigns. Run specific, targeted and customized marketing campaigns based on strategies and directed at each of the personas you need to reach in a given company. Use different messages, offers and channels for different personas.
7. Establish an account-handling process. Determine how marketing and sales will qualify and manage accounts. Some marketing organizations will hold on to accounts until they achieve sufficient engagement to become marketing qualified accounts (MQAs), while others will share accounts with sales immediately. InsightSquared uses Infer for predictive analytics, and is experimenting with its account-handling. “We’re testing thresholds,” Chernov said. “We’re exploring what’s more valuable: fewer contacts with deeper engagement, or more contacts with lighter engagement. We’re going to have different engagement thresholds for different Infer fit scores. That’s to say, the better the fit score, the lower the engagement thresholds we’ll require for MQAs.”
8. Measure, measure, measure. With ABM, the key marketing metrics shift from new lead sourcing to deal influencing. Miller recommended focusing on coverage, awareness, engagement, reach and deal influence that answer these questions:
Do you have sufficient data and contacts for target accounts?
How aware are target accounts of your company, products and services?
Are the right people within the accounts engaging with your company, and is engagement increasing over time?
Are marketing programs reaching the right accounts?
Are ABM tactics improving deal velocity, win rates, account retention and other deal metrics?
Successful ABM takes work, and just like any modern marketing approach, ABM is not for all companies. It depends on whom you’re selling to, average deal size and other factors. Don’t just jump on the bandwagon because ABM is the next new approach out there.
ABM is rapidly changing. Expect changes as new approaches and innovative technologies emerge. Change provides opportunity for your company to leapfrog your competition — but it also increases risk.
More content, more offers. You may need to create more content and offers for different accounts and personas, which creates more work for marketing.
Orchestration across the account. It’s fair to say that ABM is more complicated than lead-focused marketing. With ABM, you need to closely orchestrate what happens across the account. That means you will need to have very clean account and contact records. For example, in Salesforce CRM, you need to avoid account duplication, and clearly link contacts and leads to account records.
Sales and marketing alignment. Sales and marketing should already be working closely before you implement ABM, which will fail if sales and marketing aren’t aligned.
A new mind-set for marketers. ABM requires a different mind-set for many marketers, more closely aligned to sales success than creating new leads. Expect to reset marketers’ expectations and align marketing compensation, such as performance bonuses to ABM.
What do you think? Is ABM right for your company? What opportunities and challenges do you foresee with ABM?