Every few years, we see a movement come along that turns heads and opens wallets. With every movement, there are evangelists and there are skeptics. The evangelists tell you why you must adopt it today while the skeptics tell you why it’s a hoax.
Account Based Marketing (ABM) is all the buzz right now in B2B markets, but rather than convince or dissuade you from jumping on the bandwagon, I want to take a closer look at what it is, who it’s for, and, as importantly, who it’s not for. After reading this post, you'll be able to determine if ABM is right for you.
Many definitions for Account Based Marketing are circulating, so to start, it’s important to share how we define it.
"Without Sales and Marketing alignment, ABM will fail."
A Clear Definition of Account Based Marketing
Account Based Marketing is a strategic approach that coordinates personalized marketing and sales efforts to open doors and deepen engagement at specific accounts.
Let’s examine that a little closer:
- A strategic approach: ABM is a fundamentally different way of thinking about running the revenue side of the business. It’s not a tactic or campaign, it’s a business-wide initiative that starts from the top.
- That coordinates personalized marketing and sales efforts: Two points to make here. First, ABM moves the focus away from quantity and puts it on quality, allowing you to deliver a more personalized message. Second, though it’s call Account Based Marketing, it’s not just for marketing, but for sales as well. Without alignment, ABM will fail. That’s why at Engagio, we call it Account Based Everything.
- Open doors and deepen engagement: In ABM, the focus is not only on landing new accounts, but also on expanding existing relationships. As you move up market, more and more revenue will come from existing customers.
- At specific accounts: At its core, ABM is about focusing on a fewer number of “target” accounts that are higher value and strategically chosen.
One of the sexiest promises of ABM is bigger deals, but there’s more to it than just that. To understand this fundamental shift in the way businesses go to market, we have to understand the cause. According to the Corporate Executive Board, there are several factors responsible for this change in the way B2B buying decisions take place.
Businesses today have a higher aversion to risk, which means that even individuals who possess significant authority still have to build consensus to make a purchase, thus resulting in more decision-makers at the table. Furthermore, as technology has evolved, technological complexity demands the involvement of more departments, specifically IT, operations, and even procurement. Lastly, globalization came with more stringent regulatory requirements and information protocols from legal and compliance.
"You can’t catch a whale with the same tactics you use to catch a fish."
What Kind of Company Will Benefit from Account Based Marketing?
Sounds like a daunting task? That’s why you can't take it lightly. Before jumping into implementing ABM, let’s explore when it's the right strategy.
When you’re trying to go up-market and close bigger deals. I’m not talking about deals that are 5% or 10% larger, I’m talking about deals that are 5x to 10x larger. These big deals don’t just justify an account-based effort, they demand it. You can’t catch a whale with the same tools and tactics you use to catch a fish.
Enterprise deals (think $100k average contract value and up) require ABM, and it’s a good idea for $50-100k deals as well. When you’re around $20k, you should proceed with caution.
When you have identified your ideal customer and have stable conversions in the funnel. Selecting your target accounts is the most important part of ABM, so if you’re just guessing which accounts you should be going after and where you have the best chance of winning (industry, vertical, size, etc.), you’re setting yourself up for failure. This requires efficiency in your process, predictable funnel metrics, and stable economics. Only then can you use ABM to scale.
When you’re selling across disciplines. As buying teams are getting bigger, they can kill a deal faster than you can order your morning espresso. The more people involved in making or influencing a purchase, the more you need a strategic, cross-disciplinary approach.
When inbound isn’t enough. “Content Shock” and noise in the market has lead to declining effectiveness of inbound tactics. In B2B markets, you cannot simply wait for the big fish to swim into your net. You have to balance your approach with outbound tactics to go after the whale you want.
"As sexy and shiny as ABM is, it’s not for everyone."
What Kind of Company Will NOT Benefit from Account Based Marketing?
As sexy and shiny as ABM is, it’s not for everyone. There are some every compelling cases where, if you try to implement ABM, you’ll be setting yourself up for catastrophic failure.
If you haven’t found product-market-fit. ABM is not a strategy for early stage companies trying to figure out their product or their market. Companies just starting out need to be talking to more people, not less. You need more data to support your ideal customer profile and the best way to go to market. If you’ve never gone fishing before, why would you start with trying to catch a whale?
If you don’t have a predictable pipeline. This strategic approach is not something that you can try for a few weeks. In the traditional model, pipeline is determined after the first discovery call. If you can’t accurately predict your pipeline, you’re fishing blind. In an account-based approach, the pipeline from a target account is part of qualifying criteria. You have fewer at bats, so you can’t take the risk (sorry to mix metaphors).
If you can’t move up-market. Not all companies can handle whale accounts. The deals you close affect the entire company. Hunting whale doesn’t just require larger sales and marketing teams, but it also requires a larger organization as a whole to support the whale. If you bring on a new logo that is 10x the size you’re use to, you need to make sure you have the infrastructure to onboard and support the new whale.
Don't take this decision lightly. It’s a big endeavor that can have a major impact on a company’s growth trajectory. Before you commit to ABM, sit down with your leadership team and determine if it makes sense.
If you’ve decided that Account Based Marketing will work for you, and you’re ready to tackle it head on, check out Engagio’s Clear and Complete Guide to Account Based Marketing.
Brandon Redlinger is the Director of Growth at Engagio, the Account Based Marketing and Sales platform that enables teams to measure account engagement and orchestrate human connections at scale. He's passionate about the intersection between tech and psychology, especially as it applies to growing businesses.