Account Based Marketing – an alternative to Lead Generation, or a complement?
Account Based Marketing can be described as an approach to B2B marketing that is an alternative to Demand Gen and Lead Generation. Put simply, it is marketing built around key accounts – a communication strategy aimed at precisely selected recipients (unlike Demand Generation, where the audience is not defined).
Account Based Marketing differs from traditional marketing methods by combining elements of marketing and sales. Communication within ABM is as personalised and direct as if it were run by a salesperson, and it is addressed to a specifically identified, rather than anonymous, group of recipients.
For this approach to be effective, marketing and sales need to work together closely, which strengthens the synergy between them. More and more often, companies merge these two areas into a single department or put them under shared leadership, which improves internal communication and the effectiveness of their activities.
Why consider ABM as a strategic B2B marketing tool?
- Using ABM can increase marketing ROI by as much as 208% [1].
- ABM is a strategy not only for acquiring new customers, but also for growing existing ones.
- Marketing and sales working together can increase deal closing rates by as much as 67% [2].
These are just a few figures that show how effective this strategy is. However, ABM brings not only benefits, but also challenges and costs.
Challenges and requirements: knowledge, strategy, collaboration
One of the key challenges in implementing ABM is effective collaboration between marketing and sales. It is their consistent activities, aimed at creating a uniform recipient experience in line with the adopted strategy, that largely determine how effective ABM will be. That is why implementing this method requires not only the involvement of marketing, but also a full understanding of the goals and how they are delivered across the entire organisation.
ABM also requires extensive knowledge about your customers or prospects in order to create personalised communication. This may mean research or gathering feedback from people already involved in working with these accounts, but above all it means a constant exchange of information within the organisation. A truism, stating the obvious? Our experience shows that nothing could be further from the truth. Knowledge in organisations is often siloed – teams do not share it with others.
ABM also requires a precisely developed strategy and detailed plans, which means a greater initial investment in building the concept. A long-term, consistent approach is also key, and it ultimately translates into more effective activities.
This is why ABM works particularly well in companies offering B2B products and services, where transactions and/or customer lifetime value are high. It usually also means a long sales cycle, which ABM can support as well, and the need to build deep relationships with the customer – both before the first contract and throughout the customer lifecycle.
Three levels of ABM – one to one, one to few, one to many
One-to-one marketing
This form focuses on a single customer whose needs and expectations are analysed in detail and form the basis of all communication. The goal is to tailor the offer so that it matches their requirements as closely as possible. It is worth emphasising that this customer may be represented by more than one person – several company representatives are often involved in the decision-making process. This method, known as strategic ABM or one-to-one ABM, requires intensive analysis of customer data, resulting in a purpose-built marketing strategy.
One-to-few marketing
This type of ABM focuses on a smaller group of prospects or existing customers who share common characteristics, such as industry or company size, and have similar needs or goals. Communication is tailored to the group, but personalised individually wherever possible. This version of ABM is known as ABM Lite or One-to-Few ABM.
Programmatic ABM, or one-to-many ABM
The last form covers a broad audience, sometimes numbering in the thousands, where communication is the least personalised. Despite potentially lower conversion, the large scale can make up for it in effectiveness. Programmatic ABM is also used in specific B2C situations, especially for luxury products with high transaction value and margins, where the audience is relatively homogeneous.
ABM as the future of B2B marketing
Many forecasts see ABM as the future of B2B marketing, especially in mixed models where, together with Demand Gen and Lead Gen, it forms an integral part of the marketing strategy of companies selling their products and services to other businesses.
It forces teams to integrate more closely and share information. It is based on knowledge and precise communication. It is the opposite of the spray & pray approach. Feedback gathered from the market “along the way” often makes it possible to improve the product (not just the offer) and, as a result, achieve a better product–market fit.
Not every organisation can use ABM effectively, and applying it does not always guarantee success. However, when it is well chosen and well implemented, it can deliver impressive results in the long run. An additional benefit in many organisations is developing a shared goal and a shared language between the product, marketing and sales departments.
Key Takeaways
- ABM is a B2B marketing strategy in which activities are precisely targeted at selected customers.
- It combines marketing and sales, which makes activities more effective and allows for better budget management.
- It requires in-depth customer analysis, personalised communication and a long-term strategy.
- It works particularly well in B2B companies with a long sales cycle and high customer value.
- ABM comes in three forms: one-to-one, one-to-few and one-to-many – they differ in the degree of personalisation and the scale of activities.
- It replaces the spray & pray approach, focusing on precise targeting and building long-term relationships.
- It can increase marketing ROI by up to 208%, while collaboration between marketing and sales can raise deal closing rates by 67%.
- ABM is the future of B2B marketing, often combined with Demand Gen and Lead Gen as part of a comprehensive strategy.
- It is not for every organisation, but when implemented properly it can significantly increase the effectiveness of your activities.
Sources:
[1] Two Great Tactics That Work Great Together, B2B Social Selling and ABM: LinkedIn’s Ty Heath on Marketing Smarts [Podcast], https://www.marketingprofs.com/podcasts/2019/41861/b2b-abm-ty-heath-marketing-smarts-podcast
[2] Marketo and Reach Force
