10 Things You Need to Know About Account-Based Marketing
Account-based marketing (ABM) is a big deal. It seems as though it’s being mentioned on every webinar, at every marketing conference, and in all major marketing strategy discussions. But despite all of the hype surrounding account-based marketing, only 43% of people polled have a clear definition of what is ABM!
Account-based marketing, at its most basic, makes an account (rather than an individual lead) the focus of marketing and sales efforts. ABM relies on data analysis to pinpoint the correct accounts to target; leverages research to find the correct cadre of contacts inside an account; and uses targeted, personalized, timed communications to engage those contacts.
While the buzz is great, and we personally think that ABM is a fantastic strategy for scalable growth, there seems to be an overabundance of information about ABM floating around. So much information, in fact, that marketers aren’t able to fully digest the principles and benefits of an account-based marketing strategy. To help cut through the ABM noise, we’ve compiled a list of 10 of the most important things to know about account-based marketing:
1. Account-Based Marketing Helps to Loop in All Decision Makers
On average, every purchase now requires 5.4 people to formally sign off on. This means that involving all parties from the very beginning is crucial. Every time an additional person is added to the decision making team, your sales cycle lengthens. (Imagine everyone is ready to sign, and then a VP joins the buying team and you have to begin at the beginning with that person.) When you target an account, rather than an individual, you’re able to close deals more quickly by addressing all decision makers from the beginning of the buyer’s journey.
2. ABM = Increased ROI
It’s no secret that marketers are seeing incredible return from account-based marketing. In fact, 80% of marketers who measure ROI say that ABM initiatives outperform other marketing investment. And what’s more, 60% of those who have used ABM for at least a year report a revenue increase of at least 10%,and 19% report a revenue impact of 30% or greater.
At the end of the day, marketers not only want to see organizational growth, but they want to be able to demonstrate real value from their efforts. ABM not only helps companies generate more revenue, it ties marketing directly to closed deals and revenue. In fact, companies using ABM generate 200% more revenue for their marketing efforts.
3. ABM = Increased Contract Value
Getting customers in the door is great, but it’s not the be-all, end-all. A customer who signs a one-year, $10,000 contract, and cost $1,000 to acquire gives you a $9,000 gross return. But spending $1,000 for a customer who signs an $8,000/year, 5-year contract will yield much higher returns.
ABM has proven to significantly increase deal sizes by focusing on customers who are most likely to be successful with your product or service, which in turn means they’re more likely to remain your customer. In fact, contract value for ABM-targeted accounts increases an average of 40% for mid-market accounts and 35% for enterprise. Those numbers can easily result in immense growth for your organization, without spending more money on acquisition.
4. ABM is Gaining Steam, Quickly
ABM is much more than just a buzzword, it’s being implemented by some of the largest and fastest growing organizations in the world. Over 52% of companies say they currently have ABM pilot programs in place, and 83% of ABM testers have plans to increase their usage over the next year.
5. ABM is Not Just For Enterprise Anymore
In the past, account-based marketing was a tedious, time consuming, manual process. It was really a solution only for organizations that had abundant resources and the stability to test new marketing strategies. Today, the basic process remains much the same, but technology has changed the labor equation, making ABM practical for any company that already uses marketing technology well. If you’re regularly using marketing automation and a CRM, you already have the tools and technology you need to get started with an ABM strategy. While large companies are currently the heaviest users of ABM, small companies are the most aggressive testers.
6. ABM = Increased Engagement
A whopping 83% of those using ABM report that increased engagement with target accounts is the top reported benefit – and that’s a big deal.
While lead generation is imperative to a business, the next step in getting your leads to convert into paying customers is encouraging leads to engage with your brand. Solid lead engagement requires knowledge about your buyer, an understanding of their needs and wants, and a marketing strategy that plays to that knowledge. The personalization aspect of an ABM strategy allows you to speak directly to your prospects with a tailored message, increasing the likelihood of a positive response.
7. ABM = Strengthened Retention + Expansion
Customer retention is another incredibly important metric for success. We’ve all heard the saying, “it’s much easier to retain an existing customer than it is to acquire a new one” – and it’s true. According to Invesp, acquiring a new customer is five times as expensive as retaining an existing customer.
Research shows that 84% of companies believe that ABM provides significant benefits for retaining and expanding current client relationships. New customer acquisition is expensive, and if not done right, can lead to high churn rates (“sloppy growth”). Instead, investing in keeping your customers will deliver a steady stream of reliable revenue.
8. ABM Improves Consistency
On average, a B2B customer will use 6 interaction channels (e.g. ads, email, phone, etc.), and 65% are frustrated by the inconsistency of the experience. ABM can help by providing a consistent experience across all channels of communication to each person in a targeted account. As Jake Sorfoman of Gartner notes in this blog post, In Customer Experience, Consistency is the New Delight: “Consistency is often compromised when good intentions work at cross purposes.” Account-based marketing helps you keep everyone’s purposes lined up and moving forward.
9. ABM Helps with Departmental Alignment
Most organizations struggle with sales and marketing alignment. However, according to one study, organizations with tightly aligned sales and marketing functions experience 36% higher customer retention rates and 38% higher sales win rates. In a recent survey, 91% of those with an ABM program in place said that they were “tightly” or “somewhat or moderately” aligned with sales. This is no coincidence. Account-based marketing helps organizations improve communications between departments by focusing on common goals, values, and metrics, such as defining the ideal customer profile.
A successful account-based marketing strategy delivers high-quality leads to sales by targeting accounts have already been prequalified and deemed to be a good fit. ABM focuses on quality, rather than quantity, allowing sales to spend less time qualifying leads and more time selling – to companies who are likelier to buy, and likelier to become excellent customers.
10. Marketing Automation is A Key Tool for ABM
Along with capturing data and putting it to work, automation lets you create a process and then set it to repeat at scale, without additional labor. The top benefits that marketers see from combining marketing automation with an account-based marketing strategy are:
- Effectively linking buyer behaviors and data across contacts for a unified account view
- Automatically scoring accounts and triggering campaigns and workflows inside and outside of the inbox
- Precisely targeting all decision makers within an account and delivering a unified experience across the organization
With the right strategy and the right technology to carry it out, ABM will support you in all aspects as you balance your strategy among brand awareness, demand generation, and customer retention and expansion. Download our free eBook to learn more about account-based marketing.