Challenge: Is ABM Right for My organization?
Account Based Marketing (ABM) is the rage. All the ‘cool marketers’ are doing this, new martec companies have been formed with ABM solutions, and other martec companies are repositioning their offerings as ABM. We all want new customer accounts and we also want more of our successful customers to grow and advocate on our behalf. But this doesn’t necessarily mean ABM is the right strategy for your organization. After spending significant time & effort into ABM, I thought it would be worthwhile to share high level thoughts on whether this makes sense for your organization.
According to Wikipedia,
“Account-based marketing (ABM), also known as key account marketing, is a strategic approach to business marketing in which an organization considers and communicates with individual prospect or customer accounts as markets of one. Account based marketing is typically employed in enterprise level sales organizations.”
Put a different way, ABM is about aligning sales and marketing with the purpose of targeting a small set of highly valuable accounts with a customized approach. In my experience, this means between 20 and 200 customer accounts each with a deal or lifetime value of $100K+. In ABM, both marketing and sales dedicate a disproportionate share of time and budget to accounts that will pay the largest dividends. This makes sense economically – and a company can justify the added expense (hard and soft dollars) based on larger returns from these customers’ initial and subsequent purchases.
But I’m wary of articles describing ‘how to scale ABM’ because it’s difficult to differentiate large scale ABM from Target Account Marketing or Industry/Vertical Marketing. Let’s consider the differences between ABM and general best practices of persona and customer journey marketing. In well-formulated Target Account Marketing, customized content is delivered at scale via email, phone, web, social and postal. This content may be customized to persona, level, role, industry and more. But I would not call this ABM, which is specific pieces of content, specialized events and other materials created for a single account or a very small set of accounts. Generally speaking, to ‘scale’ ABM means that you forfeit 1-1 customized programs.
How to decide – should you pursue ABM or more traditional Target Account Marketing? Let the data decide. Run the economics of additional ABM labor and program costs against the expected increased revenue from that set of accounts and compare this ROI to your next best set of marketing programs. Put slightly differently, consider and analyze your marketing programs as a set of investments and select based on the best performance, whether ABM or another program.
You’ll ask several questions along the way, for instance:
- Are there relatively few accounts that will drive a large amount of revenue?
- Would specialized, focused attention (ABM) to these accounts drive more deals or shorter deal cycles?
- Could you move customers to more quickly adopt your product and therefore drive future revenues with ABM?
You must also assess your current systems and the level to which you can provide Named Account Marketing – or customization at scale. Current Marketing Automation, CRM and third party systems allow for sophisticated engagement based on time and activity by the account. A fully deployed Named Account Marketing program may require account-based advertising programs, website customization, dynamic nurture content, targeted contact acquisition, custom field events/programs, direct mailers and more. Do your current systems allow you to provide the level of customization your accounts need without the added time and expense of ABM?
The bottom line is that you need a clear understanding of revenue objectives, how marketing and sales together will drive this revenue, and the economics of these programs.
Lesson: ABM can be a great fit if you are willing to spend more time and budget per closed-won deal at a small number of accounts compared to more traditional Target Account Marketing programs.
Credits: Here’s a big shout out to the marketing team at Alteryx for their work with me on our journey to ABM. I’d also like to thank Jon Miller and the Engagio team for their thorough work in creating seminal ABM materials.