Account Based Marketing – Practical Strategies for B2B Technology Companies

Three Factors that Jeopardize Outbound Program Results

Challenge: Identifying Personas Within Buying Centers is Difficult

I had a brainstorm last week that I believe will lead to more productive outbound programs by identifying a problem inherent in many Account Based Marketing (ABM) programs. In sum, we need to improve how we develop our target buyers at the early stage of program launch. Since this is a new insight for me, this post focuses more on diagnosing he problem rather than recommending solutions. Have you found a better way? Love to hear your thoughts.

We must address several layers of issues to accurately target prospects in a scalable way providing the foundation for outbound/ABM programs. These layers act like concentric circles to get to the ideal program target list. Here are a set of three ‘formulas’ or reasons that describe the top three challenges:

Because:

ABM ≠ Buying Center

AND

Buying Center ≠ Persona

AND

Contacts ≠ Updated

Therefore

ABM ≠ $ROI Potential$

Let me explain.

First, we all love Account Based Marketing and understand that greater customization and effort focused on a limited set of accounts who represent your ideal customer will deliver higher conversion rates. However, when targeting enterprise accounts, there are different buying centers. More specifically, your offering may address the needs of and be purchased by multiple departments, so targeting a ‘company’ does not sufficiently address the buying center because there are actually multiple buying centers. For example, if you sell to developers, your target account many have many different groups of developers who will make different purchase decisions. And this raises further questions. Do these different departments (buying centers) have the same needs, pain points and interests? Do your value proposition, primary contacts and other key elements change across every buying center? If so, then many ABM programs may be missing the mark by not tailoring to a specific buying center within a target account. Factor #1: ABM ≠ Buying Center.

As we dig further into our outbound programs, the buyers are often not in the same department. The personas leading the purchase may be part of one department but in most cases there are personas from different departments involved in the buying decision. To accurately target an ‘Buying Center’, your programs need to consider all of the different contacts associated with the buying center (the collective group of people responsible for making the purchase decision). In many outbound/ABM programs, contacts are selected because they fit key personas but their position in the organization may not be identified in terms of how they fit within the buying center. Factor #2: Buying Center ≠ Persona.

Finally, the targets of our programs often shift jobs — up to 20% of contact details may change every year. While many organizations have deployed CRM account alignment solutions (DiscoverOrg, DataFox, D&B, …), few automatically update contact information. As contact take on new roles/responsibilities and as contacts change jobs, is your database staying current? Likely not. (Personal note — I would love to a cloud solution that automatically updated contact details as they change) Factor #3: frequently Contacts ≠ Updated.

While ABM provides a mechanism for better account and contact selection for outbound programs, there remains a huge gap between this method and how internal enterprise B2B purchase decisions are made. Therefore, your ABM may be delivering less revenue than it could if the programs were more carefully targeted. Clearly there are major gaps in our ability to map organizational buying decisions to a level where our systems can help us execute these programs at scale. That’s the bad news — but realizing this gap is the first step to designing better processes.

If we, as a marketing department, take our ABM efforts to the next level with tailored targeting processes, we will be more closely aligned with the actual purchase process. For now this starts with a careful examination of the purchase process, personas, target accounts and more, in order to develop a strategy with available tools. As we identify target accounts, we must identify all of the personas across the organization associated with the buying decision to increase success rates. We will need to lean harder on our tech stack providers to give us greater insights into these areas for better and easier segmentation at scale. In the end, this will be an optimization of outbound programs to have more precision and greater results.

Lesson: If we take the time to identify and target all of the contacts associated with organization buying centers, our outbound campaigns will be more productive and drive greater revenue.

Eliminating Leads: Migrating CRM to Support Account Based Marketing

Orchestration

Here is a recent presentation I gave at the OpStars event alongside Dreamforce. It describes the motivation behind eliminating the Lead object in CRM to support ABM and gives the experience of one startup making the transition.

Moving to Account Based Marketing – OpStars Event Presentation

The Road to ABM: Baby Steps Not Leaps

Challenge: To Cutover Hard or Migrate Gradually – that is the Question.

During a recent conversation about migrating from traditional inbound marketing to Account Based Marketing (ABM), a colleague noted that the optimal method was a hard cutover but that this would put a serious hole in his pipeline. He reasoned that this would entail a complete shift in targeting, team capabilities, tools, programs and more. Given that there is a certain sales cycle associated with driving Leads and Opportunities in this fashion, he believed this would blow a hole in the pipeline for six to twelve months due to the product sales cycle. This colleague is super smart leader with deep demand gen experience. However, I disagree agree with this assessment and I have yet to see this method in practice so I thought I would share my thoughts with my network for feedback.

My experience for over 20 years has been as a content and funnel marketer building programs to scale inbound leads and automate qualification into the sales funnel (see my recent blog on ‘continuous pipeline’). The concept of ABM is compelling, with benefits including increased focus, activity orchestration and higher conversion rates due to customized messaging targeting specific accounts and personas. Since I have also seen funnel conversion rates drop over the last five to ten years, ABM is a natural solution. However, in my experience at several different companies, the migration to ABM was a gradual process, not a hard cutover.

At one company where the focus was to drive end user trials in a land-and-expand model, we developed a target Account list based on the past customer lifetime value (LTV) selecting a prospect list most likely not only to land but also to expand. These prospects were run through a series of phone, email and postal outreach programs. The results were quickly positive resulting in significant pipeline in just two to three months. Gradually we added additional components including digital marketing and more fully integrated our online and field events to better address all stages of the customer journey. The result was positive pipeline impact in just a few months all while we continued most of our inbound marketing programs.

At another company with a SaaS based enterprise software application, the goal was to add-in a focused outbound ABM program to the existing inbound programs. We started by identifying the use cases where we had high win rates and successful deployments. We then selected accounts based on size, industry, technologies deployed and other key criteria as a target list from which the sales reps selected the specific accounts based on their past experience. The marketing team then built out contacts lists using agreed upon personas, designed email and phone outreach programs and rolled out the new systems and processes to the reps. In just two to three months we drove over $500K in new pipeline – again while we continued all the inbound programs. Going forward the plan is to add-in both digital marketing and events.

In neither case did we stop our inbound funnel, rather we designed the new programs to work with existing programs while we developed outbound ABM muscle. We made sure that there was capacity within the lead qualification teams to run the outbound ABM programs while still qualifying inbound leads. Also in both cases we started with simple email and phone campaigns and later moved to a more fully orchestrated ABM program. Some might not consider these programs “true ABM” but rather a targeted sales play — but I believe that’s just semantics. The bottom line is that my job is to drive pipeline and deals and these methods have been successful.

My experience has been mostly positive gradually migrating to ABM. How about you?

Lesson: I believe that the adage ‘moderation in all things’ applies to ABM migration. What have you seen?

Account Based Marketing Migration Plan

Here are the presentation slides from a DemandBase seminar I gave in January of 2016 describing a planned migration to ABM. I believe the structure and approach has stood the test of time and is still relevant today. Does this look like your ABM approach?

Account Based Marketing Migration Plan

Continuous Pipeline: from Inbound to ABM Outbound

Challenge: As Pipeline Demands Increase Year over Year, How Does Marketing Keep Up?

For early stage startups, building demand generation functions often takes a common path. The first marketing employees purchase and deploy CRM and marketing automation systems while they build out inbound programs such as events, webinars, roadshows, paid search, nurture programs and dashboards to track progress and ensure optimization. The early years are typically a success as marketing supports sales with an increasing pipeline by selecting the easiest and highest yielding programs. However, over the next few years, pipeline demands increase at a faster rate than budget or headcount allows, putting pressure on marketing for more pipeline with fewer resources. At some point, these (mostly) inbound programs experience diminishing marginal returns – with lower conversion rates or higher costs. Suddenly the marketing team goes from ‘heroes’ to ‘zeroes’.

I have been on this journey more than a few times. How does the demand generation manager/leader continue to deliver over time with increasingly difficult targets? Generally, I have seen marketing groups enrich pipeline in two major waves. The first wave is to expand marketing programs to include customer advocacy, upsell/cross-sell, new market segments/applications/use-cases, etc. Each of these can be very effective and support more pipeline creation within cost targets. But with the ongoing march to profitability, marketing departments need even more pipeline growth at even lower cost.

The second wave of additional marketing programs involve going back to a time when there was little or no marketing and just a few reps using the phone and personal email to drive opportunities. But what’s different at this point is doing this at scale to support the business with orchestrated and targeted outbound efforts. Marketing can create a continuous account based marketing program acquiring ideal customer profile Accounts and Contacts and placing them into scripted sales plays to drive sales outbound efforts efficiently. Each week select number of accounts per rep that fit the ideal account profile and have target personas added to outbound cadences with optimized content and offers supporting the customer journey. Sales is likely already running email/phone programs anyway – why not make their efforts part of a defined and continuously optimized marketing-driven process to drive net new opportunities.

Because marketing is creating a structured process, the messaging and team activity can be measured and optimized. These programs can test and optimize messaging, CTA, # contacts, types of outreach, etc… This requires marketing to take a leadership role in ongoing ABM review and to communicate these results across both sales and marketing teams. Creating standard processes, funnel definitions, SLA’s and more will enable simple dashboards to provide transparency and insight into ABM program productivity. The team can also evaluate the vendors and tools used in the program – in some cases testing these as well.

Is your sales team still doing individual outreach? Are you leaving outbound programs up to your reps using their own emails or call guides? This does not scale and certainly is difficult to optimize. With a standardized process, then the management team can review and improve performance. Most importantly, as inbound programs that meet target ROI criteria become harder to find, this structured and coordinated outbound program can help fill the gap and support overall revenue targets. This ongoing dialogue between marketing and sales also makes the increasing targets a joint challenge to solve. (OK so we might not all be holding hands and singing kumbaya quite yet…).

Lesson: When looking to cost-effectively increase your pipeline, ensure marketing and sales are collaborating closely on inbound and outbound efforts to optimize content, flows and success.

NOTE – special thanks to Chris Newton for term Continuous Pipeline.

Managing Leads as Contacts: A Marketing CRM Use Case Enhancing Account Based Selling

structured

Challenge: With Sales Increasingly Adopting Account Based Sales, How Do Marketing Systems Support the Effort?

I recently asked a simple question on LinkedIn:

Anyone know of an organization that has eliminated Lead management in Salesforce.com and moved to prospecting solely using Contacts/Accounts? Love to chat with them about their experience.

I was quite surprised to see a resulting 23 comments and over 10K views. Clearly this struck a nerve. Full disclosure: I am currently working with a client to migrate the management of prospects as Contacts rather than Leads.

In most B2B environments, sales reps have long thought about their efforts on an account basis. In fact, this recognition has driven the rise of Account Based Marketing to better support their efforts. Even when selling solutions with smaller ASPs (lets say ~$5-10K annually), reps map out their target account with key target personas. Further they use an array of modern account prospecting tools brought in by Sales Operations to support their outbound activities – tools like Tout, Yesware, Outreach.io, LeadSpace and LinkedIn Sales Navigator, to name just a few. This complexity combined with the marketing team’s involvement in attempting to manage the customer journey at the Account level caused me to rethink CRM structure.

Certainly there is a data sync between CRM and these sales outreach tools, but it is far from perfect in creating a complete view of a given account. As new Leads enter CRM from a variety of sources, how does a rep maintain that complete view of their target prospect or customer? As more tools are added, reps find it increasingly challenging to view Account details – such as people, relationship, and activity – in both CRM and prospecting tools. Just a few short years ago, CRM was the central database as well as the destination for prospecting. That is no longer the case.

Back in the day, marketers used the CRM Lead object for qualification and nurturing until they were ‘sales ready.’ Best practices were for marketers to nurture Leads with content relevant to their sales stage (still a great guiding principle). However, because there is a visibility and reporting gulf between the Lead and Contact objects, this makes rep outbound efforts much more challenging. There are some newer solutions to help both Marketing and Sales ‘see’ an Account view of all Leads and Contacts like Engagio, LeanData and ZenIQ. Mapping or matching Leads to Accounts is nice – IF the reps lived in SFDC – but as noted above, this is becoming less common with new prospecting tools.

With a more complex martech infrastructure and with reps ‘living’ in systems other than the primary CRM, how can Marketing best support these efforts with CRM structure?

I now believe that most sales organizations with heavy outbound prospecting in third party tools would benefit by managing Leads as Contacts. Both marketing and sales teams will enjoy improved Account visibility. Making an effort to map key personas within the account, to convert matched Leads to these Accounts and to update the Account information will prepare marketing to best support sales in their outreach efforts. However, making this move requires a close look at several things, including: lead to account matching, Lead/Contact enrichment, management of Leads that don’t match to Accounts, Account statuses and progression, funnel stages for both Leads and Contacts, MQL processes, Lead/Contact scoring and Lead Development Rep process to submit opportunities — to name a few. As we progress through the customer journey, there will likely be other benefits like improved Contact and Account scoring, better Opportunity management, improved customer lifecycle marketing, etc.

I believe the modern marketing and sales tech stack has matured to a point where managing prospecting efforts in a more structured, account-based way will make sense for many more organizations today, even with lower ASPs. There are certainly many details to consider because this represents a fundamental shift and will require a new set of best practices that will be different for each organization. Additionally, for companies migrating a mature CRM instance, it will take careful thought and deployment.

Lesson: Marketing can better support sales and the account buying journey with an Accounted-based process for managing Leads as Contacts – and this may fit many B2B sales organizations.

Define Your Sales Motion First Before Applying Demand Generation

Challenge: When to Invest in Demand Generation?

Demand generation is a perennially ‘hot topic’ because every organization needs to ensure a consistent flow of prospects ongoing to ensure it can meet its sales objectives. Take the recent focus on Account Based Marketing as refinement of programs, processes, systems and data to orchestrate and optimize demand generation results. Every emerging organization must have a clear customer acquisition strategy – or at least a plan to get to one. These involve go to market channels/programs, MarTech stack, programs and ultimately the expected cost of customer acquisition. Since all early stage companies need to quickly scale sales, isn’t investing early in demand generation the sure fire way to do this?

All too often, companies are pouring money into the demand generation programs and systems without a clear understanding of the customer journey. Demand generation is a set of tools and processes designed to support successful customer acquisition, onboarding through to customer success and advocacy. Without clearly understanding both the buyer persona and their journey, marketing cannot hope to make this process faster and more reliable.

This thought was raised in a recent article posted by a CEO entitled “How I Burned 10 Million Dollars So You Don’t Have To”. In the article, Matt Munson notes:

“We went ALL IN on an inside sales driven model. For good reason. With solid proof. But we nearly broke the company. We certainly caused incredible heartache for dozens of people.

I wish we’d tested earlier. More thoughtfully.

I regret not staying smaller for longer. Living off $3M to find product-market fit, with a real, scalable acquisition channel. And keeping the other $5M in the bank for scaling powder.”

Matt’s quote is spot on. It is so clear that we need to get this right. Every discretionary dollar is precious – and we can’t start data gathering and testing early enough. Moreover, before we spend anything, we need to clearly understand where in the customer journey this program or tool will have impact and how we will measure its effectiveness.

The best early stage companies I have seen most recently focus solely on sales in the early stages before engaging marketing to help scale. Even later, with a defined sales process, these early investments need to be scoped and measured appropriately. Over the past several years, I have been continually surprised with results and had to make significant resource allocation changes. Matt’s advice is true for us all. First identify the buyers and their process from awareness to engagement to purchase and to ongoing success. Set in place expectations for your programs – in cost, conversion rate, timing and more. Doing this on a shoestring marketing and sales budget is the right place to start and forms the basis of ongoing testing and optimization.

Investing in demand generation people, systems and processes too early can easily drive interest and engagement that does not result in revenue. The result is a recipe to burn cash and miss key milestones.

Lesson: Understand your sales motion first and only then scale demand generation with a measurement and test plan in place.

To Incent (a trial) or Not To Incent? It Depends.

Challenge: A case study in paying prospects for a trial experience

Blog Note – this is an edited version of a longer write-up.

Summary:

Many companies rely on a free trial experience to drive prospect engagement. I had this very experience at with a company, a journey that took 18 months.

The objective was to drive the target buyer into a 14-day free trial (which, at the time, influenced more than 70 percent of closed-won business). Marketing’s goal was to dramatically increase the quantity of trials at the same conversion level while closely managing the cost of customer acquisition.

We experimented with a $25 Starbucks gift card offer for installing the trial as well as attending the daily demo. By tying the incentive to both the trial and demo, prospects would see the product capabilities and try it out for themselves in rapid succession in an attempt to drive that “a-ha moment” when the prospect clearly sees the value to them personally and to their company.

To evaluate impact of this offer, we broke this down in phases. First we tested it as a one time email offer to our database, then identified mechanisms to automate both the offer and card delivery in select channels like our integrated nurture process and finally expanded to an offer on our website to dramatically scale the offer. And after 18 months of great results, we eventually pulled the offer – and this is the story of that journey.

Evaluating Results

First, the team sent a one-off database email with a split test comparing a basic trial offer with no incentive to the offer of the Starbucks gift card, requiring both trial installation and daily demo. We measured impact on both click thru rate (CTR) and form completion rate. Email CTR increased by 3x (.9% to 2.7%). However, in order to qualify for the gift card, the prospect had to fill out two forms – the trial and the daily demo. When comparing the single trial landing page conversion rate with the rate of those completing both forms, the completion rate went from 68% for the trial alone to 42% for both forms. Digging deeper, the trial form completion rate was identical (68%) – so the subsequent demo registrations represented a net gain and therefore was viewed as a cost-effective promotion (and down funnel conversion rates remained unchanged). Net – 3x increase in CTR with the same trial landing page conversion rate with incremental increase in daily demo registrations. After 4-6 weeks, the down funnel conversion rates were comparable to non-incentivized trials.

With this proven one-time offer, the team evaluated ways to expand the reach of this offer. The decision was to run an A/B test of the trial incentive in our ongoing integrated email nurture. The trial was a middle of funnel (MOF) nurture offer to prospects who met quality scoring thresholds. Again, the results were positive. The CTR for the trial alone was 3.9% versus 10.6% for the Starbucks offer with similar landing page results above. However, now we had instrumented an automated delivery and fulfillment of this offer – so we dramatically increased trials while only rewarding for success events – namely participation in daily demo and trial campaigns that were highly correlated with closed-won business. But we only made this offer to qualified prospects who entered the funnel from a variety of other marketing programs. And with automated fulfillment, there was minimal additional labor required from the team. But could we do more?…

Next, the team examined if it was possible to further broaden the offer but still maintain high down-funnel conversion rates. At that time we implemented a website conversion optimization technology called BounceExchange (BX), which detects web visitors ready to abandon and raises an offer via a pop-over window. BX would make the Starbucks trial incentive even more broadly available to some/all website visitors. We added the Starbucks offer to BounceExchange with great results: the website trial CTR increased from 1.72% to 2.48%, a 44% conversion rate bump. With our growing website traffic, this had a tremendous impact on our trial conversions, driving over 4000 incremental trial conversions at a CPL of approximately one-tenth of paid search campaigns.

Remember that the offer was designed such that the $25 incentive would be delivered only if the prospect were to both download the trial and attend the daily demo. So the team felt really good about top of funnel results. Looking down funnel, for the next 12 months, we saw a consistent ~20% MQL to SAO conversion rate for these trial offers – consistent with non-incented trials. Finally, putting an ROI lens on this offer, it increased cost per opportunity by $125 ($25/.2) – staying within our cost-per-opportunity target.

Incentive EOL

Alas, the good times did not roll on forever. Over time, two developments led to our halting this offer. The first was an erosion of conversion rates, which happened gradually. We suspect that there may have been saturation of the offer with our target prospects. Second, we encountered fraudulent postings to this offer beyond our target audience. While we were able to respond quickly to limit potential expenses, the time required to monitor and correct these offers represented ongoing support by resources that could be focused elsewhere. So approximately 18 months after the start of this journey, we removed the offer.

Lesson Learned

Incentives to drive the right prospect behavior worked well for a while and supported scaling at a key time of company growth. Designing both the offer and automating fulfillment were key. However, as with many marketing campaigns, great programs have an end-of-life and should be constantly and closely monitored.

Choose Wisely: Account Based Marketing or Target Account Marketing?

accountbasedmarketing

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.