5 things you need to know about account-based marketing
In addition to Fernandez's announcement, ABM was the subject of several other Marketing Nation Summit sessions, and it created a lot of buzz among attendees. Though it's been around for years, ABM is rapidly becoming a key business strategy in the age of digital business transformation.
ABM is a business-to-business (B2B) strategy designed to drive collaboration between corporate marketing and sales teams by focusing them on building individual client accounts, as a way to drive revenue.
ABM blurs the boundaries between what sales and marketing teams have historically done. ABM is "a collaborative approach that engages sales, marketing, delivery and key executives toward achieving the client's business goals," according to the website of marketing research and consulting organization ITSMA, which is credited with pioneering ABM.
ABM "is an evolution from account-based selling that now involves marketing," says Jim Williams, vice president of marketing for marketing software developer Influitive. "The idea is to no longer have a massive, wide funnel, but rather to have a highly targeted funnel with very qualified leads. Competition is much bigger due to the proliferation of B2B technology companies, and there is more noise than ever. Hence, getting back to basics — targeting key customers and retaining them — is the name of the game, and we now couple those principles with technology."
Traditional marketing is akin to fishing with a net, according to Jon Miller, CEO of marketing platform provider Engagio, while account-based marketing and sales outreach is "like fishing with a spear."
More than 70 percent of B2B organizations have staffs that are either completely or partially dedicated to ABM programs, according to SiriusDecisions' 2016 State of ABM Study. In addition, 58 percent of those companies have ABM pilot programs, and 41 percent have full programs in place. Comparatively, only 20 percent of organizations had full ABM programs in place a year ago. And in 2015, another SiriusDecisions study found that 92 percent of B2B marketers worldwide believed that ABM was "extremely" or "very" important to their overall marketing efforts, according to eMarketer.
But why is ABM important
It's really hard to turn leads into customers
Less than 1 percent of leads turn into revenue-generating customers, according to Forrester Research, so it's no wonder marketers want to shake things up to generate more high-quality leads that drive revenue. "B2B marketers have realized the limitations of traditional demand generation programs and measurements and instead are rapidly embracing the power of ABM," said Peter Isaacson, CMO of Demandbase, in a spring 2016 statement. "ABM is the growth strategy of choice because it drives the outcomes that really matter to businesses: increased pipeline and revenue."
Marketers need fresh tactics
During the past 18 months, marketers have come to realize the limitations of the traditional inbound marketing model, according to Miller. "You used to be able to put keywords in your blog posts and rank [in Google] for them," he says. "But now everyone is using content marketing. And demand generation tactics for generating leads have reached a saturation point. So that means going after customers using outbound marketing tactics, like ABM, instead of waiting for people to come to you through inbound marketing efforts."
Marketing personas only go so far
Lauren Walsh, head of marketing at Sullivan, a brand engagement firm, says many organizations fall short by marketing to prospective clients based on theoretical personas, or vague concepts of buyers based demographic data, and then trying to apply them broadly when selling. "These personas aren't actionable because they don't go far enough in really understanding what that person is worried about, what they want, and what they expect," she says.
Account-based marketing appeals to B2B companies because it enables them to "connect individual buyers to what they're already looking for," Walsh says. "We can also use internal resources more efficiently to determine where to spend time versus where not to spend time. It's not about knowing how the business will use your product generally, but the individual use cases within each organization."
New tech makes account-based marketing programs easier to scale
Due to cost and complexity, in the past ABM was primarily used by large enterprises to focus marketing and sales efforts on a few of their largest accounts. During the past few years, marketing technology platforms and tools evolved and proliferated, enabling organizations of various sizes to focus ABM efforts on delivering personalized marketing to hundreds of accounts, according to Miller.
Account-based marketing's importance today is directly related to the availability of better marketing automation tools, says Noah Elkin, research director of multichannel marketing at Gartner. "Automation enables marketers to do ABM at scale," he says, "with software tools for managing leads and relationships, scoring leads, providing predictive analysis, and delivering targeted content creation, coupled with programmatic advertising techniques that let marketers target identified accounts and individuals at whatever stage of the buying process they're in."
"Knowing which accounts to go after has never been easier," thanks to these more advanced tools, according to Sangram Vajre, cofounder and CMO of ABM platform Terminus and author of Account-Based Marketing for Dummies. With today's toolset, you can "get in front of the decision makers proactively using all the different channels, such as direct mail, ads, a video or even a tweet, and you can do it all at scale," Vajre says.
Marketing is a more important revenue generator than ever before
Marketing plays a larger role in pipeline generation and revenue creation than it historically has, according to Chris Bondhus, senior director of demand generation for online video platform Brightcove. As a result, "alignment and focus between marketing and sales teams is critical, and ABM, done correctly, delivers that," he says.
Sales and marketing are more inclined to collaborate
There's a lot of focus today on making businesses more agile, lean, and competitive in an era when technology integrates with all facets of business operations. Part and parcel of a digital transformation is breaking down traditional silos between sales, marketing, and other departments, according to Vajre. Sales and marketing teams have come to realize that, to be successful, they must help facilitate their organizations' transitions into customer-first, agile businesses, and traditional silos slow down the process.
Thanks to the proliferation of marketing automation software, sales and marketing can more easily work together, according to Miller.
When ABM is done well it helps contribute to "larger deal sizes, faster deal cycles, and better 'win' rates," says Miller. "If you wait for customers to come to you, you're waiting for them to have a project in place, which means they may be also considering your competition, and that more junior-level people may be engaging with you." With account-based initiatives, "you can reach out to the right people at the right account in a way that resonates with them, and so you're more likely to succeed."
Increased focus on business objectives is another benefit. "When marketing and sales agree on the 400 accounts they care about the most, then the more you focus on those, the more effective you'll be," Miller says.
Some companies say ABM helps them increase high-quality customer referrals, conversions, and other metrics. In a customer video testimonial, for example, an executive from call-tracking and analytics firm Invoca said the Terminus ABM platform helped boost the organization's number of conversions and opportunities by as much as 200 percent. And agile lifecycle management provider VersionOne said Engagio's "account-based everything" platform helped it obtain a 95 percent engagement rate with its top 100 accounts and an 8 percent pipeline conversion among those accounts, according to a customer story posted on the Engagio website.
Less-obvious benefits also exist, such as getting more prospects to visit vendor booths on crowded trade show floors by combining ABM with clever social media campaigns.
Influitive runs ABM initiatives around major events, including its Dreamforce "Most Wanted" campaign, in which it targeted top prospects at the 2015 annual Salesforce conference. The company created a "most wanted" list of its top 125 prospects and placed a $100 bounty on each one, according to Williams. Anyone who delivered a top marketing prospect to the Influitive booth received $50, and so did the prospect. Influitive publicized its campaign on its website, on social media, and in email marketing campaigns, with notable results, including 632 social media mentions, 18 product reviews on sites such as G2 Crowd, and 31 high quality customer referrals, Williams says.
Sales and marketing departments don't always see eye-to-eye, but for ABM to work, it's essential that they do. Otherwise, ABM can be a "waste of time," according to Miller.
"Marketing and sales need to align on what are the goals, which people in which accounts should be targeted, what are the criteria to use in targeting those accounts, and where the ABM program is going," Elkin says.
Organizations may also need to reconsider how their marketing professionals are compensated, Miller says. For example, some companies compensate their marketing team members based on metrics such as how many new prospect names they add to the company database, and how many people respond to marketing campaigns. With account-based strategies, however, those metrics aren't particularly relevant. "It doesn't matter how many people attended a webinar," Miller says. "How many people attending a webinar were from accounts you care about What is the quality and depth of the relationship with those accounts Do we know who the decision makers are at those accounts Are those decision makers engaging with us Is that engagement deepening"
The account-based approach requires a "different way of thinking about success," and thus, a different way to compensate team members, Miller says, which can cause a "big change" at some companies.
Reliable data, which isn't always easy to obtain, is critical to the success of any ABM program, according to Steve Pogorzelski, CEO of Avention, developer of the OneSource ABM platform. "Having a single source of truth for your customer data is a critical element of ABM, and it helps make sure sales and marketing are aligned," Pogorzelski.
Many marketing automation tools are available in the cloud today, and marketers often feel like they know what they need better than IT, so they may go ahead and sign up for tools on their own, says Elkin. "But partnering with IT will help ensure that the data is being collected in the right ways and that organization-wide priorities are reflected in any tech purchase."
"With the rise of SaaS technology and the cloud, marketing teams like ours shouldn't have to wait for IT to approve and implement the technologies we use to engage with our audience or customers," says Williams. "The marketing world is moving way too fast, and marketers who wait for their IT teams to identify, select and implement all of their technologies for them risk being left behind."
Modern marketing teams often hire their own technical talent to make the most of the plethora of complex and powerful technology options available to them, such as marketing technologists, marketing operations specialists and data specialists, according to Williams. "Marketing is no longer just arts and crafts," he says. "There's an art and a science to it, and your scientists can't be your IT team."
Account-based marketing is possible "with little to zero involvement from IT," Vajre says. "But IT can help make sure that when someone is using these tools, it's on a secure platform, and it's tracking all the things in the right way." IT may need to help integrate marketing automation tools that facilitate ABM with other platforms, such as Salesforce, Vajre says. "But if the platform vendors' APIs are good enough, there's not much heavy lifting to be done."
The CIO also "tends to be the owner of data at a company, and so they need to take some responsibility to ensure there is 'one single source of truth' for sales and marketing, that it is enriched, and that it has a peak set of attributes that provides the ability to import additional data sources to strengthen that single source of truth," says Pogorzelski.
Ultimately, if a company can't trust its data, it can't build ABM at scale, and IT can play an important role in ensuring that sales and marketing can in fact rely on their data, according to Pogorzelski.