Earlier this summer, Salesforce announced that it was entering the account-based marketing (ABM) space, bundling a package of existing tools with a new solution to create Einstein ABM.
As with any Salesforce launch, the announcement made waves, particularly as ABM is currently such a hot topic. But not everyone welcomed the news. In particular, some raised concerns that the offering wasn't really account-based marketing at all, and was a demonstration of how businesses are jumping on the ABM bandwagon.
For instance, Alisha Lyndon, CEO of Momentum ABM, noted: "Salesforce has got everything right with its new Einstein Account-Based Marketing service - except for the name. The new service will provide a much more powerful tool for marketers because it represents a pivot away from managing individual leads to looking at accounts holistically - but that doesn’t make it account-based marketing.
"In their rush to jump aboard the bandwagon, all sorts of companies are rebadging or recombining their products and services as ABM, failing to understand that account-based marketing is not a technology but rather an approach - one that is based more on conversation, research, adaptability, and listening than any clever combination of programmatic software or artificial intelligence.
"Does it matter that Salesforce (among many others) are misusing the term ABM? We think so. This approach to marketing is still relatively new; if we allow the idea that ABM is a technology rather than a people-led process, then we will only sow doubt and confusion in the minds of customers who stand to benefit from true ABM. The result will be time, effort and money wasted in correcting the misunderstanding caused by the cavalier appropriation of ABM."
With this in mind, Sue Duris explores what account-based marketing is and isn't - and why it has captured so much attention in the first place.
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Important piece of the plan
Customer experience (CX) has become a significant distruptor, challenging the way companies do business. These days, if you aren’t customer-centric or transforming to become customer-centric, your survival is at risk.
In its Customers 2020 report, Walker proclaimed that by 2020, customer experience would overtake price and product as the key brand differentiator.
Because customers are more informed and are driving the experience they receive, they expect you to know them, personalise their experience, and proactively meet their needs. To be relevant and grow, companies must adapt or they will fail.
The companies that will win will align the right resources and focus on the right metrics so they will be able to focus on the customer across the organisation and throughout the customer journey to be able to deliver experiences that will drive value.
As customer-centricity becomes critical, account based marketing (ABM) has become one the most important pieces to a company’s overall marketing plan.
ABM is flipping traditional marketing on its head by focusing on specific accounts and not leads. ABM enables B2B marketers to align more strategically with sales to deliver personalised campaigns to a specific group of target accounts in order to drive revenue.
Taking its time
ABM is not new.
It started in 2003 by the ITSMA who pioneered the ABM concept. Initially it was used as a one-to-one-approach with very large accounts. ABM adoption hasn’t been easy and has taken time.
Using this approach means selecting the right accounts, diving deep into the account to get to the insights, and identifying and engaging with the right contacts associated with the account.
This isn’t typical practice. Most marketers prefer a traditional approach: identifying and nurturing leads, and passing them to sales to close.
It has been the technology and the push for organisations to become customer-centric that has really moved the ABM needle.
Additionally, for ABM to work, marketing needs to align with sales to target specific accounts. That is easier said than done in organisations where there is a gap between sales and marketing, at best, or a very tense relationship, at worst. The issue is since marketing and sales behave as two separate units, how is marketing going to help sales align to close the gap and work together?
Also, there’s the whole idea of organisations struggling with investing a lot of time and resources for only a few accounts, and waiting quite some time to see real benefits, namely, the revenue from this new approach. As a result, obtaining executive sponsorship has been hard.
So what has changed?
There have been successful case studies in favour of ABM and some strong advocates, like ITSMA and SiriusDecisions, pushing for ABM adoption.
Notably, it has been the technology – marketing automation and other applications – and the push for organisations to become customer-centric that has really moved the ABM needle.
Marketing automation enables marketers to scale and get closer to customers by customising a specific approach to a targeted group with minimized cost and risk. It has also enabled companies to transition to a customer-centric model where the customer is placed at the centre of operations where the focus is on creating positive experiences before and after a sale to drive retention, loyalty, advocacy and growth.
With traditional marketing, everything centres on leads. You run campaigns against leads. B2B marketers tend to cast as wide a net as they can to attract and acquire as many new customers as possible. The problem here is traditional marketing can be divisive – it tends to create gaps between marketing and sales, specifically in lead quality. Lead quality comes down to how a lead is defined.
Marketing may define a lead as anyone who shows interest in a company’s product; but sales tends to define a lead as someone who is ready to buy now. This sets up a conflict in the relationship, and as a result, many viable leads end up being lost. And, worse, because traditional marketing is a broad-based, and not targeted, approach, you end up with a lot of wasted time, effort, and resources, as well as lost revenue.
ABM is better for a number of reasons.
1. Focusing marketing
While traditional marketing focuses on acquisition only, ABM focuses on both acquisition and retention. Marketers take a much more focused approach – targeting specific prospects and customers, which leads to earlier engagement and higher conversion in less time.
ABM realises the fact that the best revenue potential is with existing customers.
This is the same approach CX takes and why ABM aligns nicely with CX – because growth occurs in the post-purchase phases of the customer journey, much focus must be placed on the retention, loyalty and advocacy phases to increase customer lifetime value.
The ABM approach serves to expand and go deep within existing accounts so you are increasing an account’s customer lifetime value. This enables you to focus on adding more value to your high value accounts, quicker.
2. Aligning sales and marketing
ABM aligns sales and marketing resources on creating personalised campaigns designed to resonate with and engage a defined set of targeted accounts. With ABM, you are aligning sales and marketing to the account in a very targeted and personalised way.
When sales and marketing are aligned in a more precise way, you are able to optimise your human and financial resources. This will not only maximise the efficiency of your marketing but it will help build the relationship with sales to further help sales-marketing alignment.
ABM realises the fact that the best revenue potential is with existing customers.
In Bizible’s State of Pipeline Marketing 2016 report, it found that “marketers doing ABM are about 40% more likely to report alignment with their sales team compared to marketers not doing ABM.”
And you are developing finely tuned content that customers want and need to help them move along the customer journey more effectively. Just like with CX where you focus on improving a customer’s experience, you are doing the same with an individual account’s experience.
And, why Shari Johnston, SVP of marketing at Radius, defines ABM as “an orchestration of marketing and sales aligning around their target accounts, and orchestrating them through a buyer’s journey.”
3. ABM produces a strong ROI
According to ITSMA, almost 85% of marketers say ABM delivers the highest ROI of any B2B marketing initiative. In addition, according to a report from Bizible and TOPO, it found “ABM outperforms a traditional marketing approach across a number of categories, including sales and marketing alignment, overall customer LTV, contract value, close rate and ROI.”
And, according to Alterra Group, 84% of marketers said that ABM provided significant benefits to retain and expand existing client relationships.
Companies that measure ROI tend to measure other areas of their ABM initiative. They want to identify areas to improve and optimise. According to DemandBase and Demand Metric’s ABM Adoption Report, “ABM’s ability to drive revenue creates benefits for the marketing organisation. The ultimate goal for a marketing organisation is to not just influence revenue, but to attribute a measurable contribution to revenue.”
Strategy or technology?
ABM is not intended to replace other marketing initiatives, but complement them. For instance, even though ABM is more of an outbound strategy, it can co-exist with a company’s inbound initiatives. In fact, they play well together. While ABM tends to be highly personalised and targeted, much of the same content and activities can be used in inbound campaigns.
So is ABM a technology, strategy or what?
ABM experts, like David Raab, are quick to point out that ABM is a strategy and not a technology. He adds, “But ABM requires many tools, including data and predictive modeling to identify target accounts; campaign engines to orchestrate messages; execution systems to deliver those messages; and analytical systems to evaluate results.”
Other ABM practitioners believe ABM is a mindset, which is the same way CX is viewed. The mindset is in how internal groups align in an organisation to work together to meet the needs of the customer in an effort to drive value and growth.
ABM is gaining traction fast. In its 2016 State of ABM study, Sirius Decisions noted that more than 70% of B2B companies had staff dedicated to driving ABM programs. And, 58% had a pilot or test program and 41% had a full program in place, compared with only 20% of companies that had full programs in place in 2015.
As ABM gains more traction, more resources will be dedicated to the discipline. Alterra Group noted in its recent research that ABM leaders dedicated 20% of their marketing budgets to ABM three years ago, versus 14% for laggards. Leaders will continue to outspend others. Leaders plan to dedicate an average of 53% of their budgets to ABM three years versus 37% for laggards.
Leaders also more closely measure the impact of their ABM spending versus laggards. 58% of leaders measure the ROI of ABM to a large or very large extent, compared with 27% of laggards.
As the demand for ABM rises, so does the demand for ABM vendors. Raab produced the first Raab Guide to Account Based Marketing Vendors: Contents and Introduction last year, which referenced 40 ABM vendors.
Announcements of new products, services and applications to improve ABM are accelerating - as we have seen with the launch of Salesforce's Einstein ABM. Adding AI into the ABM mix is certainly a potential game changer.
Michael Kostow, SVP and GM at Salesforce Pardot suggests that coupling ABM with AI “offers an additional layer of prediction to ABM for sales and marketing teams to be more predictive, efficient and effective in their prospect and lead engagement. Companies can now better prospect and sell smarter by personalising their marketing engagement throughout the entire customer journey.”
One of the key points of AI is in its predictive capabilities. Introducing those capabilities into ABM will take the discipline to the next level.
According to its 2016 Hype Cycle for Digital Marketing and Advertising, Gartner has Predictive B2B Marketing Analytics at the peak of inflated expectations, noting that it has a huge ROI and can be instrumental for ABM because its data science approach can help identify the companies that will mostly likely buy from you.
Aggregating these data points produces an ideal customer profile that you can use to compare against other companies. You’ll be able to identify all the accounts that match up well to this ideal profile and you’ll be able to create your target account list. In addition, predictive will enable you to engage with these accounts on a much deeper level.
The goal of ABM is to help organisations generate revenue through an initiative that provides strong ROI and meaningful metrics to help them grow better and quicker. As ABM grows, resources and the technologies to utilise them will be more advanced.
As is the case with CX, with all the tools at a company’s disposal, it is still important that marketing, sales, customer service and other customer-facing teams row in same direction to provide customers with an experience that drives value. And that will lead to corporate growth.