Account-based marketing, or ABM, is a marketing approach that focuses on efficiency. Typically, marketers work with what they already have and try to target industries or geographical areas where your company would like to get business.
With ABM, the process is reversed. First, your marketing and sales teams come together to identify key accounts and prospects and then figure out personalised marketing messages and sales processes that will work on them.
The ABM approach works particularly well for B2B companies, where the potential customers' pool may be relatively small. You have the opportunity to figure out the needs of each prospect and target them in a very focused way.
Many companies see ABM as a way to use their existing resources more effectively – but what effect could it have on your business? In this article, we'll take a look at what you as a decision-maker need to know about ABM and what it can mean for your bottom line.
Many companies suffer from misaligned sales and marketing teams. Marketing focuses on attracting visitors and bringing in new leads but rarely follows on what happens afterwards. Sales concentrate on keeping customers happy and meeting targets but might not keep up with content marketing is putting out.
Even if your results are promising, a situation like this results in a lot of missed opportunities. ABM deeply involves both groups and allows them both to operate at their full potential. For your ABM strategy to be successful, both marketing and sales need to work together in the planning stage. This makes sure they're both on the same page from the start, and both sides are aware of what the other side is doing. Sales know what arguments they need to come to prospects with, and marketing knows what kind of leads are most important.
As your ABM strategy develops, both sales and marketing become equal participants in the customer journey, and both can feel like they're a part of the success. If you've struggled to unite sales and marketing in the past, ABM may be a good antidote.
Every company and marketing department is different, so it's impossible to give a definite percentage with which your ROI can improve if you start using ABM – any figure we could give would be an educated guess. However, by looking at other companies' experience and thinking about the ABM process itself compared to traditional approaches, you can see how ABM could give you a better ROI.
It's been said that if traditional marketing is like bottom trawling, ABM is more like fishing with a harpoon. More effort is required to 'catch' a single account, but if you have targeted the right company, you can be more sure that it's a valuable account that is likely to become a customer. Since ABM involves you targeting a small number of specific companies, you have the opportunity to track and analyse how much time and money you're devoting to each targeted account. That's not possible with more traditional approaches, where you produce a campaign and can only see which customers it attracted after the fact.
The lower number of targets with an ABM approach makes it much easier to track your investment accurately. Even calculating your ROI in the first place is more straightforward with ABM.
According to a Demandbase study, 61% of companies saw an improvement in their ROI after adopting ABM – with 19% reporting a "significant improvement" of more than 10%.
ABM involves focusing your efforts on the best and most valuable accounts. By first making it easier to track your resources and allowing you to use those resources more efficiently, it could boost your ROI.
The purpose of this article isn't to convince you to pour all your resources into ABM immediately. If you're a decision-maker at a company, you've heard people make similar claims hundreds of times before.
However, the ABM approach is an adaptation to evolving online behaviour. Historically, the battle on the internet was for clicks and attention. The aim was to bring in as many visitors as possible and get as many as you could to convert. That produces figures that look impressive but quickly become disappointing when the leads' poor quality is revealed.
Many achieved this by producing as wide-reaching content as possible, which would attract many visitors through search. This is still a common approach – which is why it's often so difficult to find high-quality information online. Content is always crucial – but it's only worthwhile when focused on the audience's needs and wants.
ABM is a rejection of this 'maximalist' approach. Rather than trying to attract as many visitors as possible, the purpose of your ABM content is to be irresistible to a tiny pool of people in your target list. Knowledgeable people who spend a lot of time online have become fatigued with the sheer volume of information available, and they have a finely-tuned sense of whether the content is trustworthy or not.
ABM reflects this change in behaviour by emphasising personalisation and relevance. And your ABM content won't just appear to be specifically aimed at your target's needs – it actually will be. Online behaviour is changing, and ABM is an excellent way to adapt when more people than ever crave information relevant to them personally.
ABM is a hot topic in sales and marketing now, but it's not just all talk. Numerous studies from companies and groups in our industry show that ABM adoption, and the amount of money spent on it, has shot up in recent years.
According to figures released by Demandbase, companies that had already implemented an ABM program in 2019 dedicated around a third of their marketing budget solely to ABM. And almost three-quarters of those same companies were planning on spending more on ABM in the future. A Statista survey from 2020 showed that nearly half of respondents were using ABM in some way.
In other words, if you're not using ABM yet, chances are that some of your competitors are. And even if they aren't experts at it, they still have a head-start.
ABM has become an established sales and marketing strategy, but there are still many misconceptions about it. It's understandable – there are many buzzwords in sales and marketing, and trends come and go constantly. The difference here is that ABM is a strategy, not just another tactic. Taking an ABM approach isn't just a trick that can artificially inflate your results – it's a long-term approach that you build up with your sales and marketing teams, which allows them to focus their efforts on the accounts that are most important to you. It takes time and hard work to establish, but the end result will be a better use of your company's resources. Let's take a look at the most common objections that the C-suite has to ABM.
ABM indeed involves targeting fewer accounts that you would with more traditional approaches. Typically, you may get leads from a hundred companies but end up having to discard 90% of them since you know they won't become customers. With ABM, you may only target ten accounts, but all of them have an excellent chance of actually becoming customers.
This doesn't mean that ABM is slow, or too targeted, or only works with certain kinds of customers. As you would with traditional marketing and sales, you can create a list of ABM targets and segment them, coming up with personalised approaches for each one that would still work at scale. It's not about choosing a handful of companies and focusing all your efforts on them, but figuring out what approach would work best on each type of company and coming up with a strategy that would work on all of them.
ABM has been developed and practised over decades – even if its catchy name is a more recent development. The process of identifying promising accounts, coming up with a way to approach them specifically, and using the personal connection to keep them happy is an approach that businesses have always used.
Modern CRM tools, email marketing and online advertising have made it possible to use this same approach at a much larger scale. You may see a lot of buzz about ABM, but at its heart, it's a simple approach that makes sense – not just another buzzword.
Inbound and ABM work hand-in-hand. ABM is a more outbound approach than the modern inbound methodology, but the two can run parallel and benefit from each other. For example, if you create a piece of content targeted at a specific account as part of your ABM strategy, that doesn't mean it's worthless for everyone else. This content can still attract and convert visitors, just like any other piece of content.
But aside from those practical considerations, ABM and inbound are two sides of the same coin. Both approaches building on a foundation of deep, well-researched knowledge about your customers' needs and wants that your company has internalised. ABM and inbound can be seen as two different ways of making use of this knowledge. So if you do one, it'll be easier to do the other.
Setting up an ABM operation may be a demanding task, but it will be more challenging to gain new customers to replace those who have switched to a competitor.
ABM isn't a magic pill that will immediately transform your organisation – it's a long-term process that takes time to set up, but once you're up and running, it'll be worth it. It will bring your sales and marketing teams closer together, it will be easier to keep an eye on ROI, and you'll be able to use your limited resources in a more thoughtful and hopefully more profitable way.
If you need help getting started with ABM – whether you need to identify your target accounts or want to set up a team – don't hesitate to get in touch. And if you want to know more about ABM, take a look at our in-depth guide – it provides more answers that can help you make your decision.
We also have a downloadable guide to practical ABM tactics, which will be useful when you begin actively working with ABM. Click the button below to get your copy.