Many companies are shifting from inbound to outbound ABM approaches – and for good reason.
ITSMA’s latest benchmarking survey with the ABM Leadership Alliance reported that 76% of respondents who measure ROI found they get the highest return on investment from account-based marketing (ABM).
While ABM can bring the greatest returns, ITSMA also reported that only one-third of organizations see a significant business impact and improvement with account-based marketing. Yet previous research shows – and intuitively we all agree – that ABM works. So where is the breakdown occurring?
The definition and direction of account-based marketing has been diluted over time. ABM has always been about focusing on the accounts that can provide maximum lifetime value: getting new key accounts to revenue and existing accounts to greater revenue.
But the term ABM has become synonymous with the technology that enables it, which is wrongly seen as a silver bullet. ABM has also been dismissed by sales teams as another marketing fad, so the cross-functional alignment that is core to the concept is often neglected. Ultimately, companies are treating ABM as “marketing as usual” with shiny new tools and neglecting the internal coordination required to deliver a relevant external experience.
Many are turning to ABM technologies, but they are not putting enough focus on the “people” and “processes” they need to drive revenue growth with top, key accounts. They’ll turn to intent data platforms like G2 to identify in-market accounts they should target. But, they are not figuring out what interactions should look like with these accounts and the experiences they should deliver. We need to rethink ABM approaches starting with how we define and build our ABM strategy.
What is an account-based marketing strategy?
On the Stop the Sales Drop podcast where there were conversations about ABM strategies that led to $1 trillion in realized revenue, Jeff Pedowitz mentioned that too many organizations are still looking at ABM as a thing to do and prospects as another lead to be processed in their pipeline. This is why most ABM strategies as just a bunch of tactics thrown together: LinkedIn ads, retargeted ads, email campaigns, events, phone calls. There is no orchestration and no plan to get accounts to revenue. As a result, there is no real ABM strategy.
ABM should be a business strategy on how leadership, sales, marketing and account teams together will bring key accounts to revenue and existing accounts to greater revenue growth. All teams need to be accountable in their pursuit for revenue.
For example, if sales’ total revenue for the year is $100M dollars, then marketing should be working with sales to get that number. And if 20% of that revenue is with strategic target accounts, then marketing’s number with sales is $20 million. If we’re going to hit these numbers together, then we need to have a strategy – not just a bunch of tactics that focuses at the top of the funnel.
We can’t start out strategic and then turn tactical. Each move go-to-market (GTM) teams make needs to be a calculated move, especially when it comes to Tier 1 accounts.
Why having an ABM strategy is important
There are many reasons to have an ABM strategy, which should clearly show your way to revenue with target accounts that you want to win, protect and expand. Unfortunately, too many GTM teams are flying blind without a GPS and navigation system to get them to revenue objectives. Could this be why two-thirds of ABM organizations don’t see significant business improvement?
About 63% of buyers believe that sales and marketing actions are a waste of time. They’re trying to force prospects into paying attention rather than making them want to pay attention. Forty-four percent of sales and marketing teams see significant drops in responsiveness to their social, email, and phone outreach.
Organizations are challenged to efficiently convert intent data into insights and effectively act on intent signals.
Traditional marketing teams are focused on MQLs and conversion rates but they are leaving big money on the table by not creating strategies for Tier 1 accounts that are part of the 60% of the market that is stuck in status quo and unresponsive to campaigns.
They’re leaving big money on the table by not creating strategies for accounts that disengage from sales and marketing or get stuck in their buying journey and by not creating a strategy for accounts that are at risk of moving their business to a competitor.
ABM will enable marketing to earn a stronger seat at the C-suite table as marketing will be able to drive the fundamentals of revenue and impact deal sizes, win rates, sales cycle time, and ARR and customer lifetime value, which all be tied back to your ABM strategy. When marketers talk about how to move the needle and the result on revenue, you get the attention of leadership and boards. And marketing will be able to build a relationship with finance.
8 components of an account-based marketing strategy
If you want to open, engage, close, and expand key accounts with ABM, then you need to create a detailed roadmap and account plan that can be optimized over time. You can download an ABM strategy and account plan template here. Below, you’ll find the components that most GTM teams are forgetting when creating their ABM strategy.
1. The ABM strategy leader and role each GTM team member plays
Many ABM organizations are not setting up their ABM programs in a way where collaboration is required. Marketing is responsible for campaigns that are focused on up to 500 industry accounts and on account clusters where prospects display similar intent signals, have similar characteristics, and are in the similar buying stage.
Sales is responsible for getting engaged campaign prospects to the close and for the one-to-one communications with target accounts. But they are left to their own devices. Sales and marketing are separately speaking at accounts in hopes of driving leads, appointments, and engagement.
But ABM is not about campaigns. It’s not a piece of marketing technology that demand gen teams execute on. When ABM is treated as a campaign, it becomes an expense – and expenses get cut. ABM is about having the right interactions and delivering the right experiences that are needed to get accounts to revenue and existing accounts to greater revenue growth.
Because ABM is a business strategy,. it should be led by the CEO, CRO, and CMO, and it should include all functions that can impact the GTM. This includes sales, marketing, customer success, account management, product marketing that should be the connector for the business, sales enablement, and RevOps teams. We need to define each team’s role in the ABM program and how the teams need to collaborate and orchestrate their efforts.
2. The change management that will need to take place before you can execute on ABM strategies
Most companies can retrofit their lead process, their lead technology, and their lead reporting in and around what already exists for their new ABM reporting and approach. You don’t necessarily have to “burn things to the ground” to adopt an ABM strategy.
If you want a lead engine, ABM should not be about driving leads and a stronger pipeline. Most organizations do not have the foundation they need to see stronger revenue growth from ABM. In most cases, there’s a handoff between GTM and customer-facing teams vs. a handshake, where there is alignment, integration, and orchestration.
Most ABM organizations miss the fact that ABM should change “sell” processes and motions. If sales is not fully prepared to go all in with enablement and sales orchestration in a digital world, then you are missing the mark.
Most content and messaging does not support sales nor ABM. And most marketing teams still focus on top of the funnel vs. impacting the complete buyer’s journey and customer lifecycle. Their primary metric is pipeline KPIs and marketing-sourced revenue. They’re not thinking about how they are going to invest to grow their customer portfolio, what customer accounts they should be focusing on, or what they need to put in place for those accounts.
A focus on marketing-sourced revenue shows that marketing has a very narrow focus does not support ABM. Top of the funnel metrics doesn’t really bring into account a cohesive view that revenue is everyone’s metric and not just sales. No matter who prospects and nurtures, marketing is involved to help accelerate the deal through the pipeline and contribute to a closed win.
Your ABM strategy needs to lay out where gaps exist in the current GTM efforts, what needs to change, why it needs to change, and how. Without change management, you will not see maximum impact from your ABM program because the company as a whole will operate as usual, but now with a targeted list.
3. Defining your ICP, account segmentation, and the ABM approach to take
Most sales and marketing teams are treating all accounts the same – there is no tiering, no segmentation and no differentiation in approaches. Remember, earlier in the article, there was a mention that only one third of organizations are seeing significant business improvement from ABM.
In correlation, only a third of ABM programs are balanced between one-to-one, one-to-few and one-to-many. This means two thirds of ABM organizations are treating every opportunity the same. They are not thinking about each account as an investment that carries a different weight and risk.
We need to define our ICP and this starts off by segmenting existing accounts. You will find that there will be clients that provide you with strong revenue growth already and great margins as there’s a low cost to serve. You want to uncover the characteristics of these accounts and put time and resources into them. This exercise will help you see the accounts that you should focus on expanding.
There will be other clients that cost more and provide a lower rate of return but they offer opportunities for growth if you can change their buying behavior. Similar accounts would be your Tier 2 accounts that you may want to do a one-to-few program with until you see strong intent. Doing this exercise would help you identify the existing accounts that you should be using ABM to drive greater adoption – and change how they are using your product or services.
There will be other accounts where there are diminishing rates of returns – you do not want to put time and resources into these accounts. This is where you’d use a one to many approach.
Click here to see how detailed you should go with your ICP
4. Defining the “joint” wins ABM strategies will tackle (accounts and revenue KPIs)
If the ABM program is not focused solely on “in-market” accounts that intent data platforms identify, then either marketing or sales is picking the target accounts. When marketing picks the accounts by themselves, it’s a challenge to get support from sales. ABM is about going to market as one team.
When sales picks the accounts they put together a wish list that may or may not make sense for the business. They’re not thinking about if they have the right stories, messaging, and content so they can be successful. A disconnect is often created when sales picks the target accounts.
Your ABM strategy needs to define how target accounts will be chosen and put a process in place for leadership, sales, marketing, product marketing and account management teams to qualify and disqualify targets.
In addition to aligning on targets, GTM teams need to align on the KPIs that they first want to impact. In many cases, ABM programs are built too large as we have a desire to scale. But if we’re going to focus on the complete buying journey and customer lifecycle, then we need to apply our ABM programs against different KPIs that we want to impact first.
- Do you have accounts that are not progressing through the buyer’s journey? One of the companies we talked to had a 5% Stage 1 to close win rate. It’s important to figure out why accounts are not progressing and execute ABM strategies to improve that KPI.
- Do you have accounts that are taking too long to close? Another company we talked to was in conversations with Mastercard, Walmart and PayPal for 14 months and still not close to a deal being signed. This is where they should be applying ABM. It should focus on accelerating stuck accounts to revenue.
- Do you want to go upmarket and increase your deal? Then, this is where ABM should be applied first.
Instead of focusing on the pipeline, start thinking about the KPIs that tie to revenue growth: sales velocity, win rates, stage progression time, sales cycle time, ARR, retention, CLV.
5. ABM strategies for the complete buyer’s journey
Analytics show that ABM has a far greater impact in the middle and bottom of the buying journey than it does at the top. But, as shown earlier in the article, most GTM teams focus on the beginning of the buyer’s journey. It’s where they’re investing time, resources, and money.
As buyers progress through their journey, the investment drops, when we should be doubling down on accelerating accounts to revenue. And, we should be doubling down again after the deal is closed to retain and expand key Tier 1 accounts. Because GTM teams are focused at the beginning of the journey, they are creating lead engines versus revenue engines.
To create a revenue engine, then you need to create strategies for the:
- 60% of accounts that are stuck in status quo and are not responsive to traditional campaigns.
- Accounts that previously showed intent but disengaged because they did not see themselves in the story that’s being told by sales and marketing.
- Accounts that are stuck in their buying journey as they do not see a differentiation or they are unable to get a buying consensus.
- Accounts that are at risk because decision makers do not recognize the complete impact of your solution and/or sales, marketing and account management teams lost engagement with the VPs and the C-suite after the deal was signed.
- Existing accounts that can provide the greatest revenue growth if only sales, marketing and account management teams can create further penetration within the target organization.
Many organizations have ABM strategies for those that engage but they do not have the strategies above which would help them turn their lead engine into a revenue engine. .
6. Content to support ABM strategies
If you take a good look at the content that organizations push out in social and email communications, you will find that most content does not support ABM. It does not support sales in driving conversations and sales cycles with accounts that are stuck in status quo or in the funnel.
It doesn’t support account management and customer teams in their efforts to reduce churn, improve margin growth and increase customer lifetime value through account expansion. And in most cases, the content is disjointed. It doesn’t lead prospects to the next step once the top-of-funnel campaigns gets buyers excited about the ideas that the company holds so dear. As a result, buyers are feeling around in the dark.
- Those that show intent and are engaged
- Those that once showed intent but disengaged
- Those that do not show intent and are not engaged
- Your existing accounts
In addition to the missing content, you need content for the internal discussions that sales and marketing are not part of. Because the focus is mainly on thought leadership, there is very little content to help buying teams align around their gaps and impacts. We need a feedback loop so marketing can create the content that sales/account teams need for specific conversations with specific accounts. This should be accounted for in your ABM strategy.
7. Integrating social and digital strategies with your ABM strategies
If ABM is about getting accounts to revenue and existing accounts to greater revenue growth, then we have to think about every interaction that GTM teams have with target accounts. We have to think about every touchpoint, including LinkedIn profiles. But recent studies show that 95% of GTM teams are irrelevant to key accounts and customers on LinkedIn.
This is happening even thought LinkedIn’s 2020 State of Sales Report (the same report mentioned earlier in the article) shows that 62 percent of decision-makers look for an informative LinkedIn profile when considering connecting to or talking with business leadership or sales.
If you take a good look at the connection invites and nurture messages you receive on LinkedIn, you’ll notice that the lack of relevance goes beyond profiles. Sales, marketing, and leadership teams are not being personal. As best, messaging are personalized, fill-in-the-blank templates, which GTM teams are speaking “at” accounts rather than “to” human buyers. Might this be the reason over 34% of people note that they think prospecting is going to be the biggest challenge for salespeople.
We need a strategy for going beyond account-based LinkedIn advertising. We need a strategy for profiles, the individual interactions GTM teams are having on social and how it should integrate with the overall ABM strategy.
8. Technologies to support ABM strategies
While ABM should not be defined by your tech stack, the technologies you choose can play an important role as long as it supports your strategy. This includes:
- Intent data platforms like G2 to identify in-market accounts and those that may be looking at your competitors.
- Account-based advertising platforms to drive greater account awareness within targeted accounts GTM teams will approach.
- ABM platforms that will support one-to-few and one-to-many programs so you can take a balanced ABM approach.
- Sales performance and win/loss analysis platforms so you can see why the team is losing with Tier 1 ICP accounts so you can optimize your ABM program.
- Account management platforms that will support ABM for customer retention and expansion.
- Platforms that will provide you with technographic and other data that will help you create your ICP.
The list goes on and on and on for you to blow your sales and marketing budget on. So, you need to stop and think about what is really needed to support the ABM strategy — and how can the tech stack you choose improve ABM execution.
If ABM is about getting accounts to revenue and existing accounts to greater revenue growth then we need to create a path to revenue. That part starts with your ABM strategy, which needs to be optimized and refined over time. You can’t set and forget it.
Many GTM teams start off with strategic intentions and then become tactical. From the very first interaction to the time the deal is closed each move needs to be a calculated move, especially when it comes to tier 1 accounts.
Only a third of ABM organizations are seeing significant business impact and improvement with ABM. It comes down to the upfront ABM strategy work that companies commit to and align on.