What's next after account-based marketing
Account-based Marketing (ABM): An Introduction
Many B2B providers focus primarily on large customers with large projects or purchase quantities. It has always been a central task for sales to target these major customers and bring them to a close. Up until a few years ago, however, there was no clear role for marketing in this regard. Instead, the providers operated mass marketing with enormous wastage.
"Account-based Marketing" (ABM) offers a clear focus on potential major customers. This comparatively young approach is currently one of the “hot irons” in the B2B environment. In this technical article we will present you in more detail the idea behind it, how it works, what advantages it brings and what areas of application there are.
Table of Contents:
- Why a definition is tricky
- Why account-based marketing at all?
- Complex decision-making processes for large accounts
- The essential characteristics of account-based marketing
- Who is ABM for?
- Differentiation from inbound marketing
- What are the benefits of account-based marketing?
- Key account management pioneer
- Different approaches to account-based marketing
- Strategic ABM
- ABM lite
- Programmatic ABM
- What are the areas of application?
- What are the main software tools
- Closing remarks
Why a definition is tricky
The term account-based marketing already indicates that it is Accounts, d. H. to companies, directs. That means: every single target account - either a potential or an existing customer company - we address them individually in campaigns and programs.
The market analysis company ITSMA (Information Technology Services Marketing Association) was the first to use the term in 2004. But it has only been a “red hot” approach in the USA since 2014, ie a trend topic. Since then, this trend has also spread continuously in the German B2B provider landscape.
The rather short definition of ITSMA is:
"Treating individual accounts as a market in their own right."
Translated: Treat individual accounts like an independent market segment.
Despite this first definition of ITSMA, there is no clear, generally valid definition so far. Especially since many definitions have changed over time. In our opinion, one of the best definitions currently available comes from ABM software provider Engagio:
"Account Based Marketing is a strategic approach that coordinates personalized marketing and sales efforts to open doors and deepen engagement at specific accounts."(Engagio, The Clear & Complete Guide to ABM 2016, p. 9)
Translated: Account-based marketing is a strategic approach with which personalized marketing and sales efforts are coordinated with the aim of opening doors and deepening the dialogue with defined accounts.
Richard Grove, Global Director of Marketing, Business Development & Communications at Allen & Overy LLP, formulated another helpful definition:
"ABM is a critical marketing strategy for companies serious about putting clients at the heart of their firm to deliver differentiated value over the long term."
Translated: ABM is an indispensable marketing strategy for companies that are serious about putting customers at the center of their business in order to deliver differentiated value over the long term.
We can already tell from these three definitions four key characteristics of account-based marketing read out. It is…
Why account-based marketing at all?
B2B marketing has redefined itself over the past ten years. It is now very much geared towards demand generation. On the one hand in terms of lead generation or inbound marketing. On the other hand, in terms of individual customer processing as account-based marketing.
There are a number of reasons for this development. The main drivers are:
- Increasing competition: In most industries, competition has become tougher in recent years. The reasons include globalization, digitization and further technical advances, but also political decisions - one example of this is the energy sector. Against this background, it is easier for new providers to gain a foothold in markets that have long been dominated by a few players.
- Better informed, more discerning customers: Google & Co. enable customers to find out about products and services themselves as part of their buyer’s journey. At the same time, they can share their buying experiences on social networks such as Facebook and LinkedIn. This has created new challenges for marketing and sales. You face better informed, more discerning buyers who can choose from a wide variety of offers.
- Customization and personalization: Nowadays, anyone who wants to be successful in B2B business has to do more than just sell. B2B companies need to help their customers in a variety of ways to make their business more effective and efficient. Just like the approach that Don Peppers and Martha Rogers developed with their one-to-one marketing.
- Software-as-a-Service: A huge market for software solutions for marketing and sales has developed since the mid-2000s. Until then, these areas mainly used the Office suite, a CRM system and a few general tools, but today numerous new functions are available to them. Functions with which lead generation and contact development can be largely automated. In the past five years, the market for ABM solutions has also exploded.
Decision-making processes are becoming more and more complex in the B2B environment
The main reason ABM is so effective right now is because of them Decision-making processes in companies. These processes are even more complex and time-consuming than before, especially with large accounts. This is mainly due to the fact that a committee (buying center) with several participants (preparers, influencers, decision-makers) has to coordinate the decision. The participants naturally have different motivations, professional backgrounds and pain thresholds.
The consulting firm CEB (now part of Gartner) showed in its studies in "The Challenger Customer" that a decision-making body consists of an average of 5.4 people. In more recent publications, the authors even assume 6.8 people.
The trend towards ever larger decision-making bodies depends on the one hand on the fact that purchasing processes have become more and more professional in recent years. On the other hand, companies try to secure their decisions even better and avoid risks. Hence, they involve more actors in the process.
As a result, the specialist decision-makers gain increasing weight compared to the technical specialists within a committee. Some experts assume that the responsible IT budget of a marketing manager is now higher than that of an IT department manager.
With classic methods, B2B companies often reach their limits against this background. Account-based marketing is an approach that takes the developments described into account. It enables Programs tailored precisely to individual or industry-specific customer requirements to develop.
The essential characteristics of account-based marketing
There is a fundamental idea behind ABM: Large target customers are so valuable that it is economically worthwhile to tailor and implement marketing programs specifically for them (or for significant customer groups).
ABM is especially then a suitable approach if purchase decisions are primarily made on the basis of strategic relevance or functional and technical properties of an offer. Not just because of the price. In addition, the account should not yet have all the information it needs to make a decision based on its own experience. Because only then can he be influenced with the help of marketing.
The line between marketing and sales is blurring
It is also characteristic that ABM does not draw a clear line between lead generation in marketing and subsequent completion in sales. Rather, the processing of an account is always the joint responsibility of marketing and sales - without clear transfer points, but in close coordination. A (potential) customer is always processed jointly by Marketing and Sales.
At the same time, account-based marketing does not fundamentally differentiate whether the accounts are already customers who should be further developed, or whether it is a strategic new customer with high potential. After all, most accounts with their various branches, areas and (international) locations always have the potential for several deals. However, in such organizations it is hardly possible to graduate within a few months. Sometimes this takes several years.
In addition: not all target customers permanently need investments in the products and services of a provider. Marketing and sales must therefore constantly check the point at which a potential buyer’s own offer is a strategic topic at the moment. The same applies to the question of whether a decision-making process will start or can be initiated soon.
The close alignment of account-based marketing programs to individual companies or segments has to be long-term due to the economic efficiency and the long decision-making processes. ABM is not a campaign or short term measure. It is much more a clear strategy geared towards the accounts. It records all activities towards these defined target customers, plans them fundamentally - and is adjusted if necessary if the desired successes do not materialize.
Due to the close cooperation between different areas (including marketing, sales and service) and the long-term nature of the strategies and programs, the introduction of account-based marketing always means one organization-wide realignment.
Who is ABM for?
The users of account-based marketing are currently mainly in the areas Technology (software, hardware) or Company-related services or professional services (e.g. engineering service providers or consulting companies) active. Due to their complex offers, the associated long sales cycles and their large target customers, these organizations are ideal candidates for this.
The approach is also obvious for everyone Organizations that, due to their business model, can only serve a very specific group of customers. This includes, for example, all automobile manufacturers (Original Equipment Manufacturers - OEMs) worldwide. Each one of them is so important for the total sales of such providers that the profit or loss of an OEM as a customer has a very strong influence on sales. For this reason, such companies must optimally manage their customer relationships.
The same applies Providers with a larger number of target accounts in a certain market segment. For example management consultancies that offer several similar services for companies in one branch (e.g. the financial industry) or in one field of application (e.g. logistics). This is about up-selling similar services and fully penetrating these target customers.
Customerswhere account-based marketing is particularly effective mostly large to very large companies that are often among the market leaders in an industry. Your purchase or order volumes are so high for the offers of a provider that an individual or at least segment-oriented processing makes sense.
The decisions for the products or services offered must always be complex and highly relevant for the customer company. Often they are Products and servicesof a provider is important for the entire organization or several divisions or departments.
Basically: Aligning account-based marketing to individual customers or segments is time-consuming. Compared to generalist marketing approaches, there are significantly higher personnel and material costs. This effort must be worth it. The margin has to be relatively high - just like the contribution margin.
Differentiation from inbound marketing
Inbound Marketing, developed by Darmesh Shah and Brian Halligan, the founders of the US software manufacturer HubSpot, is also one of the modern B2B marketing approaches. It is currently much more widespread in B2B companies than ABM and aims to gain new contacts (leads) who ...
- mostly represent smaller closing volumes,
- accordingly can be won more quickly
- and where providers only have to coordinate with one or a few decision-makers.
ABM, on the other hand, is suitable for B2B companies that do not want to generate hundreds or thousands of leads of different quality in mass markets, but instead focus on key large customers (Engagio, 2016, p. 3).
Inbound marketing relies on the following Basic mechanism: Providers direct interested parties to their website, where they motivate visitors to register with the help of interesting content. Next, they serve their newly acquired leads with additional content offers during their decision-making process (lead nurturing) and finally pass them on to sales. This then takes care of a contract-ready conclusion.
When we talk about a Lead or speak to a prospect, it is not about a company, but about a single person. This can be the central decision maker or the decision maker. But Inbound marketing does not focus on the company or a buying center as a whole. It's always about individuals.
This is another major difference between ABM and inbound marketing. The latter is traditionally focused on acquiring new customers. It only takes customer penetration into account in its further conceptual development (stage “Delight” with HubSpot or “Expand” with Act-On).
Account-based marketing, on the other hand, is not only aimed at those who make their way into the sales funnel due to their own registration and downloads. This can be the central decision maker. But usually several people play an important role and influence the profit or loss of a potential job from a marketing point of view.
A whole account instead of individual people
Logically, the individual activity of individuals is not decisive: Instead of trying to draw conclusions from a person's lead score, account-based marketing calculates one Overall scorefor all employees of a customer company. ABM thus provides a consolidated view of the entire buying center.
Matt Heinz, founder of the US B2B agency Heinz Marketing of the same name, summarizes the demarcation between the two approaches (and his criticism of inbound marketing):
"I see ABM as a response to inbound marketing. Inbound is great, but you don't have control over quantity and quality. You also can't afford to wait until those named account targets happen to find your content and download something. "
Translated, Matt Heinz says: I see ABM as an answer to inbound marketing. Inbound is great, but there is no control over quantity and quality. In addition, you cannot afford to wait for these defined accounts to randomly find your own web content and then download something.
The quote makes it clear: Inbound marketing has a more reactive character. As soon as a company representative finds a provider during his decision-making process and interacts with the website and content there, the lead nurturing process starts. However, there is no active market cultivation here. This has advantages for the profitability of the programs. However, users have to get along with leads who are interested in their offer out of their own motivation.
However, a company that wants to process strategic accounts cannot afford this reactivity and waiting time. Therefore, all ABM approaches (more on this later) have both an active and a reactive side.
Marketing and Sales Alignment
Both concepts also differ in the coordination between marketing and sales, the so-called marketing and sales alignment.
In inbound marketing, we assume that a lead is clearly passed on to sales. Either because a lead wants sales to be approached, or because it has achieved a lead score defined by both departments. If the lead is not yet ready to take a decision or to make a decision, it goes back to marketing. After further development, it will then be handed over to sales again.
At ABM, on the other hand, both departments process the potential customer at the same time and coordinate non-stop on the progress. One time marketing carries out an activity that is supposed to reach the prospect, the other time sales.
What are the benefits of account-based marketing?
For providers for whom large customers are particularly relevant, account-based marketing has clear advantages over other online marketing approaches:
- All activities are aimed at relevant customer companies - and not at everyone who is interested in a topic themselves.
- All contacts in a company or in its decision-making body are viewed and processed jointly.
- Users gain an impression of company-wide or group-wide procurement activities and can focus on them.
- It focuses time and resources on target customers who are most likely to generate sales.
- One ABM success can outweigh dozens of smaller deals like those won in a broad lead generation approach.
- Sales and marketing teams are closely coordinated.
- It is part of a larger program that coordinates all customer-facing resources in marketing, sales, finance, fulfillment, product development, service, support and partner organizations.
- ABM businesses move faster and are less likely to stall.
- It increases the likelihood of a deal, especially with particularly important customers.
Three successful B2B marketing specialists from B2Beacon Marketing have summarized their positive experiences with account-based marketing in a video:
Key account management pioneer
In sales, the idea of an account-based alignment has long been common: The Key account sales concept Following, there are sales employees who are exclusively responsible for one or very few customers. In principle, this is the same focused alignment as we experience with ABM.
These sales employees try to provide their customers with such individual support that they come into play as providers in every relevant procurement. The aim is that your contacts can always turn to their key account manager as a personal contact with a high level of customer and specialist knowledge.
The key account sales focus on supporting the typical decision-making behavior in B2B investments: If customers want to procure a product or service for which they do not know any other provider personally or have not yet developed any preferences, please contact usually first to trustworthy people. These can be specialists and managers in your own organization or former colleagues. But also existing suppliers or service providers.
The key account manager as a representative of a (potential) supplier or service provider tries to build up a position of trust. The customer should - without hesitation - contact their key account manager before looking for a new partner.
However, what most key account management lacks is one strategic marketing componentin order to be able to reach all those involved and influencing a decision-making process with suitable measures. Since key account management is mostly integrated into sales, companies often use the central strength of this area: the individual 1: 1 processing of contacts.
Marketing, on the other hand, works more traditionally - in so-called 1: n relationships. Its measures should serve a larger segment and accordingly suit several or even many interested parties.
There is always an economic decision behind this: The scaling to 1: n is linked to the idea that all activities are economical despite wastage. So if a certain number of interested parties ultimately decide in favor of the provider. In contrast, traditional marketing does not provide for an alignment to a single company.
Account-based marketing adapts this approach
Account-based marketing tries to adapt to the requirements of the target customer just as strongly as key account sales. ABM fills exactly this gap: It uses mechanisms from the 1: n approach and aligns them to ever smaller segments - down to a lot size of 1, a single company.
This in turn is based on the economic conviction that it is worthwhile to focus on one or a few companies. The reason for this is that the benefits - revenue share, customer loyalty and profit contribution - outweigh the costs.
Of course, not every measure has to be completely reinvented: Rather, we often use existing components in the ABM, which are then individualized, reassembled or declined for each branch. A whitepaper, in which the advantages of an offer are described in general, can, for example, be converted to the requirements of certain industries in a relatively resource-saving manner.
Different approaches to account-based marketing
Meanwhile have three approaches to account-based marketing enforced. In a study from 2016, ITSMA subdivided these as follows:
1. Strategic ABM
ITSMA defined in its 2003 definition that it would be useful to To treat "customers like an independent market segment". A market consists of a single target company and is accordingly unique. ITSMA means 1: 1 marketing here.
Technology providers who sell their software or hardware as well as related services to top corporations around the world have internalized this approach. This specialization has financial benefits for them: 84 percent of all marketing employees surveyed in the ITSMA study from 2016 report that ABM brings them the highest profits compared to other marketing activities (ITSMA, Account-Based Marketing Benchmarking Survey, March 2016, N-51).
According to the study, these positive results are possible due to the strong focus on individual accounts. In this approach, a marketing employee is responsible for a few contacts and individually aligns activities and campaigns with them. However, since the cost of individual marketing programs is high, users usually limit this approach to a maximum of 50 key accounts.
2. ABM Lite
At this stage, the marketing activities are not aimed at individual accounts, but at one small group of similar target customers. These are not as relevant as target customers in strategic ABM (or the high effort for an individual alignment is not affordable). Nevertheless, in this way programs can be developed which have small segments with a total number of up to 1,000 companies to edit.
This also makes the technology more important: With a 1: 1 approach, communication with the target customers can largely be done manually. As soon as customer groups are to be addressed in the same way or can be addressed, it is worthwhile to make more use of software tools (more on that in a moment). Users cannot individualize content for these target customer groups. However, they can tailor their content to the common issues of their defined segments.
3. Programmatic (Hybrid) ABM
Users speak at this level hundreds or even thousands of accounts segmented and automated due to certain similarities. An obvious criterion for segmentation is to group companies together based on their industry or other important criteria - for example region or technical equipment. This means that several thousand of them are "editable".
This is the case, for example, when a provider recognizes a visitor as an employee of a certain industry company and dynamically displays the content of his website for this industry. Instead of general information, the visitor now sees the industry content that is right for him, without having to actively make a special selection. The visitors get a very individual experience, as the marketing relates to a very central momentum of their business activity. The transition from programmatic ABM to classic B2B marketing is fluid here.
Companies choose the ABM approach that best fits their profile based on goals, resources and target customers. Or they combine individual approaches or start with one approach and add more at a later point in time.
What are the areas of application?
Account-based marketing is primarily suitable for three central areas of application:
Acquisition of new accounts
With the help of highly individualized, valuable content, we can address particularly promising major customers in a targeted manner. As a result, B2B providers ideally position themselves as experts who are familiar with the challenges of the respective target customer. And offer suitable, value-added products and services for this.
Imagine e.g. For example, suppose you work in a web design agency that the Rewe Group would like to acquire as a customer. To do this, your agency could create an analysis of Rewe's web presence and offer a detailed report on its own website for downloading free of charge.
However, not all visitors to the site will see this report. It is a matter of dynamic contentwhich only appears on the screen for a selected group. In this case with the Rewe managers. These are recognized on the basis of their IP address and provided with the appropriate content.
Of course, you cannot automatically assume that Rewe executives will come to your website on their own initiative. That is why it makes sense to also start an online advertising or e-mail campaign to make your target group aware of your high-quality offer. Experience shows that such campaigns have an extraordinarily high success rate: Because it is very likely that a decision-maker will click on an ad or open an e-mail in which such special content is advertised.
The prerequisite for this is, of course, that your content is interesting, relevant and valuable enough to attract attention. For example, because your content contains a concrete value-added promise that promises improvements in a certain area of the company of the key account. In this way, you are making an offer to your target group that they cannot refuse. As a result, you are unlikely to be left out when making a decision.
If you are already in contact with a target account - for example because it has already downloaded a whitepaper from your website - you can "feed" it with relevant content.
As part of this account nurturing, the use of ABM gives you more funds than classic lead nurturing. In addition to e-mail campaigns, you can provide your target accounts with all decision-makers with relevant information using ABM tools (more on this in a moment), for example via your website or online advertisements.
It is possible e.g. B., dynamic websites for single accounts or account segments on which they can only find information that is relevant to their organization or industry. This gives you the impression that you are dealing with a provider who specializes in overcoming your individual challenges.
In addition, ABM is also suitable for supporting up- or cross-selling processes. Would you like to B. Selling additional products and services to an existing customer, individual nurturing measures and relevant content are two very effective tools.
For example, if your customer has bought a basic version of your software, it makes sense to point out the advantages of updates and additional services. In such a scenario, it would be conceivable to write case studies in which you express the advantages of the premium version of your product. So your customer not only recognizes the associated advantages. At the same time, he sees that one of his competitors is already benefiting from these advantages.
What are the main software tools?
It stands to reason that any ABM definition is influenced by two factors:
- current technical developments
- and the new properties of the software products offered or the marketing interests of the providers.
This is where the strongest impulses can be expected in the coming years: The software manufacturers specializing in ABM have received the necessary financial resources from venture capital in recent years. That is why they are now increasingly gaining customers who bring their individual needs and ideas on the subject of account-based marketing to the further development of existing software solutions.
Nevertheless, there is currently no software tool for account-based marketing that completely covers all tasks. Especially since the software market in this area is still characterized by high volatility. Nevertheless, there are a number of programs that experience has shown to be of great help. Here is a selection of the currently most widespread software offerings:
With the help of Sales intelligence and social selling platforms Like InsideView, B2B marketers can identify target customers, access real-time insights and activate individual points of truth for opportunities. The platform specializes in data accuracy as well as context-relevant and relationship-based insights. Therefore, it makes it easier for ABM users to better understand company-related factors. InsideView offers interfaces to many other B2B marketing tools, including CRM systems (e.g. Salesforce) and marketing automation systems (e.g. Eloqua).
Bombora is particularly suitable for finding out to what extent target accounts are currently in a decision-making phase. It is a special ABM tool that monitors and categorizes 30 billion content views per month from 3.4 million companies on around 3,000 websites. You can use this data to determine, among other things, when your target accounts are consuming more content than usual on certain topics.
Customer-related marketing software solutions like Demandbase enable you to coordinate your advertising, marketing and sales programs within one tool. This enables, for example, the identification of key accounts, targeted advertising, the personalization of content and the automation of marketing. The software helps B2B marketers analyze the performance of campaigns and ads for individual accounts.
Engagio is one of the best-known ABM analysis tools. Users can use it to combine account data from several internal and external sources and, based on this, design multi-channel strategies. In addition, the software provides a large amount of data that are suitable for analyzing your program.
Terminus is very well suited as a portal for testing and launching targeted display advertising. You can define your target groups very precisely, from the company level to the departmental level to individual decision-makers. In addition, the software enables each of these segments to be reached with advertising campaigns in the areas of web, mobile, video and social media. This also works without the contact details of individual people. The tool also provides detailed reports on account and campaign level as well as interfaces to programs such as Salesforce and HubSpot.
There are of course a whole range of other tools - including those that we work with to perform special tasks. Please do not hesitate to contact us!
Account-based marketing is primarily about collecting and analyzing all relevant information about a target customer. Every activity, every contact with him should pursue one goal: That he feels understood and that his decision-making processes are supported.
The aim of researching the collected data is to identify essential information:
- From the customer's point of view: How well does the relationship between provider and target customer work?
- How does the target customer generally see the provider? And how does he rate his work?
- What are the target customer's business needs and plans?
- What kind of corporate culture does he have?
- Are there any principles that he maintains in his shopping behavior?
Inbound marketing can help find out whether a potential buyer (in a target segment) is preparing a decision. It shows you when individuals who have registered in advance are interested in your topics. This person can then be edited via email, website personalization or sales development.
ABM offers you new possibilities
Account-based marketing goes one step further: It shows you that an entire company orDecision-making body consumes freely available information about your website. This enables processing via the website, intelligent email marketing, retargeting and sales development.
On the one hand, the collected research data provide significantly more information about decision-makers and committees. On the other hand, they reveal - due to the interactions of different employees also on other websites - that a decision-making process is ongoing. This information can in turn be used in inbound marketing, in ABM and in sales to process leads and opportunities.
Inbound marketing reacts to individual contact persons in a company. Account-based marketing, on the other hand, makes it clear to what extent companies are concerned with a decision and actively triggers them to deal with this decision.
All sources together provide important insights into the buying center. Because investments and assignments still come from several people - and not from individuals and not from something abstract like a company. These decision-makers can be actively processed if they can be recognized and addressed via inbound marketing or past projects.
Otherwise there is only the way via ABM: Individual key accounts with their committees are processed intensively and individually with outbound and e-mail marketing, retargeting and website personalization. You can penetrate important top accounts less individually, but more intensively. And the broad mass of companies that you can assign to an industry, you can generally process with an industry individualization.
If you would like to know more about whether and how account-based marketing can be carried out for you, we are happy to talk about it. Simply arrange a free, non-binding consultation with us!
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