When marketing was transformed forever when it became a predominantly digital endeavor. The previous generations were exposed to marketing only when they turned on the TV or the radio or read the newspaper. Today, every second we spend looking at a screen is an opportunity for marketers to grab our attention. Youtube videos, social media posts, podcasts, emails… It is a never-ending torrent of messages pouring in from all sides.
But this does not mean modern marketing campaigns are necessarily more effective than campaigns of yesteryear. Actually, if anything, marketing people are spoiled for choice today. You may be posting on social media, shooting emails left and right, or churning ad copies all day long, but thousands of other marketers are doing the same thing. The day is still only 24 hours long, and people have infinitely more marketing material fighting for their attention. Something needs to be done.
That ‘something’ happens to be account-based marketing (ABM). We will take a long look at this concept and its implementations in this blog post.
Account-based marketing is a strategic marketing approach that treats each prospect or customer account as a market segment of its own. The approach is based on a sharp focus on understanding the needs of individual accounts and creating personalized messaging and content tailor-made to address those needs. ABM aims to deliver messaging that will stand out in a sea of marketing initiatives potential customers are subject to throughout the day.
ABM has emerged as a viable strategy to rise above the marketing noise.
ABM differs from traditional marketing with regard to the funnel used and how marketing and sales functions are aligned.
Personalized content is the go-to tactic for ABM practitioners.
ABM can help streamline customer acquisition, increase customer lifetime value, and bring about an increase in marketing ROI.
ABM is not feasible for smaller accounts and in the absence of an established marketing function.
The global ABM market is expected to reach $1.6 billion by 2027.
A report commissioned by ABM Leadership Alliance found that ABM brought about a 171 percent increase in average annual contract value.
A CEB study found that customers were 40 percent more willing to buy from a supplier who provided personalized content than those who did not.
The global search rate for the term “account-based marketing” has increased by 50 percent over the course of the last five years, which is a sign of the growing interest in this particular strategy.
Graph showing the increase in the global Google searches for the term "account-based marketing" over the last five years. Image credits: Google Trends. The image was slightly modified for aesthetic purposes.
ABM brings structure to the marketing efforts and introduces a systematic approach that is repeatable and scalable. Here are the steps involved in an effective ABM campaign:
The ABM strategy emphasizes prioritization. Its practitioners start off with the recognition that you can’t appeal to anyone and everyone at the same time and, thus, decide on a shortlist of high-value accounts they will pursue. The election criteria for this list may include some combination of parameters such as
- annual contract value,
- plans to hire new people to expand the growth team,
- having raised a Series A round,
- using products at a price point closer to yours,
- using ten or more SaaS tools.
In the ABM framework, calculating a customer score goes a long way toward differentiating between different customer profiles and deciding which group should be a priority. A customer score is composed of intent and engagement components.
Understanding the customer intent sheds light on how customers came into contact with a brand and what their thought process was.
The engagement component focuses on the different actions customers take to get to know a product better. Visiting the website, watching a demo, or signing up for a free trial indicates different levels of interest.
By assigning different weights to actions indicating intent and engagement, ABM teams can come up with meaningful differentiation between target accounts, which brings us to our next topic.
Just identifying the target accounts is not enough, though. These accounts should be categorized into three based on the value they offer and the amount of marketing resources each of them will demand.
Tier 1 accounts are your highest-value targets. They perfectly represent your ideal customer profile (ICP). Success in reaching out to these accounts requires a one-to-one approach where the content you use will be extremely customized to the needs of these prospects.
Tier 2 accounts offer medium account value. Their size does not justify the extreme personalization required by Tier 1 accounts. Still, ABM teams should identify the common characteristics of the accounts in this category and employ a one-to-few approach, creating campaigns personalized to specific verticals or jobs.
Tier 3 consists of the lowest-value accounts on your list. A one-to-many approach relying on technology with little personalization makes sense for this category.
Personalization is the go-to move in ABM. In order to determine what content to offer to whom, an ABM team should look for ways to enrich the existing data about these accounts. Past business relationships can be a good source to contextualize the target accounts on the list. Social and professional networks and B2B databases like Zoominfo, Demandbase, or Clearbit are other sources ABM teams can turn to when they decide to enrich their data and form detailed customer profiles.
Once the data is sufficiently augmented comes the content creation stage. Content creation has to start with understanding where in the customer journey a particular account is and the type of content it should be offered.
Educational content like blogs and podcasts are top-of-funnel tools that work well to create awareness in target accounts.
For accounts that have passed from the awareness stage into the engagement stage, a whitepaper or a quick demo can showcase the capabilities of the platform.
For prospects showing serious buying intent and high levels of engagement indicating conversion potential, pricing and feature comparisons and case studies are a good fit.
Personalization is the key concept here. A target account should be nurtured through continuous delivery of bespoke content that leads him/her down the sales pipeline.
Companies use ABM to raise awareness, increase engagement, and generate more lifetime value from targeted accounts. The number of visits to a blog page, downloads of an e-book, or demo and free trials signed up for can all tell an ABM team about the level of interest they managed to engender in their target accounts. However, the more meaningful indicators are the reduction in the sales cycle and the growth in the average annual contract value ABM was able to create.
Traditional marketing comes up short for a company offering a wide range of products and services to a similarly wide range of customer profiles. A blanket marketing campaign without the necessary nuances naturally dumbs down the messaging and dilutes the value proposition for different ICPs. Suppose your company manufactures sports bikes, bicycles, and electric bikes all at the same time. In that case, you will have trouble attracting any customers interested in one of those categories without specifically targeting them.
Two major points of differentiation between traditional marketing and ABM are the funnel and the way marketing and sales cooperate.
Traditional marketing aims to build a brand first, which is expected to drive inbound leads. In order to build the brand, traditional marketers use mass media, trade shows, or mass emails, doing everything at scale.
The marketing funnel in traditional marketing is wide at the top and keeps getting narrower at every stage until sales manage to close a few deals. Traditional marketers believe that there is strength in numbers, so they cast a wide net with the hope that it will land them many leads, which they will later qualify and hand off to the sales.
The ABM approach turns the marketing funnel on its head and works with an inverted funnel. It is a targeted approach that prioritizes quality over quantity. ABMers focus on a small group of accounts that are potentially best-fit customers for the product. These accounts tend to be more receptive to the messaging, which reflects their needs and pain points. Once the demand from these high-value customers is satisfied, ABMers move on to the next best group, a Tier 2 if you will, and expand into different segments or verticals like that.
Traditional marketing aims to generate as many leads as possible and send them down the funnel to sales. The responsibility of the marketing function is limited to providing the sales function with opportunities they can close.
The ABM, on the other hand, involves a different approach. ABM guru Hillary Carpio states that field marketers, ABMers, and sales development teams need to work hand-in-hand, describing them as a “one-team pipeline machine.” Together, they work to identify the accounts that will be targeted to put the sales team in the best position to close deals. ABMers help field marketers understand what people in a particular region are interested in and which ones among them seem more engaged.
The sales function owns the list of accounts to be targeted in an ABM framework. But every account on that list must be studied by marketing and sales. These two functions first focus on how a prospective customer has come into contact with the product and what kind of engagement (a visit to the website, reading a few blog posts, a demo etc.) he has had with it. The next step is to identify the touch points from that engagement and build a targeted marketing campaign around them. Marketing and sales do not work sequentially but side-by-side in the ABM, from the identification of the target account to the closing of deals.
The ABM strategy is based on ICPs, and its success is predicated on how well these ICPs represent reality. General assumptions about the industry won’t help. Practitioners of ABM need to have a profound understanding of the traits of the ICP. This involves calculating the total addressable market, identifying key stakeholders, studying the tech stack used, and understanding the jobs people are trying to get done and their pain points.
ABM requires zeroing in on a shortlist of accounts. To make sure that these are the best-fit customers, ABMers should gather as many data points as possible to enrich the customer profiles. The more information you have on the industry, company size, revenue, key decision-makers, current product range, and future investment or product launch plans, the more precise your ABM strategy will be.
Some ABMers tend to get a bit formulaic with regard to how they implement the ABM strategy. They pick tactics from the ABM playbook in sequential order without putting much thought in it, starting with paid ads first, then sending emails, inviting the prospect to a demo, or sending him a gift.
However, prospects will not respond positively to marketing content that is not in line with their intent and engagement level. A demo invitation won’t work with customers who are not yet aware of their problem. Similarly, a prospect who visits your website and consumes your technical documentation is probably too far along the curve to be sent a generic email or a blog post. Exposing these two groups to the same ads would be a waste of money spent on paid ads.
The differentiating aspect of ABM is the personalized playbook it envisions for each targeted account. Offering each and every account bespoke content is easier said than done. It is the main reason ABM is such a resource-intensive strategy.
The success of your ABM strategy is directly related to how well you customize your messaging to the needs of your targeted accounts. However, applying the same level of personalization to every targeted account is neither possible nor desirable. Your limited resources and creative energy should be focused on your most valuable accounts. This includes writing blog posts, creating ad copies, designing landing pages, developing onboarding processes and selecting personalized gifts tailored to different accounts, and being present in channels they prefer.
Serving your Tier 2 and Tier 3 accounts with hyper-customized content is not feasible. The content these accounts will consume will be less differentiated but still relevant to their needs.
ABM is predicated on the belief that there is no one-size-fits-all solution in marketing. Blanket assumptions lead you to nowhere because each account is different and, thus, requires tailored messaging. The beautiful thing about getting to know who your target accounts are is you don’t have to rely on emails or social media posts to start a conversation with them.
LinkedIn direct messages, paid ads, social media posts, email, and direct mail are indispensable to ABM practitioners. However, once you enrich your data set with data from your CRM or a third-party data-gathering tool, you should step out of the digital world and meet your target accounts in trade shows, conferences, or product launch events. ABM makes this possible by teaching you where your target accounts are, what they are interested in, and what they plan to do in the near future. Capitalizing on the human touch is what makes ABM so effective.
ABM is “a concerted effort to deliver the right message to the right person at the right time to increase the go-to-market effectiveness” and forms a “three-legged stool” with field marketing and sales development.
In a traditional marketing framework, marketing and sales are evaluated on the basis of their own distinct goals. Marketing is charged with generating as many qualified leads as possible for sales. The measure of success for sales is the deals closed.
In an ABM framework, however, leads are not handed off from marketing to sales. These two functions work together to design the whole pipeline, from identifying the high-value accounts to determining the critical contacts within each account to course-correcting based on the feedback from the field. Instead of evaluating sales and marketing on their own, the whole ABM pipeline is graded on the percentage of accounts engaged and revenue generated.
“You can't do a direct, ‘this asset led to this lead that led to this meeting that led to this opportunity;’ there is no direct ROI in that sense. So we're looking at the overall targeting of the account and surrounding of the account and how the impact compares to other accounts with a similar profile that did not get that same treatment. So I'm looking at the lift of ABM targeted versus ABM engaged.”
Make sure to check out this video by Hillary Carpio for a deep dive into how ABM can help align marketing and sales.
ABM, when implemented right, is capable of creating a customer acquisition engine. Instead of throwing it against the wall and seeing what sticks as is usually done in digital marketing, ABM suggests a more methodical approach, working its way from the ground up.
The research conducted on the accounts to be targeted, zoning in on an ever smaller segment of the market that matches the ICP, engaging the target accounts through personalized content, and then expanding to other stakeholders within the same account are steps that cumulatively increase your chance of closing a deal. With ABM, you have a list of high-value accounts that fit your ICP and content customized to their needs, which means that you are never lost as to how to approach potential customers.
ABM leads to shorter sales cycles simply because the sales teams do not have to waste time vetting the leads or starting from scratch to get potential customers interested in the product. The names on the target account list are closest to how the marketing and sales teams would describe the best-fit customers of a company. These accounts show differing levels of intent and engagement, which the sales team can capitalize on. Your best-fit customers tend to be the most receptive people to your messaging, so a significant reduction in the sales cycle is only natural.
ABMers work with high-value accounts that are a better fit for the product or service being offered. For ABM to make sense for a company, tier 1 accounts must have an ACV of at least $15,000. These people tend to be power users who make products they like a bigger part of their lives. They respond better to customer loyalty programs. They are more likely to agree to upselling and cross-selling offers. As a result, they generate more revenue for a company over the course of the business relationship.
The meticulous customization of messaging and marketing content in ABM involves more upfront costs, but this focused approach helps land significantly bigger contracts, more than making up for the costs incurred. A well-implemented ABM plan takes into account the customer-journey fit and adjusts content accordingly. Doing this minimizes the risk of delivering emails, paid ads, or demo invitations to people who would not be interested and ensures more efficient use of company resources.
ABM fits like a glove to the marketing needs of B2B SaaS companies catering to the enterprise and mid-market. However, to make the most of ABM, you company should meet certain requirements:
ABM is an expensive strategy to pursue. Like in the manufacturing sector, the more you rely on customization, the higher your costs are. To justify the investment in ABM and the staff that will drive it, experts like Brandon Redlinger believe that the annual contract value should be more than $50,000 at the minimum. Yet, there are other practitioners who argue that technology has brought that threshold down. It is difficult to put an exact number on it, but it is safe to assume that contracts smaller than five figures won’t be enough to cover the costs you incurred. B2C offerings with short sales cycles, smaller average contract value, and high velocity are not suitable for an ABM strategy.
Creating personalized content for targeted accounts and different stakeholders under each account on a regular basis is quite a challenge. Most of the time, the resources of a startup won’t allow it to pursue an ABM strategy at scale. Usually, an ABM team involves five main roles:
ABM manager: This “integrated marketing manager” aligns everyone else around a program, manages the budget, determines the KPIs to track, and plans the whole campaign.
Researcher: This professional brings together the data that will be used to form ICPs and enriches that data with CRM data for further customer segmentation.
Content marketer: The content marketer will be responsible for creating personalized content in different formats that will be used in emails, ads, or landing pages.
Designer: The high rate of content creation necessary for ABM makes it difficult to outsource this function. A designer will bring a coherent design language to the content created for different accounts.
Sales development representative (SDR): SDR is the field component of the team that drives the engagement with target accounts, making offers, and providing the ABM team with feedback from the field.
ABMers have to deal with a group of stakeholders, often referred to as a buying committee, rather than a single decision-maker, as in B2B marketing. Each target account involves three main roles ABMers should engage:
Everyday users are the people who personally use a product to get a job done. Being in a position to benefit the most from the product, they are likely to become the champions of the purchase decision in their organizations.
The manager oversees the way the product is used, evaluates the benefits, and gives feedback to the executive who is going to make the financial decision on the product. They are potential influencers with clout to impact the final purchase or renewal decision on the contract.
The decision-maker signs the check and makes the final financial decision to purchase the product or not. Input from influencers can have a significant impact on this final decision. Similarly, blockers who oppose the purchase because they don't believe in the benefits or favor some other solution can sway the decision.
Daily users are more receptive to digital marketing campaigns, and it's possible to engage them by giving them exceptional customer support and ensuring their success.
A personal touch from the ABM team would be better for the people in the manager role. Educating them about the product's benefits and converting them into champions can pay off in the long run.
A return to traditional marketing tactics is justified to win over the decision-makers in executive roles. It might sound awkward for a SaAS company to consider, but the good ol' wine & dine tactic is still the go-to move to build relationships with executives and land big enterprise contracts.
ABM is getting increasingly popular among companies unsatisfied with the results of conventional marketing practices. Here are three examples where companies leveraged ABM to zero in on a specific problem and achieved impressive outcomes:
When the pandemic disrupted life in the office and made remote work a necessity, in-office snack platform Caroo was caught off-guard. With its revenue plunging, the company reimagined itself as a corporate gifting platform for remote teams.
Caroo employed a well-planned ABM approach leveraging highly personalized content for different use cases and verticals to increase traction.
The team at Caroo was able to pique the interest of distinct customer segments by launching microsites tailored to specific customer personas.
The Caroo team was able to engage 85 percent of the accounts on its list. This impressive rate was a testament to the effectiveness of Caroo's approach and how well its microsites resonated with the customers it targeted.
TigerConnect, a software company with a product facilitating clinical communication, had trouble driving enough traffic to its website with its advertising strategy based on low-volume, high-intent keywords.
TigerConnect brought in Directive Consulting to devise a new marketing plan. Directive suggested a targeted approach focusing on more narrowly-defined customer profiles that could be a good fit for the product.
Directive started by creating educational material focusing on the lack of communication in clinics to support the ad campaign. It then introduced an ABM strategy going after people with specific job titles and skill sets on LinkedIn, who looked most likely to respond positively.
Directive's LinkedIn move increased paid lads by 31 percent and decreased cost per action by 71 percent quarter-over-quarter. At the price of a 15 percent increase in LinkedIn ad spending, TigerConnect enjoyed a 111 percent increase in visitors from this platform.
The mobile attribution platform Branch was having trouble increasing its conversion rate. The sales and marketing functions were not aligned properly, undermining the company's gifting strategy by extending to two months the time it took to pick out and send gifts.
Branch doubled down on its ABM campaign by introducing the gifting platform Alyce and decided to take its ABM game up by a notch by following a multi-channel marketing strategy.
The marketing team at Branch also started leveraging emails, social media, and phone calls to multiply the points of contact with the targeted accounts.
Branch achieved better personalization in gifting through the use of Alyce, a corporate gifting platform. By adopting a multi-channel strategy, the marketing team used emails, social media, and phone calls to multiply the points of contact with the targeted accounts.
Streamlining the gift selection process reduced the time it took to tailor gifts to minutes. Branch was able to land two six-figure contracts thanks to its dedicated use of the ABM strategy.
Pulling in data from different tools and building a single view of truth is Peaka’s forte. Its connectors streamline data integration for startups and SMBs, connecting the most popular SaaS tools.
Peaka’s HubSpot-Stripe integration has a major role to play for ABM teams. This dedicated connector helps users merge their revenue and CRM data, making it possible to filter companies with specific levels of revenue according to the company size, industry, and country.
Armed with Peaka’s data integration capability, ABM teams can
- Zero in on accounts that provide the closest fit with the ICP they identified before,
- Enrich the revenue data with customer attributes,
- Form the three-tiered customer segmentation that is so central to the ABM strategy,
- Create better and more engaging content, increasing the likelihood of conversion.
- Video – Goods to Selling High: How to Make ABM Actually Work with Snowflake's Head of ABM, Hilary Carpio
- Podcast — ABM (Account-Based Marketing) Overview
- Podcast — ABM with Hillary Carpio (Head of ABM at Snowflake)
- Podcast — How to Define, Measure and Hire for ABM with Hillary Carpio
- Article — ABM strategy: The Step-by-step Guide for B2B Companies (2023)
- Article — Why SaaS Embrace an Account-based Marketing Strategy
- Article — ABM for SaaS: The Definitive Framework
ABM is the right kind of marketing for any company with the average contract value to justify its costs. Its step-by-step approach to marketing aligns different functions around a single purpose, helps build long-term relationships with customers, and increases the lifetime value of contracts.
Successful implementation of ABM requires thorough research into customer attributes, high levels of personalization, a multi-channel presence, and a multi-pronged approach to win the hearts of different stakeholders in an account. Nobody can claim that ABM is easy to execute, but the rewards are so enticing that it's all worth a try for anyone that can afford it.