The Modern Approach to Account Based Marketing

Account-based marketing plays a critical role in the growth of many businesses across a variety of industries. However, many marketers often rely on ABM when it may not be the best fit. In addition, what worked for account-based marketing even just a few months ago, may not be the most optimal strategy for marketing today.

In this article, we’ll explore how account-based marketing has changed over the years and whether or not it should be your focus. We’ll also explore in detail the many factors you need to consider to do ABM right.

Account-Based Marketing (ABM) isn’t new

While reading a book called “No Forms, No Cold Calls & No Spam” by Latané Conant, I came to the realization that many vendors try to position ABM as a $40,000 technology stack problem.

The book dedicates quite a few pages to the ‘customer-centric stack’ and argues that because you’re now able to know when someone is in the market for a solution like yours [via IP lookup or 1st or 3rd party intent data], you don’t need to “spam” them.

Here’s the irony though— even though potential customers may be in the market for a solution like yours, you still need to deploy the traditional sales/marketing strategies to convince them to make a purchase.

While it is true that technology has enabled us to create more personalized & relevant experiences for prospects & allowed us to target people in very specific ways, it can also quickly approach the point of diminishing returns.

The marketing industry, like most industries, like to invent new terms to recycle old concepts. And in the case ABM, that’s exactly what has happened. Account-Based Marketing has in fact been around since the 1940s. When sales made a list of logos they wanted to sell, or the list of ‘dream customers’ to close. In those days we just called it sales.

The concept remains the same today with modern ABM—we want to sell to a list of ‘dream customers’ more commonly referred to as target accounts.

So what’s the difference between sales and account-based marketing? Technology has both enabled us and added needless complexity to the process.

Dave says it best (who ran ABM at Marketo & Bizible)

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ABM is outbound with marketing support

What is account based marketing?

At the core—ABM is smart outbound.

Marketers use different ‘signals’ to determine which prospect is in-market for a solution. ABM is the process of trying to determine which accounts fit your ICP & are currently in the market based on a variety of factors, such as visiting certain websites or heavily involved in researching for solutions.

The book, “No Forms, No Cold Calls & No Spam” does not explicitly say it but, the signals you capture during AMB feed into an outbound email sequence or ads to get someone to your website and fill out a form.

The fact that a prospect is in-market for a solution like yours does not by any means imply or guarantee they are going to buy your particular solution. Of course, you need to email & call & ‘spam’ prospects. They won’t magically show up at your doorstep and sign a $100K cheque. Choosing the right customers to target is the foundation of any effective marketing strategy.

Who does ABM make sense for?

If you’re selling B2B, you know it’s a wide and competitive market. As a company selling to other businesses, you can be selling a relatively straightforward piece of technology “off the shelf” to small businesses to the end-user who is also paying for it. In that case the amount of money a customer pays you is low, but you sell at a higher volume so you sell more but at a lower price.

The way you sell & market will be different. Compared to selling sophisticated software bundled with professional services to large enterprise companies (Fortune 500) which involves navigating a lot of complexity in the buying cycle.

For example, multiple departments and the person(s) buying the software are not always the only people who will use it today, the people paying for it are often neither users nor buyers (procurement.)

In this scenario, the customer is paying a few hundred thousand ($100,000+) but you have a low volume, high ticket price + addons. Again, the way F500 buy software is very different from the way you & I pay for productivity tools or how small businesses buy software. This distinction is something many marketers often mix.

In most cases, ABM should not be a standard go-to-market (GTM) strategy. Sorry, but ABM is not B2B, nor is it right for all markets, business models, or companies (just like every company should not be running freemium aka PLG for acquisition.)

Which brings us to our next question:

Is ABM right for your business?

Is ABM right for you?

The rule of thumb I follow is:

Small TAM & High ACV > $30,000: In this range ABM likely works because there’s a narrow set of accounts you can go after. For example, Guestlogix sells to airlines, where there’s a finite # of customers & they are higher ACV ‘enterprise’ customers with higher retention. The higher ACV or value of a customer justified a more high touch & expensive campaign to convert a customer—like buying billboards around airline offices & conferences.

Larger TAM & Small ACV < $10,000: This range relies on primary inbound and Demand generation GTM because the market is big enough & there’s likely existing solutions & demand that you can use to deploy SEO, social, and content.

The lower ACV also means the switching costs are low, churn is likely higher & the lifetime value of a customer is lower. You want to deploy low-touch campaigns to convert a higher volume of customers.

That’s a high level view, now let’s walk through an example scenario for each:

Most B2B sales cycles are account-based and not end-user-based. Borrowing from the example above—with SMB buying cycles, the customer worth is lower & the complexity & requirements aren’t sophisticated. In this case, you can do high-velocity sales or self-service— and let customers self educate & self onboard without the need to talk sales because it’s straightforward enough no additional help is needed.

In most cases, this model is also beneficial for the company because a lower price point doesn’t leave much room to support a complex sales & marketing process—hence keeping the costs of selling low & leaving margin for profits. This is why you’ll typically see companies in this market running inbound/freemium to acquire customers..

On the other side of the coin, With a F500, the needs are very complex (SSO, Compliance, Security, SLA .. ) but the customer is also worth a lot more on a lifetime & annual contract value basis.

Since it’s a more complicated buying cycle— this means there’s more ‘overhead’ involved in selling & marketing the product. Consider the complex sales infrastructure, long sales cycle, marketing teams to help move to generate interest.

As a company—there’s more room to have the infrastructure to support these sales & post sales activities because each customer pays a significant amount of money to help cover the overhead & cost of goods. In this case, it makes more economic sense to invest more to acquire a customer because the net worth of a customer is much higher.

This is where you’ll see more ABM plays. Selling into a larger organization involves different stakeholders. And to sell into an account you need a beachhead [to borrow from Crossing the Chasm] that is one person or department to get the first foot in the door.’

Marketers can be self-centric

In my experience, marketers like to give themselves too much credit. We like to think we drive the business forward more than we actually do. Any business has a lot of moving parts, and marketing is just one part. In the case of ABM— it’s actually more accurate to say ‘outbound sales’ with marketing playing a supporting role function.

ABM tech vendors want to win all of the awards to help them sell more customers and create “FOMO.” Technology has enabled us to create better and more relevant experiences for prospects and allow us to target people very specifically.

Think Facebook ads based on demographics & interests & improved attribution down to every single click. But as I mentioned in the intro, it can quickly approach the point of diminishing returns.

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The core challenge of ABM is finding the right accounts. Sounds simple.

Unfortunately, this is the part of the practice that does not get the attention it deserves. It is the unsexy work—slicing & dicing your customers (not literally) to find common patterns such as industry revenue, location, and finding more companies that fall into a similar bucket.

ABM Technologies Landscape

As with martech, the landscape of vendors providing ABM tech is almost endless. There are traditional CRM / MAP tools that can be jigged for ABM or new-age solutions that need to be integrated into your CRM, to be valuable. Then there are the systems trying to be the all-in-one solution.

The irony (for most 3rd party tools or “next gen Martech tools’) is you still need a CRM or MAP and sales automation to run it with. It’s always in addition to your tech stack & an additional cost on top of everything else.

Here’s a breakdown of a few:

DemandBase

  • 6Sense – same as DemandBase, in-fact they might just be direct competitors.

6sense

  • Terminus is more focused on the ads side and helps to deliver display ads to the right accounts through a mix of 1st & 3rd party cookies & IP. They’ve recently added the ability to create lists & manage accounts inside the platform but you still need to plug it into a CRM.

  • Engagio [RIP] was one of the original ABM vendors which started combining different data streams & actions into a single platform like ads & communications along with contact & firmographic data. Engagio was one of the first to talk about the new ABM but had mixed reviews in the market.

Most of these tools start in the $40,000 – $60,000 range annually.

ABM doesn’t require a separate technology stack

Now you might be wondering, that’s a lot of stuff, do I really need ALL of those things to do account-based marketing?

The short answer is no.

You don’t need any tech to do account based marketing. In fact, if you’re running outbound campaigns you are probably already doing some shape or form of ABM. To get started, sit down with your Sales & CS teams to understand who is your best customer. Schedule some customer interviews & get a sense of why they buy your solution & what the value is—this is table stakes for any good marketing & product strategy.

Identify what category you want to focus ABM efforts on.

The different flavors of ABM

1: 1 —> High value accounts (high ACV) where a lot of effort is focused on winning specific accounts. This can mean small private events just for that account, direct mail. Custom ebooks/webinars & highly targeted ads & marketing (i.e. a billboard in front of a HQ location).

Few —> Segmenting accounts by a common denominator (such as geo, industry, vertical, use case) & structuring your marketing around those common themes instead of creating one off custom assets & campaigns.

Many (demand generation) —> Some folks also consider 1:Many as a type of ABM (to me that is demand gen). Example is programmatic ABM Ads (IP Based) vs Search/Social Ads (Intent/Interest based)

Depending on your target market—you may want to deploy 1:1 ABM. As you think about your ABM strategy—think strategically about appropriate technology stack to support your efforts.

Now the $60,000 question is—do you need to invest in something like 6sense or can you build your own stack with point solutions?

Our thesis is that you can use point solutions to build your own stack aka the $500 ABM Stack without investing in all-in-one expensive tools that vendors want you to buy (but that’s for another post.)

When considering your options, here are some things you should consider.

Reverse IP Lookup

This is used to determine who is anonymously visiting your website. Typically with most marketing & sales systems, you need the prospect to become a ‘known’ contact via form fill.

When someone lands on your website where there’s tracking code (for example Hubspot) the javascript will drop a browser cookie. The cookie is tied to the browser & tracks their activity on your website as an anonymous visitor.

Once they fill out a form (using the same browser & not having cleared cookies) the cookie is then associated with the contact created in your CRM—and it de-anonymizes all their activity from when they first landed on the site to the point where they fill out the form & activity.

What is happening is that Hubspot says— Cookie ID 16261XTY is now Kamil Rextin and from that point forward all activity from the same browser is associated with me. However only 3-10% of people will fill out a form on your site & at any given time—so what about everyone else?

You can IP look up tools to de-anonymize the activity. Now keep in mind that this is not tied to an individual—rather it’s based on a company. How these tools typically work is they have a DB of known IP addresses & their associated companies + third party cookies & triangulation & associated people. They then use the IP address coming to your website and try to match to a database of known ‘companies & people’.

Caveat, if people are working from home—using LTE or 4G—most of these tools won’t work so it’s important to take that into consideration

Ads

With ABM and ads you’re predominantly a list of ‘target accounts’ or companies you know will most likely buy based on your research. Targeted advertising as an effective way to get your message in front of the right people inside these companies. A perfect example of this is company targeting on LinkedIn—you can create a campaign on LinkedIn to target employees at a specific company.

Outside of walled gardens of paid social—tools like Terminus, Listenloop, and DemandBase leverage IP and cookie based matches to deliver ads to the right accounts. You can also use Google Display and DSPs to create custom audiences & geofence ads around company locations without shelling out $5K/mo for something like a Terminus.

Remember ads don’t just mean online—if you’re targeting a large account, you can buy physical billboards in their office vicinity, do print ads or buy sponsored slots on podcasts for example, that is heavily consumed by the audience.

Most notably a tool like Listenloop will plug into Salesforce and sync with account lists and share relevant data such as ad metrics such as impressions and clicks.

Account List and Data Enrichment

This is important for multiple reasons— but imagine that you’re trying to sell to the VP Operations at a big pharma company but have no idea what their name is.

Second, you’ll want to know everything you can about big pharma company HQ, their revenue, and other relevant information.

Third, if you want to do prospecting right, you’ll want to have to have their direct contact info enrichment data to customize your approach. You can also use enrichment data to personalize web experience, shorten forms, build better custom audiences and so on.

Direct Mail

Finally, direct mail plays an important part in ABM but is often underutilized.

Because most of our lives are online, a nice letter or a gift in the mail can really get someone’s attention. There’s multiple ways to approach direct mail—depending on the strategy and investment— you can send cupcakes & cookies (always a crowd pleaser) or do research on what your prospect likes, where they went to school, what their hobbies are and create a very customized package.

There’s vendors like PFL, Sendoso, and Alyce that automate this process & will integrate with Salesforce, that with a ship of a button they will source, ship and deliver a package to your prospect. With a Salesforce integration they can alert reps when packages are delivered & you can do things like add to campaigns or add activity to calculate the incremental lift in pipeline from direct mail. A massive opportunity for many.

Conclusion

While account-based-marketing is not for every type of business, it can be an incredibly lucrative strategy when done right.

You don’t have to invest tens of thousands of dollars to see a strong return on your investment.

  1. Consider whether account-based-marketing is actually a viable strategy for your business.
  2. Ensure your tech stack works well with your outbound marketing strategy based on your budget and goals.
  3. When moving forward with an account based strategy, take time to consider the impact of account reverse IP lookup, ads, account list and data enrichment, and even direct mail.

Author’s note: Special thanks to Erin Stripe, a Toronto-based freelance content marketer and proud generalist for help with the post.


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