Should Account-Based Marketing be a Part of Your Broader Marketing Strategy?
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1 Should Account-Based Marketing be a Part of Your Broader Marketing Strategy? A guide for B2B enterprises
2 CURRENT B2B DEMAND GENERATION IS WASTEFUL 96% of B2B marketers feel their digital marketing efforts are wasted on accounts outside their intended target. Source: B2B Marketers Frustrated with Ad Waste in their Marketing Campaigns. Demandbase, Inc. March 1, Let s face it B2B marketing has always been a bit wasteful. As much as you try to target your marketing dollars, you are still pushing ineffective content, pursuing impossible leads, and attracting unwanted fish instead of the big whales. Take a moment to think about your marketing budget from the last fiscal year. What portion of that budget directly impacted your target accounts? It is likely that the majority of your marketing dollars fail to impact the accounts that matter most to your business. If this is the case, you are not alone. Recently, 96% of B2B marketers acknowledged their digital marketing efforts are wasted on a significant number of accounts outside their intended audience. i Furthermore, B2B marketers report an end-to-end pipeline conversion rate of less than 1%. ii This is a clear indication that B2B marketers are missing targets more than hitting them. Today s business environment asks B2B marketers to create more impact with less budget. Your teams cannot afford to waste budget on inefficient processes and a spray and pray approach. Account-based marketing is the hyper-efficient way to invest your marketing budget. 2 Account-based marketing (ABM) flips the funnel as we know it. Instead of attracting a large volume of prospects to the top of the funnel in hopes that a few make it to the bottom and become customers, ABM finds the customers first and markets only to those specific accounts. This laser focus allows for you to direct your marketing dollars at the leads and accounts that matter the most.
3 B2B DECISION MAKERS An average of 6.8 people contribute to today s B2B purchasing decision, up from 5.4 in Source: The New Sales Imperative. Harvard Business Review. March-April Why you should care. The fundamental concepts of ABM have been around for years (some of you might remember key account marketing), but recent changes to the B2B landscape are accelerating the impact of an account-based strategy. Your buyers don t buy the same way they used to. An average of 6.8 people contribute to today s B2B decision-making, up from 5.4 in iii These 6.8 people all have different time constraints, incentives, pain points, and decision criteria. ABM s 1:1 lens creates meaningful interactions with each member of the buying committee, which increases overall influence and accelerates deal cycles. The returns on inbound are flattening out. Content marketing fatigue is a reality, and with web content doubling every two years, it will only get worse. iv An exponentially increasing supply of content, coupled with a fixed amount of time in the day, means that breaking through the noise and getting your prospect s attention will be harder and harder. Meanwhile, the ROI on ABM is increasing as a result of emerging capabilities and technologies. Recent advances in technology, data, and analytics especially in the areas of account intelligence, web personalization, and digital advertising give ABM a platform by which to scale, driving down costs and increasing ROI. 3
4 EXECUTIVES ARE SHIFTING BUDGET TOWARD ABM, IN THE RIGHT SCENARIOS Savvy marketers realize ABM is not a one-size-fits-all approach. Companies are increasingly investing more of their marketing and sales budgets in ABM, but savvy marketers recognize that it s not a one-size-fits-all approach. Where ABM makes sense. Effective account-based marketing requires some investment. In order to truly realize the ROI of ABM, you need a common denominator to build scale. 4 Large key accounts. If you have sizeable accounts that are responsible for a significant portion of your overall revenue, then an accountbased approach can accelerate growth with deeper engagement across the buying centers. Similar pain points. If your accounts have similar pain points or operate in the same industry, personalizing at this use-case level allows for more efficient marketing because the variations between individual accounts will be smaller. Complex service solutions. Companies that sell complex services typically have longer sales cycles and larger decisionmaking teams, and a well-executed ABM strategy can significantly reduce time-toclose while building relationships with every member of the buying center.
5 When shifting budgets, we focused dollars on targeted account plays vs. more broad-based and general awareness plays. Rishi Dave CMO, Dun & Bradstreet How executives are streamlining budgets. ITSMA reported 17% of the average marketing budget will be allocated to ABM in v As CMOs continue to shift budget to ABM programs, knowing where to shift from becomes the greater challenge. Reorient digital marketing investment. A majority of the budget shift toward an ABM approach is simply about refocusing what you re currently doing to be relevant and targeted to a specific set of accounts. Reallocate budgets for broad advertising, search, and content marketing toward new capabilities that allow you to market to specific accounts. Reduce brand spend. Allocating budget for general brand awareness is less valuable than strategies that actively target future customers. Instead, think about carving off some of this investment for awareness activities specific to your target accounts. What s old is new. High-touch tactics are foundational to an ABM approach. Old School tactics such as account events and direct mail (yes, you read that right) are back on the menu and starting to displace broad-based marketing. 5
6 THE ROI IS SIGNIFICANT, AND SO IS THE CHALLENGE 4 OUT OF 5 B2B MARKETERS state that ABM has a higher ROI than any other marketing initiative Lenati: ABM Research Survey Although the ROI may make sense from a financial perspective, when done right, ABM requires a significant shift in your go-tomarket approach. The ROI gains from ABM are clear. Research by Lenati found that 4 out of 5 B2B marketers reported higher ROI with an account-based marketing approach. And a Demand Metric study reported that one year after implementing ABM, 60% of users saw an increase in revenue of at least 10%; 19% reported an increase 30% or greater. vi How would you describe the ROI of account-based marketing compared to other marketing initiatives? Higher 81% About the Same Lower 10% 3% Unsure 6% Total: 188 Participants (B2B Marketers Using ABM) Source: 2017 ROI of ABM Lenati Research Survey. Survey data collected from 03/31/17-04/17/17. All 188 participants were screened as B2B marketers who are or have used account-based marketing. The caveat ABM requires you to think differently about how you measure. When measuring the ROI for ABM, you have to think beyond funnel metrics. Account-based marketing is largely about building relationships with key accounts; therefore, the best measures of success relate to account performance. It s about engagement and influence. Leading indicators for propensity to buy include metrics that capture the strength of the account relationship, such as 1) the number of meetings with the right contacts, or 2) the amount of time target accounts spend engaging with the brand. 6 It s not the number of leads sourced, it s revenue closed. Marketing qualified leads are still important when gauging the effectiveness of your overall B2B marketing and sales funnel. However, to capture the true ROI of an ABM program, look at performance metrics such as win rates, deal velocity, contract value, and account growth.
7 Soft launches of ABM without input from Sales can become glorified sales enablement machines, while pilots with tight collaboration with Sales see greater impact. vii Source: The 3 Things That Matter in Account-Based Marketing: The Executive Perspective The challenge of launching ABM depends on your company s appetite for collaboration. Large B2B companies that have successfully launched an ABM strategy share three common characteristics: Active partnerships with sales leadership. An account-based marketing approach hinges on a seamless coordination between Marketing and Sales. Without a commitment from sales leadership to work together from day one, an ABM effort will fail. Willingness to organize business cadence around accounts. ABM s hyper-targeting requires teams to orient in much the same way. Marketing and sales teams must be motivated to think outside their functional areas and adjust to day-to-day collaboration around account-level initiatives. Agreement on what success looks like. It takes 2-3 quarters to begin seeing the ROI from an ABM approach, which is an adjustment for fast-paced marketing departments that track results on a monthly, even weekly, basis. Teams that are aligned on a 1) different approach for measuring success and 2) lengthier timeline for tracking have a better chance of successfully launching ABM. 7
8 START WITH A FOCUSED EFFORT AND DO IT RIGHT Invest time to size the opportunity and design a pilot. These are essential next steps that will provide the insights you need to plan an effective account-based marketing approach. Build the business case to get internal alignment. The best business case will outline the potential opportunity with the required investment to test the strategy. Key questions to answer here are: How well would an ABM approach fit the current business objectives? What is the estimated budget waste in your current marketing approach? What would be the potential pipeline/revenue growth if you reduced that waste and had a more personalized approach? What were the results when similar companies utilized this strategy? What is the effort/cost required for a small ABM pilot, taking into account out-of-pocket costs and internal resource constraints? 8
9 Plan for a focused pilot. ABM pilots are most successful when you can easily compare the results relative to other current marketing initiatives. To enable this, isolate a small group of high-value accounts and go all in with ABM: Build a sales/marketing ABM group to target the accounts Set individual account goals and strategy Outline clear measurements of success and track them Account-based marketing is gaining rapid adoption among B2B marketers as the strategy that delivers more ROI than other marketing initiatives. But is it right for your business? Recognize the scenarios in which ABM makes sense, acknowledge the sales/ marketing collaboration requirements, and pressure test the business case for your enterprise. You may find ABM is a more efficient and effective use of your marketing budget. Want to send this whitepaper to a colleague? Share Now > i B2B Marketers Frustrated with Ad Waste in their Marketing Campaigns. Demandbase, Inc. March 1, ii Wizdo, Lori. The New Physics of Lead-to-Revenue Management. Forrester Research, Inc. March 28, iii Toman, Nicholas, Brent Adamson, and Cristina Gomez. The New Sales Imperative. Harvard Business Review. 9 March-April iv Schaefer, Mark. Content Shock: Why content marketing is not a sustainable strategy. Mark Schaefer. January 6, v Schwartz, Julie Services Marketing Budget Allocations and Trends Study. ITSMA. February 16, vi Account-Based Marketing Adoption. Demand Metric Research Corporation. September vii Sullivan, Chris. The 3 Things That Matter in Account-Based Marketing: The Executive Perspective. Lenati, LLC. October 26, 2016.
10 CONNECT WITH LENATI Schedule a call with Lenati s ABM Strategists Subscribe to Lenati s Marketing and Sales Strategy Blog Comment and share this with your networks CONTACT US If you re interested in learning more about account-based marketing, please contact us or info@lenati.com. ABOUT LENATI Lenati is a marketing and sales strategy consultancy that helps companies acquire, grow, and retain customers. Our clients come to us to build market leadership, whether through radical innovation or intelligent evolution. info@lenati.com lenati.com
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