What Is Account-Based Marketing: The Definitive Guide
Account-based marketing (ABM) is increasingly becoming the go-to marketing strategy for B2B marketing teams. But why? Because it works. According to a Momentum ITSMA and ABM Leadership Alliance study, B2B companies with an ABM go-to-market strategy saw an 81% increase in ROI compared to traditional marketing initiatives.*
But precisely what is account-based marketing?
In this article, I’ll answer that question, highlight the elements of a winning ABM framework, and explain how to develop an ABM strategy that significantly improves your key metrics.
What Is Account-Based Marketing?
Account-based marketing (ABM) is a go-to marketing strategy that empowers sales and marketing to create personalized buying experiences for select high-value accounts through a unified approach.
Marketers across the B2B industry tend to define ABM based on their in-house iterations.
Whereas Katrine Rasmussen, CMO at Pixelz sees ABM as "trying to understand one prospect and see how we can work with their pain points, what we can do to get in front of them and get in touch with them. We use HubSpot and other tools we already have. We don’t have any very expensive ABM platform.”
8 Benefits of Account-Based Marketing
ABM’s growing popularity among sales and marketing leaders in recent years is a good indication of its impact on B2B companies' marketing efforts. If you’re yet to jump on this train, let’s look at some of its benefits to get an idea of what you may be missing.
1. Keeps Marketing and Sales Aligned
As a go-to marketing strategy, ABM requires sales and marketing to work together under the same umbrella, singing the same song—the song of accounts.
When sales and marketing are in complete lockstep, processes become more efficient, yielding better results. HubSpot’s State of Sales report found improved customer experience and increased revenue to be the biggest benefits of sales and marketing alignment.
2. Accelerates the Sales Cycle
With buying committees involving more and more decision-makers, the sales cycle has gotten increasingly complicated. ABM helps you overcome the complex nature of buying committees.
“In an average deal cycle of 50k, there can be as many as fifteen different people,” says Carl Koussan-Price, Global Vice President, Pipeline & Growth at Freshworks. He continues, “We now focus on a smaller number of accounts and going wider in those accounts and doing so in alignment with marketing, business development and sales. This is where we start to see a lot of success.”
3. Improves Account Personalization
According to a report by McKinsey, 71% of consumers expect personalization, and 76% get frustrated when they don’t. The evolution of B2B marketing means personalization is now front and centre of most marketing and lead generation campaigns.
With ABM, you can personalize your campaigns in various ways, from ABM landing pages and email newsletters to ad targeting and direct mail-outs.
Unlike traditional marketing, ABM involves creating highly targeted campaigns for specific prospects. In other words, all communication and activity are tailored to the specific needs and interests of individual customers.
As a result, you can create a more personalized experience for your prospects, which means they’re more likely to purchase and spend more money. It’s a win-win and a big reason why most marketers chose ABM over demand generation.
4. Improves ROI and Conversions
When done well, ABM boosts conversions and ROI. Think about it. ABM relies on data-driven intelligence to identify the most promising accounts. This allows you to tailor your messaging and approach to their specific needs and preferences.
5. Reduces Time and Resources
With traditional marketing, companies target based on demographic data, which means you end up targeting a broad section of the market. This approach can stretch resources thin.
ABM takes a more focused approach, targeting specific accounts and companies rather than individuals. This allows marketing and sales teams to better use resources by focusing their efforts on accounts considered a good fit for the business.
6. Builds Customer Trust
ABM programs give companies insights into current and prospective customers’ pain points. This knowledge helps them build trust. For example, Pixelz, a photo editing service for e-commerce companies, uses its knowledge of clients’ pain points to act as consultants.
“We find ourselves talking to clients about lighting, studio setups, studio designs,” says Katrine Rasmussen, CMO at Pixelz. “All of these things are not really what we do, but it’s what our clients do. So they need a trusted advisor, and it’s a big part of building trust with existing clients and prospects.”
7. Creates Consistent Buyer Journeys
Both ABM and traditional marketing funnels start from awareness to sale/post-sale. But where they differ is who gets centered.
ABM maps out the buyer’s journey, associating each persona with different stages of the funnel, focusing on the buyer’s experience and decision-making process. This allows you to create a consistent buyer journey and experience, moving prospects through the funnel with the right engagement.
8. Increases Content Relevance
ABM revolves around customizing your approach for your target account throughout their buying journey. This involves creating content based on their needs and where they are in the sales funnel, ensuring that the right customers find the right content at the right time and place.
The Three Types of ABM
Not all ABM programs are created equal. Your ABM approach will depend on the number of accounts you’re targeting and your goals.
Here are the three types of account-based marketing to consider:
- Strategic ABM (one-to-one)
- ABM lite (one-to-few)
- Programmatic ABM (one-to-many)
Let’s look at each approach in more detail.
1. Strategic Account-Based Marketing
Strategic ABM is what I’ve been describing so far. It’s the most detailed and personalized version of ABM and involves targeting a limited number of high-value accounts (often no more than ten at a single time).
You’ll create a marketing plan for each prospect, tailoring your marketing activity (especially your content marketing strategy) to their specific needs, interests, and preferences. The goal is to establish long-term relationships, encouraging them to make a purchase and see you as a partner.
Because of the hyper-targeted approach, strategic ABM is typically used by companies with the time and money to invest in these relationships. Often, these companies also put effort into ABX.
Northrop Grumman, an aerospace and defence contractor, wanted to win the Virginia Information Technologies Agency (VITA) contract through its IT arm. It networked with key players to better understand VITA’s issues and goals before starting a campaign to position the company as a technology expert and grassroots player. It took them three years, but they won the contract.
However, for companies short on time and finances, strategic ABM may not be the best option—but there are other options available, which leads us nicely to ABM lite.
2. Account-Based Marketing Lite
ABM lite is a simplified and scaled-down version of strategic ABM, making it ideal if you don’t have the time to invest in a one-to-one approach. It targets a slightly broader group of key accounts (usually between 10 and 500) but still focuses on creating customized marketing campaigns.
Instead of customizing campaigns based on the needs of each prospect, ABM lite personalizes activity based on attributes that apply to multiple prospects.
A good example is BillingTree, a payment processing platform. BillingTree’s ABM efforts were designed to grab the attention of the people they needed to grow their business within a hundred select target accounts. Their ABM effort yielded a 60 per cent response rate, 15 per cent conversion rate, $350K in opportunities closed, and 700 person ROI. What’s more? They saw a significant decrease in resources spent than their previous efforts.
Basically, ABM lite a little more generic than strategic ABM, but it still personalizes the customer experience.
3. Programmatic Account-Based Marketing
Programmatic ABM is known as the one-to-many approach. It uses data and technology to target a larger group of accounts (often in the thousands).
To target these accounts, you’ll use CRM or marketing automation software to segment prospects with similar characteristics. These characteristics could be:
- Industry
- Demographics
- Areas of expertise
- Company size
Programmatic ABM is the most scalable and automated form of account-based marketing. It uses personalization but doesn’t require as much time and financial investment as other types of ABM. For this reason, it’s a useful tactic for smaller companies with a limited budget.
For Snowflakes, a data cloud provider, conversational and intent data were used to build a target list of over two thousand accounts. Then, they scaled their one-to-one approach to target such a huge number of accounts. They saw a 75 per cent increase in SDR-booked meetings and a 3X increase in meeting rate for their efforts.
Overall, you don’t have to stick to one approach, though. Of these three approaches, at least 55% of those using an ABM strategy use two or more.
What are the Elements of a Winning ABM Framework?
Certain elements make up an ABM framework, all crucial to the success of any ABM program. Let’s explore each element below in detail.
1. Sales and Marketing Alignment
This element aligns your sales and marketing teams, ensuring they are on the same page and everyone understands their roles with the playbook. This alignment allows for:
- Both teams to decide how to move prospects along in the funnel.
- Both teams to agree on relevant terminologies to avoid confusion.
- Both teams to agree on the right metrics based on their shared goals.
- Both teams to agree on a central data repository and channel of communication.
- Both teams to chip in on the content development process with unique insights.
All of this works only if the leadership team also buys into the ABM framework. This ensures alignment all the way to the top of the organization, allowing everyone to pull in the same direction.
2. Qualification and Selection of the Right Accounts
The whole idea of ABM is built around targeting the best-fit accounts for your business, which makes this element a make or break for the success of your ABM program. This is because qualification and selecting the right target accounts help you:
- Go after accounts that need your solution the most.
- Focus your resources.
- Close bigger deals—and faster.
- Boost your chances of getting returns for your investment.
Selecting the right account begins with building your ideal customer profile (ICP). This gives you a clear picture of which organizations to target and which to avoid.
3. Your Go-To-Market Approach
This is the part where you decide how to approach the market based on your goals, resources, and number of target accounts. You also want to visualize the end-to-end movement of a prospect through the sales funnel to determine any friction points and find a solution. Deciding on a go-to-market approach helps:
- Create organizational alignment.
- Discover and plug gaps.
- Reach your target audience effectively.
- Create effective positioning and value propositions.
- Manage budget and save costs.
Getting this step right also requires strong collaboration between marketing and sales.
4. Measurement and Optimization
This component is about measuring and analyzing your tactics to enable you to quantify and judge performance. This helps you:
- Demonstrate the value of your marketing efforts.
- Understand customer behaviors.
- Identify successful tactics and refine them where necessary, ensuring you remain effective over time.
The success of this depends on consistent and reliable data collection and the use of standardized methods across touch points. Creating reports out of your data will help you pinpoint areas of improvement.
How to Develop an Account-Based Marketing Strategy in 10 Steps
First, you start by building out an ABM playbook.
1. Use an ABM Playbook
ABM is a process that requires collective effort across teams. An ABM playbook is a document that houses details of your tactics, what to do every step of the way, and who’s responsible for each part. Using a playbook enables:
- The team to rollout the ABM program with minimal hitches
- More efficient cross-functional collaboration
- Scalability and speed - When the process is clear, it can be reproduced easier and faster.
Keep the document as simple as possible for easier referencing. Start small, experiment, and then iterate.
2. Align Across the Organization on Your ABM Approach
Aligning sales and marketing fosters collaboration between the two teams, allowing them to work from a shared playbook with clearly defined roles and responsibilities. But how can marketers achieve alignment with sales?
So, to create that alignment, May suggests knowing what makes sales tick and what drives results for them and being able to cater to that.
“There’s usually a slight misalignment in terms of timeline between sales and marketing because sales timelines are much shorter,” May explains. "You need to be able to build that pipeline for them, and that’s where we can partner very closely, and that is how ABM can be a real success.”
3. Build an ABM Team
The success of your ABM program depends on the structure and expertise of those who run it. Building an ABM team with a clear structure is vital because:
- A capable team brings better coordination to your marketing efforts, increasing the chances of success.
- A capable team makes resource allocation more efficient.
- A clear structure makes collaboration among team members easier and strategy integration seamless.
- A capable team makes anticipating and adapting to changing customer and market needs more proactive.
But how do you build a capable team, and what functions do you include in the team structure?
- Your ABM team should include at least these five functions: ABM management, sales development, social content, intent and research, design and creative, and B2B copywriting.
- But before jumping into hiring, understand the goals you want to achieve with your ABM team.
- Identify the current skill gaps and fill them based on your goals.
Beyond hiring, you must also create an enabling environment to give your team the best chance of succeeding.
4. Research and Identify Your Ideal Customer Profile
This is the first step in developing an ABM strategy. It involves a detailed description of the companies that would benefit most from your solutions. Identifying your ICP is crucial because, without it, you do not know who your ideal accounts are. This knowledge is vital in ABM, where targeting specific accounts is a core determinant of success.
But how do you build your ICP? Here’s how:
- Start by identifying your target market. Dig into your demographic and firmographic data to determine industry, location, company size, etc.
- Carry out in-depth research to understand their pain points, buying process, and who the decision-makers are.
- Build a persona off of the information collected in your research.
- Map out the steps a prospect will take in the buying journey. This will help you determine areas of friction or objection.
- Use your ICP in your marketing campaigns.
Remember that ICPs are not set in stone. They can be further refined. As you build your target list, you can determine hot accounts and when to engage them through lead scoring and buying signals.
5. Identify and Select Ideal Target Accounts
Account qualification and selection is usually the first step in planning an ABM campaign. Selecting the wrong accounts can derail your subsequent marketing initiatives downstream. So, how do you ensure that you get it right?
- Engage with marketing, sales, customer success, and other relevant stakeholders to define an ideal customer profile (ICP). But the marketing team takes the lead here.
- Identify the companies within your ICP. Vladimir Blagojevic, co-founder of Fullfunnel.io, suggests further segmenting these companies mainly by use cases and deal velocity. Use cases make it easier to personalize when it’s time to engage these companies.
- Andrei Zinkevich, who’s also a co-founder of Fullfunnel.io, suggests prioritizing these companies based on these four criteria:
- When you structure your big list based on the four criteria, you end up with a three-tiered list: Cluster ICP, Future Pipeline, and Active Focus. “Cluster ICP is a product list of accounts unaware of you. These are the accounts you need to make aware of your product,” says Andrei. The active focus list includes companies most likely to become opportunities presently and those you need to prioritize.
- The next step is to determine how you want to pursue these companies using the three-tiered approach to ABM. Your first tiers get the market-of-one treatment, with many one-to-one treatments. The other tiers can get the one-to-few or one-to-many treatment, allowing you to broaden your attention.
6. Rank Prospects and Build Out Your Buying Committee within Target Accounts
This is also referred to as stakeholder mapping. It involves identifying members of the buying committees, key influencers, champions, blockers, and users within the buying team, mapping out their preferences and level of influence. Stakeholder mapping helps you:
- Understand stakeholder roles and responsibilities.
- Anticipate and proactively address needs and possible objections.
- Determine the level and strength of influence between stakeholders.
- Develop an effective outreach and engagement strategy.
You may not have all the information needed for your mapping at once. In that case, you can use placeholders to pinpoint where more information is required. You can phase out those placeholders as you learn more and populate your map with more information.
7. Build and Finalize ABM Campaign Elements and Plans
Now that you know your target accounts and all the stakeholders, you can create a customized marketing plan for each account. This involves outlining all your messaging, content, and channels based on each prospect's specific needs. You’ll also define your measures for success so you can review progress and track results.
Finalizing your campaign plan and elements is crucial to the success of your ABM campaign. It allows you to plug potential gaps and ensures coordinated efforts as you roll out your campaign.
8. Execute Content Campaigns Targeted at Identified Contacts and Accounts
At this stage, you’re ready to implement your marketing plan and start communicating with your high-value prospects. Exactly how you do this will depend on the account-based marketing tactics in your plan, and the process might look different for every account.
You might send a personalized email to one of your prospects, reach out to them directly on the phone, or syndicate content across channels they frequent. Ultimately, you’ll decide which communication methods are right for each high-value account.
9. Build Strong Relationships with Target Account’s Buying Committee
After engaging your target accounts, your team needs to focus on building a solid relationship with buying committee members, not outright selling. This gives you a better chance of closing deals.
But how do we build such a relationship? Here’s how:
- Take a consultative approach to engagement. Make every interaction meaningful and geared towards building mutual trust. Customize engagement for each stakeholder based on their role and interest.
- Involve senior executives from your company. This signals your seriousness about a partnership with the buying committee.
- Broaden your coverage by engaging different members of the buying committee simultaneously.
- Build confidence in your solution by offering trial programs to test your product.
- Unify your messaging and communication to foster transparency and communication.
Generally, B2B deals take longer, and you need to be patient. Never employ tactics that induce artificial urgency. This makes you appear pushy and amateurish.
10. Measure, Analyze, and Optimize Your ABM Results as Needed
Next, you’ll measure the effectiveness of your ABM activities. You set your metrics during the planning stage (which often includes engagement, pipeline acceleration, and revenue growth). To effectively track and analyze, ensure that:
- The metrics you choose are the ones that matter.
- Marketing and sales are aligned on those metrics to avoid any confusion.
- You have industry or historical benchmarks to which to compare your campaign performances.
- Choose your measuring tools based on the objectives and goals of the campaign.
- You test your tracking and measuring tools to ensure they’re correctly set up to collect insights.
The insights you gain through your analysis will help you iterate for subsequent campaigns. A/B test to identify the most effective elements of your campaign. Direct customer feedback and funnel analysis can also help you identify the bottlenecks in your processes.
Challenges of Implementing an Account-Based Marketing Strategy (And How to Solve Them)
Implementing ABM can be challenging, whether starting from scratch or pivoting. Let’s review some of these challenges and how you can avoid them.
1. Lack of Sales and Marketing Alignment
In many organizations, the sales team is usually in charge of outbound demand generation, while the marketing team focuses on inbound marketing. Both teams carry out their activities in silos and have different KPIs in settings like that. This leaves them too unaligned to drive an ABM program successfully.
“The prerequisite of successful full-funnel B2B marketing is having your ABM teams working together on the same goals,” explains Andrei.
He continues, “It all starts with setting the same goals and objectives for teams. The key metric you should align both teams around is revenue. The next thing is to have a shared playbook. This playbook needs to have clear timelines, data cadences, and who’s in charge of what.”
The campaign or playbook you're using will determine the leading indicators of alignment. Marketing and sales must conduct regular pipeline reviews, share insights, and close gaps where necessary.
2. Lack of Common KPIs for Measuring Results
Optimizing your ABM efforts requires consistently tracking performance and knowing the KPIs most important to your campaign goals and business objectives. However, things can get murky when sales and marketing lack unified KPIs for measuring results.
As such, marketing and sales need to agree on metrics to measure success at the end of the campaign. Ensure that those metrics revolve around overall revenue and business growth and reflect the marketing and sales aspects of the campaign.
3. Lack of Leadership Buy-In
One of the biggest hurdles to overcome when trying to implement ABM is the pushback that tends to come from the executive level. For organizations with a traditional marketing approach, the leadership can see the implementation of ABM as too much of an upheaval.
To have a higher chance of success with ABM, you need everyone pulling in the same direction, particularly the leadership. But how do you do that?
Ken Roden, Senior Director, Global Marketing at CrossKnowledge, outlines how he got buy-in for ABM as a Head of Marketing:
- Start with sharing content with insights about the shift in buying behaviors with executives in the team’s communication channel. This allows you to build some interest and momentum.
- Identify change agents within the leadership team. Change agents have shown signs of leaning towards change based on the knowledge you shared. These are the people that can help you champion change.
- Utilize an ABM pilot program to sway those in the leadership group who are still unconvinced. This helps broaden acceptance not just among the leadership but also among any other skeptics within the organization.
Ken suggests you treat getting buy-in as a buyer’s journey, but internally. Start with making leadership aware of vital points about ABM and proceed from there.
4. Little or No Campaign Personalization
ABM revolves around personalization. However, implementing ABM personalization can be overwhelming. You need to personalize your landing pages, email sequences, CTAs, and more.
But without sufficient personalization, you fail to demonstrate that you understand your prospects' needs and run the risk of losing the deal. Here are some tips to get you started and also prevent a drop-off:
- Start with baby steps. Experiment and learn from your wins and failures.
- Ensure you have a unified view of your customer data.
- Ensure efficient communication between sales and marketing, enabling them to share insights consistently.
Your tech stack is also a crucial component of your personalization journey. Ensure your tech stack possesses cross-channel personalization capabilities.
5. Executing ABM Campaigns that's Not Focused on the Customer
ABM campaigns are all about the prospects. As Robert Hollier mentioned earlier, it's all about:
"Who are we targeting? Why are we targeting this client? Why might they engage with us? Why might they buy from us?"
However, either due to misalignment between sales and marketing or due to lack of leadership buy-in, you can sometimes have company-centric campaigns.
To ensure your execute a customer-focused campaign, ensure you:
- Understand the needs and preferences of potential buyers by collecting and analyzing relevant data.
- Customize the campaign's value proposition around those needs and preferences.
This approach allows you to gain trust and build long-term relationships, driving loyalty and increased customer lifetime value.
6. Not Using the Right ABM Tools
Using the wrong tools can severely undermine your ABM efforts. This mistake usually arises from putting technology before strategy when it should be the other way around. To prevent such a mistake, you need to:
- Have your strategic goals inform your tech stack.
- Ensure that the tools’ capabilities align with those goals.
- Have conversations with the right stakeholders before deciding on any tool.
Importantly, understand that you don’t need a super complex tech stack to start an ABM program. Start small, and your tech stack will expand as your needs and experience grow.
How to Choose the Best Account-Based Marketing Software
The abundance of ABM software in the market can make choosing the right one for your program difficult.
Amber Bogie, Director of Global Demand Generation at Reachdesk, recommends keeping it simple:
"One thing I’d say to any new ABMers is that there’s no one tool that does it all. You can be talked into buying many new software tools—there are hundreds out there—but you need to be clear on your priorities. This is the only way to decide which tools you need. Some I’d recommend off the bat, and others I’d say to wait until you have a little more ABM experience and maturity."
Knowing your goals and priorities, you can consider capabilities, integration, and budget before proceeding.
How to Measure the ROI of Account-Based Marketing
Measuring ROI is a sure way to evaluate your ABM campaign's effectiveness; various metrics allow you to do this. Let’s go through some of those metrics:
- Deal Size: This refers to the amount you make for every deal you close. It’s essential to measure this because it helps you evaluate the effectiveness of your revenue team. It also shows you what price point companies convert at.
- Sales Cycle Length: This is the time from your first contact to when you close the deal. Knowing your average sales cycle length allows you to make sales projections based on the prospects in your pipeline.
- Win Rate: This metric allows you to compare the number of successfully closed deals against your total number of opportunities. Knowing your win rate will enable you to identify gaps in performance and set financial goals.
- Pipeline Velocity: This measures the speed of your sales pipeline. It tells you how quickly you’re selling your product. Tracking this allows you to identify points of friction and proactively remove them.
- Client Lifetime Value: CLV measures your client’s financial worth to your company throughout the business relationship. It helps you identify high-value clients.
- Website Visitors: This tells you the number of people who visit your website. It gives you an idea of which content is working and also allows you to identify potential high-value prospects.
- Content Engagement: This tracks how users consume and interact with your content. It also helps you determine which content is performing well.
- Email Open and Click-Through Rates: The open and click-through rate tells you the number of people who opened your email and clicked your CTA. This information helps you determine the effectiveness of your subject lines and CTAs.
- Social Media Engagement: This measures the level of interaction between your content and your audience.
Does Account-Based Marketing Integrate With Other Marketing Strategies?
ABM is compatible with other marketing strategies, such as demand generation and inbound marketing. You can combine ABM with inbound marketing to target prospects.
Where ABM focuses on specific accounts, you can go broader with the inbound methodology. Identifying pain points, key topics, interests, and trends within your industry enables you to create content that appeals to a wider audience while also being able to tailor them for specific accounts. This allows ABM to be part of your overall marketing mix.
Vladimir breaks down a framework they use to mix ABM with demand generation here:
Lumen, a global communications services provider, combines ABM and traditional demand generation. “At Lumen, we are heavily invested in ABM,” says Annie Chamberlin, Account-Based Marketing & Experiences at Lumen. “Specifically, in the large enterprise segment. Everything that we are doing is account-based: We have our target lists, and then we work to capture demand within those specific accounts."
She continues, "There are aspects of the business that do have more traditional demand generation, which are the areas that have a higher volume of customers but lower annual contract values. And in those areas, we look to generate leads and pass those leads off to sales development reps, who will then work on conversion.”
Time to Deploy Account-Based Marketing and Close Bigger Deals
What makes ABM so effective is the ability to weed out unqualified prospects, allowing you to focus on buyers best positioned to need your product. Just to recap, this alone has several positive implications, such as:
- Personalizes engagement.
- Speeds up the sales process.
- Improves resource management.
- Builds and nurtures relationships with customers.
- Aligns revenue teams.
- Increase ROI.
Account-Based Marketing Frequently Asked Questions
What is an example of ABM?
Check out these eleven ABM examples from top companies.
What’s the difference between inbound marketing and account-based marketing?
ABM focuses on specific high-value accounts, while inbound marketing uses optimized content to target prospects on a broader scale.
How is account-based marketing different from outbound sales?
Outbound sales involve reaching out to prospects through channels such as direct mail, phone calls, or emails, while ABM is customer-centric and uses relevant touchpoints to build relationships before selling.
What’s the difference between account-based marketing and performance marketing?
Performance marketing, as the name implies, takes a result-driven approach, where advertisers only part with their money when a specifically defined outcome is wholly met. While ABM focuses on personalized engagement with no certainty the deal will go through.
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References
*Momentum ITSMA and ABM Leadership Alliance's 2023 Global State of Account-Based Marketing Study.
