Why Account-Based Marketing Beats Traditional B2B Marketing
It might sometimes feel like the amount of acronyms we are faced with on a daily basis is ever-increasing. From SaaS to SWOT, or from B2B to B2B2C (what?). As a professional working in a B2B context, you might lay awake at night trying to remember the last letter of an acronym that flashed before your eyes on Linkedin that day. So in case, you didn’t know it already, I present to you: ABM, which stands for Account-Based Marketing.
Account-based marketing is an approach to marketing which involves aligning resources towards specific sets of target accounts. In other words, it is a targeted approach to marketing which focuses on a company instead of on an individual buyer.
In metaphorical terms, traditional marketing can be seen as fishing by casting a wide net, whereas account-based marketing could be described as fishing with a harpoon (although they are both for the environment, so take this metaphor lightly). The ABM approach is becoming implemented more and more in B2B business contexts, but as a marketing professional deciding whether to ingrain it into their strategy, it can be sometimes difficult to analyse it objectively.
This article will succinctly and concretely explore various metrics and points of differentiation to show how account-based marketing is indeed better than traditional B2B marketing. This comparison will be undertaken within four main areas: customer centricity, marketing/sales alignment, revenue and return of investment.
Return on Investment (ROI)
The marketing department is often seen as the centre for cost decisions within a company. As a consequence, figures such as customer acquisition cost, cost per lead and return on investment are crucial for marketers to observe. Studies have shown that account-based marketing is the top marketing channel in terms of generating positive ROI. Research by ITSMA found that 87% of marketers measuring ROI mentioned ABM as their number one marketing investment.
This is likely due to the fact that focusing marketing spend on specific accounts ensures that one spends less overall but that the money spent is targeted more effectively and efficiently towards the right decision makers.
Marketing and Sales Alignment
Account-based marketing has been found to help facilitate and in turn depend on marketing and sales alignment. As marketers focus on accounts instead of individual leads, they find themselves aligning their processes and terminology with the sales department. Marketers need the input of the sales team to understand which accounts to identify, develop personas and to measure and optimise.
Marketing and sales alignment brings significant benefits to a company’s business success. In more statistical terms, Forrester Research found that organisations aligning their sales and marketing teams observed an average of 32% annual growth. While less aligned companies saw a 7% decline in growth. Marketo found that aligned sales and marketing teams are 67% more likely to turn a lead into a client and that customer retention increases by 36%.
Account mapping involves defining the relationships and key decision makers within a company when trying to make a sale. This “committee” of sorts is sometimes called the “decision-making unit”. This unit is comprised of the key influencers, users, gatekeepers, blockers (also known as Dr.No’s), champions and buyers that are relevant as a deal progresses. Therefore, an account map contains information that is deeper than what is traditionally inputted into a CRM. Mapping an account includes deep insights about the decision-making progress within a company and what type of referrals and sponsorships are better than others.
As account-based marketing focuses on individual accounts rather than single buyers, account mapping is essential to be able to successfully approach and target these leads. Account mapping has been shown to improve various sales processes within an organisation, making account transitions and deal tracking much more seamless.
Account-based marketing involves targeting marketing content that appeals more closely to a particular market or industry. This entails that the campaigns have a much higher touch of personalisation versus traditional marketing. We have already talked about how the longevity of a client deal is significantly dependent on the buying experience. Namely, the Challenger approach to sales found that in 53% of cases the buying experience is the key driver behind customer loyalty. Furthermore, as the increasing focus of being-customer driven continues, account-based marketing aligns directly with centring on the customer.
As aforementioned, account-based marketing showed clear increases in terms of return of investment. As we are very aware, the company-wide goal of marketing departments is to increase revenue as much as possible. There are various reports showing that account-based marketing leads to strong increases in revenue. Demandbase found that 60% of companies that implemented account-based marketing saw a revenue increase of minimum 10% within the first year, with 20% of companies experiencing an increase of 30% or more in revenue. ABM Leadership Alliance found that B2B marketers using ABM saw an improvement in average annual contract value of 171%.
Simultaneously, SiriusDecisions research states that 91% of companies using ABM increased their deal size with 25% of these respondents stating that the increase was over 50%. I’m not great with numbers and even I know these are numbers you want to see on a boring slide deck on Monday morning from a BCG alumni.
In general, these different factors point towards account-based marketing being (at the very least) a strategy to consider for most B2B companies. Whether it is added into part of the marketing playbook or it becomes the primary methodology, account-based marketing will decidedly improve your sales and marketing results.