Reported below is a concise gist of the salient points, flow, discussion and presentation highlights etc (including the keynote by InsideView Global CEO Umberto) on account based marketing (ABM) at the Nasscom’s special interest group (SIG) on sales and Marketing’s Noida event in Feb 2017.
The ABM imperative:
At the risk of sounding cliched, the traditional ‘funnel model’ of lead conversion to sales is obsolete. There is now no more a linear progression from one stage in the purchase process to the next. Consider the numbers: 74% of buyers research work purchases online, and 53% of buyers find going online superior to interacting with a salesperson. What’s more, with the RFP (request for proposal) process becoming widespread and process-automated, quite often these days the sales team may find it hard to even meet or talk (on the phone, for instance) with a prospective customer!
Enter account based marketing (or ABM) – a mindset, an organizing principle and set of processes that flexibly leverages sales’ and marketing’s strengths in purchase process navigation and prospect conversion. Hence it is no surprise that ABM is finding rising interest across the enterprise sales and marketing space. The B2B Marketing Guide to ABM from Demandbase claims 74% adoption of and 81% higher ROI due to ABM in its survey sample. A google trends snapshot well depicts the percentage change in google searches for ABM from around the world.
What is ABM? Wikipedia defines it thus: ABM, also known as key account marketing in enterprise marketing, is a strategic approach to business marketing in which an organization considers and communicates with individual prospect or customer accounts as markets of one. The requirements are essentially two-fold: One, an in-depth (as opposed to a general-template based) analysis of each customer’s requirements, decision making processes, influencers and constraints *prior* to targeting the prospect with a sales, product or solution pitch. Two, continuous engagement with the customer over the lifetime of the relationship. Thus, it is now no longer about finding prospects and closing a sale but about growing the account with continuous engagement.
Implementing the above is easier said than done at least partly due to the way Sales and Marketing functions are structured in organizations today. Marketing focuses on lead-generation (more the merrier) and thereby, directly or indirectly on ‘filling the funnel’. Sales on the other hand, tries to screen, qualify and pursue leads within the constraints of access, bandwidth, budgets and timelines. Often, there crops up a misalignment in the incentives, processes and objectives of these two critical functions. Given the growing challenges in the wake of the weakening traditional funnel based sales conversion model, sales and marketing in organizations can today no longer afford to be less-than-perfectly aligned. Special mention at this stage of a book by Tracy Eiler and Andrea Austin titled Aligned to Achieve: How to Unite Your Sales and Marketing Teams into a Single Force for Growth, published by the Wiley group. http://as.wiley.com/WileyCDA/WileyTitle/productCd-1119291755.html
The nature of ABM:
ABM represents an evolution in demand generation, not a ‘revolution’ (i.e., complete break with past ways of working). The aim is to evolve to a state wherein ABM can enrich lead-generation with account-specific tactics. To see the differences between conventional lead generation and an ABM approach, consider the following dimensions. In terms of Marketing approach, conventional methods endeavor to generate interest and demand through tactical campaigns whereas ABM creates lifetime engagement. The former focuses on individuals as leads and hence may have target list sizes in the 100s or 1000s whereas ABM focuses on accounts and hence has dozes or 100s at most as targets. The former has a sales-led account planning for decision team sizes of 3-5 in a relatively simple buying process whereas ABM requires an aligned Marketing-sales effort for decision team sizes of 10+ for complex and highly considered buying processes. This brings into sharp focus the fact that ABM doesn’t fit every firm and every situation. Firms must first evaluate and consider whether they are ready for ABM (and, perhaps, vice-versa).
Readiness for ABM:
So what may be the conditions in which ABM is likely to get ROI? At least four conditions emerge. First, the concerned firm must have some experience with automating some marketing and sales processes. The sheer cognitive load of micro-targeting and campaign + outreach design at the account level almost requires this to be the case. Second, the concerned firm must pick the right ABM strategy for its needs. And not all ABM strategies work with equal efficacy. For instance, is the firm looking at a very small number of very large accounts versus a moderate number of existing customers that receive differentiated outreach? Are the accounts already well defined or would any number of new targets in a new market (e.g., a specific vertical) do? Third, the concerned firm must invest in building ideal customer profiles (ICPs) to enable a deeper understanding of who their best customers are. The ICP is crucial because it is the stepping stone to finding and targeting accounts. The ICP is some subset of a Total Addressable Market (TAM) that the concerned firm’s capabilities can pitch value to. All matching profiles in a TAM must be screened for ICP traits and thereafter the process of selecting and targeting the best matches can begin apace. Finally, the concerned firm must be willing to change both marketing and sales techniques as per ABM requirements. This is an organizational issue and is easier said than done.
Four steps to Implementing ABM:
First, Build a strong data foundation. Start by defining your ICP, determining your TAM, then build out your database. In a recent survey of firms, two-thirds of respondents cited lack of accurate, shared data on target as a major roadblock to implementing ABM. Customer accounts keep their teams in a state of friction. This brings to the fore the need to get one’s data into shape. This includes activities such as looking at gaps, recency, duplicate records and possible maps between records and accounts. At this stage the firm is usually ready to segment its prospect (or existing customer) base into tiers (e.g., High versus medium or low touch customers etc) and thereafter an ABM engagement or outreach strategy can be put in place.
Second, Take a contact-specific approach. Develop a unique engagement strategy for both known and unknown contacts. Third, Drive full team alignment. Hold mandatory communication meetings. Agree on success metrics and review them frequently. Finally, Stick ruthlessly to the plan. Build a plan that includes touch points with clear beginnings and ends, and then stick to it. Don’t go off course if you don’t see immediate results.
In sum, the world is moving towards ABM use. The time is ripe for firms to understand this phenomenon, study its applications, map fit to company and leverage it for business gain.
Sudhir Voleti is an Assistant Professor of Marketing and ISB Research Fellow at the Indian School of Business (ISB), Hyderabad. He is also a member of the core team of NASSCOM’s Special Interest Group(SIG) in Sales and Marketing.