ABM isn’t a quick fix. It’s a long term strategy.
When looking at the ABM process, sales and marketing departments should view the cycle as two different funnels — the nurturing of existing accounts and the identification of new ones. B2B Marketing Directions – The Economics of ABM Account Selection states, “Most ABM experts agree that account selection is the most critical component of any AMB program. Companies typically choose their target accounts by identifying businesses that closely resemble their existing customers.” Whether new or existing accounts, this basic principle of success is described as “look-alike modeling.” If sales and marketers target customers that resemble existing accounts there exists a higher chance that a purchase will be made.
Through targeting the correct accounts, the goal of ABM is to scale. According to ITSMA, there are three different methods in order to scale correctly:
- Strategic ABM: Through a strategic and customized approach, senior marketers work with a small number of accounts. Technology plays a big role in Strategic ABM, aiding in account insights and targeting communications.
- ABM Lite: This method works with several accounts at a single convergence. Marketers and sales work together during key points, including deciding which accounts to target, which issues to highlight, which promotions to feature, and how to tailor content. Through identifying businesses with similar attributes, ABM Lite can be described as a one-to-few campaign mindset. “Technology becomes more important here, helping automate the account insights process, campaign execution, and measurement.”
- Programmatic ABM: This approach is run by a single marketer, and is ideal for companies already engaged with ABM who are looking to improve sales alignment through a demand generation process. Programmatic ABM “Emphasizes new technologies that automate ABM-inspired tactics across hundreds or even thousands of identified accounts.”
For ABM to be successful, it is important that sales and marketing teams are completely transparent with one another, working together to define the Customer’s Lifetime Value (CLV). When defining CLV, it’s a matter of economics. One way to define a lasting value, explained by Azalead, is to “Identify employees at specific companies who are researching products and services, and then customize sales programs and marketing messages to meet the needs of buyers and influencers at that company.” This mindset will contribute to larger deals, faster cycles and better conversion rates.
ABM can alleviate that “shooting in the dark” feeling in favor of a qualified, tailored-made approach (read more the differences in our previous post).
Focusing on CLV will require sales and marketing teams to understand that time, money, and energy are wasted without tailored-made approaches. The Economics of ABM Account Selection continues to explain, “New customers will contribute to profitable growth only if the profits they create exceed the cost you incur to acquire them,” emphasis ours. “Therefore, the estimated CLV of a prospective customer establishes the ceiling for how much you should invest to acquire that customer.” ABM’s main focus is to develop and retain key accounts in order to generate larger deals, faster cycles, and better conversion rates.
Or, as summarized by CIO, “ABM is the growth strategy of choice because it drives the outcomes that really matter to business: increased pipeline and revenue.”
Author: Ayla Quinn