The 7 Principles of Account-Based Marketing (ABM)
By Jason Garoutte
May 24, 2016
In 2008, Salesforce.com was growing quickly toward 1,000 sales reps. Every conversation was about growth. We called our processes “machines”, and every machine was scrutinized for scalability. One area we wanted to improve most was strategic deals—the 7 or 8 figure deals that only happen when you can solve big problems for big companies.
As the person running Sales Strategy, I facilitated the process of designating strategic accounts. When we were done, we asked some very talented Account Executives (AEs) to focus. Some of them got just 3 accounts for the whole year. That was a lot of focus, and I wasn’t sure it would pay off. I was wrong.
If your goal is to win big deals, this is the ABM for you.
We started to see deal sizes like never before. Not every account hit, but the ones that did made up for it. The lesson was clear: it pays to go deep with high-potential accounts.Focused attention is the surest way to engage all the necessary stakeholders and to discover the true needs of the account. Big deals require multiple influencers to talk and agree, and it takes steady attention to steer that group.
Today there is renewed interest in supporting this type of sale with account-based marketing, or ABM. But different people define ABM in different ways. The traditional definition of ABM is to treat each account as a market of one. (For example, see ITMSA.) This approach says you should learn about each customer and their unique needs. Tailor your pitch, and perhaps your whole solution, to the account. It’s high-touch. It’s solution selling. If your goal is to win big deals, this is the ABM for you.
With all the noise from technology vendors, you might think ABM is something you can buy. But ABM is not a product; it’s a process. In over 15 years of b2b marketing, I’ve seen recurring themes about how to succeed in high-touch B2B selling. I’ve distilled these lessons into 7 principles for ABM. As you evaluate products, make sure that they support your process. Consider these principles to point you in the right direction.
Decisions are social (so build consensus)
The modern corporation is quicksand for decisions. Decisions emerge from a complex social dynamic involving many stakeholders and influencers. As I’ve written, enterprise purchases require 3-10 decision-makers. As deal size grows, so does the number of people involved.
To align social groups, you need to build and maintain consensus. Though unanimity is often impossible, consensus is not. With careful work, you can inspire a group to take action. When you do, act quickly. Good reps always take the deal off the table when they can, because experience shows that if an advocate leaves, or priorities change, consensus goes back in the quicksand.
It’s important to remember that most of the buyer conversations occur without you in the room. You’re just a small part of a social group. Even the best sales rep can’t meet regularly with every possible influencer. That’s why marketing is so important. Sales needs Marketing to foster alignment across the broader decision group. So the ongoing priority in ABM is to identify all the relevant influencers and entice them into persuasive experiences. The goal is to cultivate a shared understanding about their needs and fixes.
Every customer is unique (so tailor your story)
Once you acknowledge the small voice you get in the buying process, it’s clear your story has to stick. You need everyone inside the account talking about your value prop after you leave. How do you do it? Extreme relevance. ABM gets your message across by phrasing things in the most relevant terms: how you will address the customer’s unique needs. It works even better when you use the exact words your customer uses.
Many companies pay lip service to personalization, starting emails with “dear [first name]” or making vague reference to the recipient’s industry. In ABM, this doesn’t cut it. Instead, you must learn about each account and tailor your story. Every account is different, with unique challenges, org structures, and goals. If you listen, and demonstrate that you’re listening, each interaction deepens the relationship.
Ultimately, ABM is like good salesmanship. Good selling has always been about listening. In contrast, Marketing has tended to speak in abstractions because they didn’t have time to tailor. Generalized stories scale for big campaigns. But batch campaigns are antithetical to ABM. Don’t make the buyer think. If a customer reveals a relevant corporate initiative, learn the exact phrasing they use, and bring those words into all future presentations.
Sales reps are closest to customers (so work as a team)
Don’t be fooled by the “M” in ABM. ABM is actually a collaboration between Marketing and Sales. Marketing may initiate most touches, but Sales gets the advantage of direct contact. When you first tailor your message for an account, you might have to make some guesses. But as soon as Sales gets into a dialogue, capture nuggets about the customer’s goals and corporate initiatives.
Another way Sales helps with ABM is program execution. For example, invitations to high-potential contacts work best when they’re sent from a known contact (ideally with some personalized messaging.) For example, when the field marketers at Salesforce.com want customers to attend a dinner, they ask AEs to customize and forward an invitation template.
Perhaps the most important contribution from Sales is feedback. When Sales talks to customers, they learn if content was shared. They hear if an event got people talking. Marketers see metrics like click-rate, but that’s no substitute for the nuanced body language visible to Sales.
In traditional demand gen, Marketing found MQLs and passed them to Sales. It was a clear hand-off. Now with ABM, Marketing and Sales work in parallel. As CEOs increasingly ask marketers to share responsibility for revenue, collaboration with Sales will be assumed.
Change is constant (so swap accounts when it’s time)
With ABM, it’s tempting to get hung up on the target account list. Which accounts deserve special focus? Money is on the line, and the process can require politics and diplomacy. As a result, people are anxious to keep a final list in place for a long time. But static lists are problematic.
The truth is that every account is picked with some guesswork. Sales reps guess at the long-term potential. Marketers guess at the fit based on industry codes. While predictive technologies are better than intuition, they’re still based on fallible models. In short, ABM has a chicken-and-egg problem. You won’t want to invest in an account until you’re sure there’s potential. Yet you won’t know the potential until you invest, meet people, and learn. What to do? You just have to make your best guesses and get started. You’ll learn as you go. Sales gathers information about goals and priorities. Marketing systems gather information about engagement. If a target is a bad fit after all, it has to go. A company should be willing to modify the target list based on real insight.
Agility, however, is not an excuse for giving up. Persistence is still a virtue. So it’s important to decide (and communicate) your company’s criteria for swaps. Consider the experience of Nick Ezzo (now a VP of Demand Gen at Host Analytics.) When Nick orchestrated an ABM program at TuVox, his team settled on a long list of potential accounts, picking 20 for immediate investment. All activities focused on those 20 accounts. If TuVox could not confirm, using a prescribed battery of attempts, that the account had potential, it was dropped from the 20 and replaced by the next one down. Their list changed many times a year.
Relationships have inertia (so take the long view)
ABM bears a close resemblance to customer marketing and installed-base marketing. The highest potential accounts are usually customers already. Part of this is politics; it’s easier to convince your colleagues that an account will pay off if it’s already demonstrated a willingness to buy. But mostly it’s about the insight. Early transactions give Sales a chance to ask, learn, and strategize. At Salesforce, we attributed much of our success to a conscious “seed and grow” sales strategy.
ABM is a battle for trust, and trust is earned over time. Relationships build on a history of promises kept. While it may be possible to find at least one supporter in a hurry, it takes time to establish broader trust. Companies must think about account plans in terms of years, not weeks. They must market to accounts throughout the entire lifecycle.
A lifecycle approach begins early, before a prospective buyer even seeks a solution. From there it progresses through the stages of the buyer’s journey, before and after a transaction. It includes adoption, success, and upsell. Nicolas Draca, the VP Global Demand Marketing at Twilio, describes the lifecycle as one of 4 pillars in demand marketing. Marketing must not only help customers discover and select but also use and recommend. A happy customer is more likely to buy additional product, either through expansion or cross-sell, so Draca draws lifecycle marketing as a virtuous cycle. Each trip around the cycle increases trust and revenue.
Traditional demand generation did not take the long-view. It focused on leads, passing them to Sales, after which Marketing stepped back. This focus on leads missed the potential of shaping a consensus over time. It missed the potential for seed-and-grow. If the only marketing metric on your dashboard is leads, you’re not doing ABM.
Buyers are overwhelmed (so be persistent)
Back in 2012, Aberdeen Group found that customers receive an average of 10.8 touches as prospects. “Companies should use these touches to not only inform and educate, but to establish a relationship that gives the prospect a sense of the kind of company with whom they’ll be doing business.” They noted that it’s rare for anyone to buy after just one touch.
True persistence requires more than one tactic and more than one channel. If everyone sends a ton of emails, it’s harder for yours to stand out—even if you follow all the best practices. So ABM programs need to use multiple channels to reach different personas: events, telesales, and direct mail. Webinars are popular, but executives almost never attend. For reaching executives, direct mail is in vogue. Once, at Salesforce we shipped phones, pre-programmed to call our CEO. At my last company, we shipped fortune cookies containing a unique URL to personalized content. On their own, these tactics won’t create an opportunity. But, they absolutely get attention and work great in concert with other channels.
When you focus your investments on just the right accounts and just the right people inside those accounts, you don’t have to have the biggest budget. You can wage efficient campaigns that are persistent and multi-channel.
ABM is a competition (so never stop improving)
Marketing has always been a competition to stand out. With new channels, early adopters are rewarded. As late adopters saturate the new channel, its efficacy drops and so does the ROI. Consider 2007, when the hot channel was Google AdWords. The ROI was great. After a few years, competition increased, and now B2B marketers are very selective about keywords and bids.
Is ABM destined for a similar fate? No. ABM is not a channel that can be saturated by over-use. Rather, it’s a process of learning how to work best with customers. Like any strategic process, ABM deserves continuous improvement. What is working? Where is the waste? As new channels and technologies emerge, organizations can experiment, refining the mix that seems to work for their market. Just as Japan’s auto manufacturers taught the world to value continuous improvement in factories, marketers can now embrace the same in their profession.
Surveys ask marketers if they’re doing ABM, as if it’s a yes/no question. Clearly the answer should be more nuanced. Mark Ogne has said in presentations that most marketers who say they’re doing ABM are actually just talking about list-based marketing. Some are working with vendors that sell account-based ads. These are fine components to the process, but the process is bigger. The key is to continue improving how you do it. If your competitor is better at ABM than you are, you’re not going to win.
To measure their improvement, organizations should look for gains in their pipeline, sales cycle, close rate, revenue, and growth in the installed base. The most practical and immediate measure is new pipeline. Compare pipeline generated at target accounts versus other accounts. If you’re able to allocate program costs, compare the pipe-to-spend ratios for targets and others. Larger teams should also consider new metrics like content engagement and net promoter score to instrument the buyer experience.
Those who adhere to the 7 Principles of ABM will deliver the best experience. They’ll earn customers’ trust and build relationships for the long-term. The marketers who build the process will forge a strong bond with Sales and put their company out in front of competitors.
A few years ago, 89% of companies surveyed by Gartner said that by 2016, they expected to compete primarily on the basis of customer experience. That’s amazing. The stakes for ABM have never been higher, and we’re entering one of those rare windows of opportunity for early adopters to get the jump on competitors.
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