In the history of B2B marketing, account-based marketing (ABM) programs are still fairly new. According to the sixth State of Marketing report, 64% of them were started in the past five years. And they’re gaining in popularity because they generate results. New ABM research shows that most ABM programs generate greater return on investment (ROI) than other types of marketing. In 2020, three quarters of programs cited higher ROI, and about one fourth cited significantly higher return.
Even better: these results aren’t only for seasoned ABM practitioners. They include companies that are just getting started on their ABM journey.
Businesses typically use ABM for one or both of the following reasons:
- They have a limited addressable market
- They find the Pareto Principle applies: 80% of revenue comes from the top 20% of accounts, and they want to implement a more targeted approach to nurturing high-value customers
ABM moves away from a broad-based lead generation method and assumes a more strategic focus on key account growth. With this approach, account-based marketing is used to grow revenue by increasing your conversion rate and your average deal size. We can model this as:
↑ Conversion Rate x ↑ Average Deal Size = ↑ Revenue
Is ABM Right for You?
More and more marketers are moving to an ABM approach because it works. Most marketers say that ABM delivers higher ROI and improves win rates and customer lifetime value. However, that doesn’t mean it’s automatically the right approach for every business. For example, a company that offers a low-cost product and has a large addressable market might want to use a broad-based marketing approach to cast a wider net over their target market.
So how do you determine if ABM is right for you? The first step is starting a conversation with your internal stakeholders. Make sure to include key players across marketing, sales, demand generation, operations, and even your top-performing sales reps.
Next, walk through this simple checklist to evaluate whether or not ABM is right for your organization:
The ABM Checklist
- Do you have a B2B sales function?
- Do you have a limited addressable market?
- Do you have a large average deal size?
- Do you value lead/account quality over quantity?
- Does your product/service have a long sales cycle?
- Do your customers demand a high level of personalization throughout the sales cycle?
- Are several buyers typically involved in a purchase decision of your product/service?
- Do you have high potential for upsell and cross-sell opportunities?
- Does sales focus on a limited number of top accounts?
- Is aligning your internal sales, marketing, and service teams a priority for targeting key accounts?
If you answered yes to two or more of these questions, your business may benefit from an ABM strategy. If you answered yes to all of them, ABM is a must!
Getting Started with ABM
It might be intimidating to think about launching an ABM strategy, but it doesn’t have to be. These resources can help you get started:
- Podcast Series – How to Speak ABM: Target the right accounts and build strategies for successful ABM
- How-To Guide – The B2B Marketer’s Guide to ABM: Learn how to put your customer at the center of every interaction
- On-Demand Webinar – Pivot from Leads to Buying Groups to Win in 2021: Outperform Your Competitors and Achieve the Best ROI with ABM
This blog post was originally written and posted by Daniel Newman in 2018 and updated January 2021 by Jozi Hall.