Do your largest customers represent a predominant share of your revenues? Do you know which of your most prioritized potential customers has the largest business potential? And are your business transactions characterized by high complexity, long sales cycles and many people influencing decisions? Then account-based marketing (ABM) – one of the hottest trends in digital marketing in recent years – may be a solution. Focusing on key customers is nothing new per se, but has become a hot topic in recent years as methods have been modernized and become more effective through digitization, automation and data.
The power of Account-based marketing
ABM can be seen as a rebirth of key account marketing. It involves targeting marketing efforts toward a selection of clearly-defined key customers with long-term business potential, primarily with the help of digital technology to support sales. Key customers are often defined as companies with over 1,000 employees, where every customer can also be seen as their own market. This strategic marketing method is best suited for complex B2B business transactions with long sales cycles and that involve many people influencing decisions, where one normally can’t reach all stakeholders with traditional sales efforts.
There are many suppliers that offer software solutions that support ABM, such as Vendemore and Jabmo. The notable upswing of ABM as one of the hottest trends in B2B marketing is evident through a quick search on Google Trends.1 Since 2015, the ABM trend has been on a powerful rise, and results today in over one million hits. The most common question asked of Google on this topic is, “What is Account- Based Marketing?” Clearly, many leaders and companies are curious about the concept and how they can utilize the method to their advantage. Several studies also show that ABM is high on the agendas of many companies. According to a study by the market analysis company Sirius Decisions, more than 70 percent of B2B companies have hired personnel that are dedicated to implementing specific ABM programs. 2 This can be compared to 40 percent in 2016 and 20 percent in 2015.
One of the drivers behind this is that ABM is more effective for complex sales than traditional mass-marketing methods.3 The primary reasons for using ABM, besides its resulting in higher returns and that the message is tailored to the needs and challenges of specific individuals or companies, are that it increases collaboration and understanding between sales and marketing departments, it reduces unnecessary marketing expenditures, and it is easy to follow up and measure its impact.
“Fokus is key. Do a few things well and forget the rest”.Tim Cook, CEO, Apple
Account-based marketing in the real world
How does this work in practice? Unlike traditional marketing, which is commonly based on attracting as many customers as possible, an ABM program begins with creating a list of a small number of key customers with large potential. These companies are characterized by their ability to benefit greatly from what your company offers. Thereby, it is highly likely that they will consider a purchase from you. They can be both potential and existing customers. One creates profiles of these companies containing everything from demography, needs, challenges, goals, company culture, and interests to who their decision makers are. Such a profile is often called an ICP (Ideal Customer Profile).
The next step is to understand which channels are most appropriate for influencing the customer. It can be social media like LinkedIn, Facebook and Instagram or news sites like Bloomberg or the Financial Times. It depends entirely on who you are targeting. After that, you send your tailored and personalized marketing materials to these companies and individuals through the selected channels, with the help of tools such as IP-based advertising, social selling, email, white papers, webinars, automated marketing, events, presentations, digital adverts, content marketing, or videos. As with all campaigns, the effort ends with follow-up and measuring impact. These activities are best implemented as a collaborative effort involving sales reps and marketing agents. The goal is to increase a specific customer’s awareness of your company and what it offers.
One company that has succeeded with its ABM program is the British telecom company O2. They invested a few years ago in an ABM program in an effort to build strategic partner relationships on the B2B market with companies and organizations with over 2,000 employees. Historically, they had experienced difficulty gaining access to top-level decision makers, but with the competence of their marketing department and the customer instincts of their sales reps they developed a customer-specific report on the advantages of partnering with them. The purpose was to increase their credibility as a strategic IT partner. Their message directly targeted specific decision makers.
Armed with tailored and personalized information, they complemented their traditional marketing by working with each customer individually. In this way, they succeeded in engaging their target group in more strategic discussions with O2 sales reps and, finally, in closing valuable deals. They were also inspired by CEB/Gartner’s method “challenger sales,” which aims to challenge and educate customers in aspects of their own business that they aren’t aware of and, thereby, establish themselves as an expert in the area.
Success was imminent, and the explanation was found in the approach and the strong collaboration between the sales and marketing departments. They started in 2015 with a pilot project targeting a single strategic account. The following year they rolled out a program for an additional ten accounts, and in 2017 they had a full-scale program under implementation with 40 accounts on the list. An additional 80 accounts were in the pipeline. The number of successful deals at that point had increased by 325 percent.
O2 is one of many companies that have succeeded in efforts to utilize ABM. And more can be expected to follow. The main reason is simply that it is very difficult but also profitable to attract new key customers. As usual, pareto’s law applies here, that is that 20 percent of customers account for 80 percent of revenues. It is these few companies that account for 80 percent of revenues that usually are in focus when an ABM program is discussed. Many business leaders understand that these customers are important. What remains for many is to harness this potential through action.
1 Search for “Account Based Marketing” on https://trends.google.com/ 2018-05-22
2 da Cunha, M. (2017, 10 November). Complete Beginner’s Guide to Account- Based Marketing (ABM). [blog post]. Downloaded 2018-10-22 from https://www.wordstream.com/blog/ws/2017/11/10/account-based-marketing