Every now and then, certain buzzwords make their way into the B2B marketing world, promising to turn the industry upside down. The new buzzword that everyone seems to be talking about is “Account-Based Marketing,” or ABM for short.
So what exactly is ABM and why should we care?
Account-based marketing started off as a way for really large companies to sell really big service offerings to other really big companies. The basic idea is that you think of each target company as a single account, and you pool together all your marketing resources to go after that one account together. You use one consistent message and offer across every contact person of that account in the hopes of landing that one monster contract that involves divisions, departments and entire regional offices.
What’s innovative about the approach is that it essentially flips the sales funnel upside down. Think of the standard sales funnel – you have thousands upon thousands of leads that go into the funnel, but only a small percentage – maybe 5 percent if you’re lucky – emerge at the other end of the funnel. And to get even that 5 percent conversion rate, you have to expend a lot of time and energy customizing and personalizing messages, chasing down prospects, and constantly pushing people through the sales cycle.
When you flip the funnel, you basically say, OK, I’ll settle for 5 big accounts out of every 100 possible accounts out there, but I want the biggest 5. And, instead of having to personalize and customize for those 100 possible accounts – I just want to focus on creating five sets of messages and offers and then let every person on the account team take the same approach to closing the sale.
For now, the ABM approach seems to be working. According to MarketingProfs, companies using the ABM approach generate 208 percent more revenue than those that don’t. No wonder 90 percent of marketers are at least willing to listen to the appeal of ABM marketing. Who wouldn’t want to make more money and close more accounts?
But take a step back – there’s a reason why the ABM approach started at the biggest companies – big companies like to buy from other big companies. It makes them feel comfortable and it’s just plain more efficient to sign one big contract rather than lots of smaller contracts. If you’re a smaller company, you wouldn’t even be able to get a meeting with a top decision-maker at a major company.
For smaller companies, then, the key is to take the basic idea and philosophy of ABM and then adapt it for their own needs using digital tools at their disposal. For example, the idea of moving away from “buyer personas” and focusing instead on
“accounts” is an interesting one. So is the idea that it’s more important to know about the structure of an industry than it is to know about the specific thoughts and preferences of key decision-makers.
And, finally, the idea of flipping the sales funnel is a great to streamline your marketing efforts. Instead of settling for a 95 percent rate failure rate and calling it a day, ABM challenges you to re-define your approach to marketing so that it’s not just a numbers game.
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