Marketing

3 Strategic Approaches to Account-Based Marketing (ABM)

A new benchmark study from the ITSMA and ABM Leadership Alliance, titled: Driving Growth With Three Types Of ABM, found that  ABM has improved the three Rs of strategic marketing:

  • 84% of respondents said that ABM has improved their reputation (brand perception, awareness, and knowledge);
  • 74% said it has improved relationships (number of relationships across accounts); and
  • 69% said ABM has improved revenue (annual revenue per account).

The research goes on to say that more than half of marketers surveyed have implemented One-to-One ABM (54%) and One-to-Few ABM (51%), while a little less than half (42%) have implemented a One-to-Many strategy. While most companies are tuned into one of these types, a growing number are beginning to experiment with a couple (23%). Some even have all their bases covered with a blended strategy of all three types (12%)

A few years back, marketers did not see the need and did not have the necessary resources to embark on specialized means of reaching out to potential customers and businesses broadcast the same message to every single customer. With the world becoming a “global village” marketers have, however, being able to gain access to a wealth of individual consumer data and insights, making it easier to personalize their efforts for maximum effectiveness.

While this may sound strange to a lot of people, the actual fact is that the Information Technology Services Marketing Association (ITSMA) pioneered the concept of Account-Based Marketing in 2004 to help marketers stop generic sales pitches and zero in on the essential needs of their most important clients.

In the business-to-business world, these personalized campaigns happen in the form of account-based marketing (ABM). In ABM, a company starts the process by identifying a potential target and then markets specifically to those targets with a more personalized approach.

By marketing individually to each client based on their needs, you can demonstrate your value and ultimately increase sales with that account. A research carried out by Altera Group found that 97 percent of marketers said the ABM approach yielded a higher return on investment

For the fact that ABM requires more account-level personalization than traditional marketing it definitely must cost more to implement. However, advances in marketing technology have enabled marketers to employ ABM for much less than previously possible and at much greater scale

In most corporations, marketing and sales were seen as two separate bodies but with ABM, it’s now possible to create the perfect alignment. It’s far too easy for marketing, and sales departments to each go off and do their own thing. Now, it’s more necessary than ever before to plan together and then execute together.

ABM simply goes after the same targets as sales, charting out a course for the salespeople to follow with any, a combination, or all of these approaches.

  1. Strategic ABM approach

Strategic ABM is about ‘doing the right things’ using the ABC information to decide which products to develop and which activities to use. It can focus on profitability analysis, identifying which products/customers are the most profitable and for which sales volume should be developed.

This original ABM approach is usually reserved for strategic accounts and executed on a one-to-one basis. The reason is that every customer is unique with their set of demands or needs. To identify that uniqueness and cater to them is the recipe to win over the today’s customers.

Strategic ABM gives account teams the opportunity to build stronger relationships with a company’s most valued customers and prospects by creating highly targeted marketing interactions that demonstrate an in-depth understanding of their business issues. The client is the focal point in Strategic ABM and it’s is done with them, not to them, to drive value for both companies.

With this approach, a dedicated, senior-level marketer works directly with one or a few strategic or key account teams on the sales side, and crafts fully customized marketing plans and programs for each individual account as an integral part of the overall account plan. The customization is definitely the newest branding strategy as it plays an important role in increasing the efficiency, ensures maximum optimization of resources at hand, & cutting down unwarranted wastage.

  1. ABM Lite approach

ABM Lite is one-to-a-few. It works by grouping accounts with common values, like challenges, business motivations, and even vertical market. A one-to-few, cluster-based approach can split the difference by focusing customized programs on small groups of accounts with similar business issues and initiatives.

Marketers craft highly targeted value propositions based on deep insight, a new point of view, and tight collaboration with sales. Examples might include groups of 5-10 large grocery chains, restaurant, Café, bakery, automotive suppliers, or life science firms, each group having similar business challenges.

Since ABM Lite uses a “one-to-few” account strategy, the ROI may generally be lower in ABM Lite will than with strategic ABM and as is expected, so too will the actual investment.  Moreover, ABM Lite still offers the benefit of being far more personalized and potentially impactful than a non-ABM methodology – and, as such, promises substantially greater ROI.

Indeed, according to the ITSMA 2016 Account-Based Marketing Survey, more than two-thirds of all ROI-measuring marketers who use ABM Lite report that ABM Lite “delivers higher ROI than any other marketing approach” (i.e., including Strategic ABM).

  1. Programmatic ABM approach

Programmatic ABM is a highly scalable approach to marketing and sales that justifies focusing on targeting and personalization. Programmatic ABM involves targeting lists of 100 to 1,000 accounts that share common traits and business challenges.

With Programmatic ABM, marketing shifts its traditional focus from generating, nurturing, and tracking leads by an individual to an account-based view. This one-to-many approach, enabled by marketing technology, allows marketers to scale to reach a large group of target accounts efficiently and effectively.

It results in better win rates, larger deal sizes, more opportunity creation, and ongoing revenue growth from current customers. This is possible because of the latest technologies that enable razor-fine targeting, analytics, and personalization across hundreds or even thousands of identified accounts.

With just one marketer working across hundreds of accounts, Programmatic ABM is much less marketing resource intensive and can provide coverage far beyond Strategic ABM or ABM Lite.

Programmatic ABM can and should be aligned with the company’s sales coverage model.

Companies use Programmatic ABM to target specific segments (e.g., horizontal or vertical markets) or other groups of named accounts selected from across an overall market.

The flip side of ABM is ABS: account-based sales. An ABS approach is the same as ABM in that sales teams target specific accounts and their needs, except it’s through sales strategies. Often sales and marketing overlap, which is why it’s of the utmost importance that you line up the two types to avoid redundancy or gaps in between.

Photo Credit: Roberrific Flickr via Compfight cc

 

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About John Ejiofor

John Ejiofor is a curious life-researcher, whose quest to finding answers to life's pertinent questions has led to founding Nature Torch. This blog aims to debate and explore many questions about our earth -- including those a lot of people are uncomfortable with asking. He has been published on some of the internet's most respected websites, which you can find online.
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