What is account-based marketing?

Account-based marketing (ABM) is a B2B marketing strategy that focuses on working with target accounts to market in a measured and structured way. ABM is effective in aligning sales and marketing teams to develop customer relationships that grow business and return-on-investment.

ABM isn’t a new approach, and has been used by B2B marketers for well over a decade. But rapid advances in the sophistication and accessibility of relevant data — and in the technologies that today enable ABM — are now fueling widespread interest in and adoption of this approach.

The account-based marketing approach

A successful B2B account-based marketing strategy aligns sales and marketing departments to focus on high-value accounts that represent the highest potential business opportunity. ABM “flips” the typical sales funnel by starting with a small group of identified accounts (rather than casting a wide net at the top) that widens as accounts are nurtured down into the funnel. The first requirement for ABM success is, therefore, data segmentation.

ABM data and research

To understand which accounts are high value or have high-value potential there must be a data-informed research phase. This should include recent sales figures as well as a reasonable amount of historical sales-by-account, which may help you find warmer prospects who may have spent more with your business in the past. Also consider the future opportunity potential. Whether the account is growing or in a growth-oriented market. If you don’t already have it, you can start with this to create a seed list of high-value accounts to develop your business’s Ideal Customer Profile (ICP).

An ICP is typically developed using predictive analytics and scoring to determine if an account (not an individual) is an ideal fit for a company’s product or service. The ICP should consider relevant characteristics including industry/vertical, size (both employee number and annual revenue), budget and geography. Combine your ICP list with your existing high-value accounts to create your first list of accounts to market to with the ABM approach. This defines ‘who’ you are targeting, the next stage is ‘how’ to target.

What are the types of account-based targeting?

Once sales and marketing teams have agreed upon the list, there are typically three types of ABM targeting that can be executed. They are not mutually exclusive, and many companies use more than one. They have been defined by the Information Technology Services Marketing Association (Momentum ITSMA) as follows:

• 1-to-1. Also called “Strategic ABM” by Momentum ITSMA, marketers work with account teams to develop and execute highly customized programs for each target account (i.e., face-to-face or virtual meetings).
• 1-to-few. Also called “ABM Lite” by Momentum ITSMA, marketers execute less customized programs for clusters of target accounts with similar needs or business attributes (i.e., email marketing campaigns, in-person or virtual roadshows and events geared toward groups).
• 1-to-many. Also called “Programmatic ABM” by Momentum ITSMA, marketers use AI-driven automation to send highly targeted and personalized messages to individuals at hundreds (or thousands for enterprises) of key accounts (i.e., email, web content personalization, digital advertising and retargeting, live or virtual events for large groups).

We’ve discussed defining who to target and how to target with the ABM approach, so it naturally follows that we examine key differences in what we target.

Campaigns and content in the ABM approach

The main advantage of account-based marketing is in the level of tailored personalization in campaigns, and all content within a campaign. The purpose of identifying and segmenting our high-value/ICP (let’s call them key accounts) is so that we can tailor every aspect of the way we market to them at all stages of the funnel. Account-based marketing therefore, is cross-functional and maximizes the efficacy of sales and marketing efforts. 

Here’s a scenario to illustrate how this might work in practice, imagining a company that provides gardening and landscaping services that help businesses improve employee wellbeing: 

The company developed a new initiative, which it successfully piloted with an existing key account. This initiative is the design and creation of a large, living wall, situated in the workplace common area, which is used for informal meetings, breaks and lunches.

Employees at the key account were surveyed a month prior to installation, to assess the level of overall wellbeing, determined by scoring levels of satisfaction, stress and happiness at work. The same survey was repeated one month post-installation and all response areas had improved by over 30% on aggregate. The customer at the pilot company was so pleased with results they would be happy to provide testimonials to other businesses.

The marketing team is now tasked with a phase one rollout of the living wall initiative, to no more than five other key accounts. This is because of the level of customer investment, the effective size of the customer wall and common area, and the company installation team resources. Using an account-based marketing approach, the living wall campaign, might shape up as follows:

• The marketing team defines an intimate event. A key account dinner, with after-dinner speaker; a non-partisan expert from the local botanical gardens
• The marketing team secure a speaker and agree the talk title “The Power of Plants in Promoting Human Well-Being”
• The marketing team brief the key accounts sales team on the living wall campaign objectives and constraints
• The sales team, with their knowledge of each key account, and that accounts’ workplace common areas, identify a list of 12 suitable prospects
• The sales team begin to explore the concept in conversation with the prospects to get a sense of any barriers and prospect availability
• The marketing team identify a suitable venue for the dinner, set a date (incorporating feedback from the sales team), and create an invitation which is custom-printed onto a packet of seasonal seeds
• The marketing team briefs the pilot customer who creates a short talk about the significant increase in their employee wellbeing to deliver at the dinner
• The sales team reach out to the invite list to confirm attendees
• The dinner takes place, interest in the living wall concept is extremely high
• The sales team follows-up post event, securing 3 sales as a direct result
• The marketing team can easily calculate the ROI of the living wall campaign dinner by subtracting the budget from the value of the 3 sales

Using this scenario, we can see how campaign and content within the ABM approach can be much more targeted and considered. The approach is consultative and maximizes efficiency by requiring cross-functional collaboration between sales and marketing. This brings us to a wider consideration of the benefits of account-based marketing.

Account-based marketing strategy

ABM accounts organization

With account-based marketing, your first strategic move is to ensure your target accounts are organized in a way that will govern when, how and how often you market to them. This should align with your top-level business goals and values. For example, if revenue growth is your north star metric, it may suit your organization and ABM marketing strategy to organize your accounts into ‘Platinum’, ‘Gold’ and ‘Silver’ tiers according to spend and spend potential.

Alternatively, if your business goal is to grow the profile by signing the ten biggest Fortune 500 clients in your sector you may organize your accounts by their business size with the ten biggest being your ‘star’ accounts. The nomenclature is up to you!.

ABM record keeping

Whatever your size of organization, if you want to approach ABM strategically you will need a way to keep good records of your accounts and their organization) be it tiers or starred accounts). If you’re a small business about to embark on ABM as part of your marketing strategy you will still need to consider safe record keeping, how much data you need to market effectively and how it may scale if successful.

It may make sense to consider third-party software, ready-made to help you manage your accounts. Ask yourself these five questions to assess if you are ready for an ABM solution. Aside from understanding and recording your accounts and their structure, the most critical considerations are integration with your marketing goals, and how your system will track, measure and report results to the C-suite.

Strategic account management

Now that our accounts are organized strategically, according to the business priorities, we then need to think about how we manage each account from a marketing perspective. This means a strategy according to the account priority. It follows that we may require multiple strategies if we have multiple tiers. We want to think about variables such as:

Frequency. How often do we market to each tier?

Budget. Which campaigns do we apply to all, mid-tier and top-tier accounts and what budgets are assigned to each?

Logistics. Do top-tier campaigns include in-person events? Do geography and circumstance facilitate this for our top-tier accounts?

Resource. Do we have the people and skills required to create multi-tiered campaigns tailored to our accounts?

Benefits of account-based marketing

While we’ve included some of the benefits of ABM within the explanation and scenarios above, let’s unpack them specifically here:

Personalized marketing approach: Focusing on ICP to identify a set of key accounts, means that you can manage resources to effectively personalize how and what you communicate to these key accounts.

Aligns sales and marketing: Working on key accounts gives the business a unifying target that sits across both sales and marketing remit. Moreover, the key account status could also denote how customer service and service delivery teams can prioritize and delight the customer.

Maximize efficiency: While aligning sales and marketing efforts is an immediate efficiency-win from a resource perspective; ABM maximizes revenue efficiency with improved personalization (proven to drive growth), as well as efficiency saving in growing existing accounts, which is more cost-effective than new business acquisition.

Builds relationships: The level and variety of connection and communication, combined with the personalized ABM approach fosters deeper relationships across both sales and marketing functions.

Increased customer loyalty: As relationships across the business to the customer deepen this naturally embeds the customer further, meaning multiple touchpoints and leading to increased repeat business and overall customer loyalty.

Shorter sales cycle: Rather than a more traditional marketing funnel approach, which might go – Prospect → Identify → Research → Shortlist → Present → Close with ABM, we’re starting the party when the cool kids have already arrived. The ABM sales cycle is more like – Identify →  Present → Close. (See example campaign scenario above).

Demonstrable ROI: As sales and marketing are fully aware of the key accounts list, and in control of the message and communications, it is far easier to demonstrate the ROI from each marketing campaign and component activity.

ABM tools and platforms

A wide variety of ABM tools are available to automate and execute strategies. These include tools that provide B2B data enrichment, AI-based predictive analytics and recommendations, interaction management (i.e., digital advertising, direct mail, websites, events and sales outreach) and ABM infrastructure and orchestration.

Since data enrichment is a chief capability of ABM tools, it’s first to understand the types of data these platforms work with:

• Firmographic data. Provides quantitative business information, including vertical market, company size and number of locations, number of employees, annual revenue and growth. 
• Intent data. Identifies company actions or signals that indicate whether or not an account is “in market” for a product or service.

And of relevance to technology vendors:

• Technographic data. Identifies the hardware and software systems that accounts use to run their businesses (relevant for tech vendors). 

Now, let’s dig into all of the capabilities and the key considerations involved in choosing an ABM tool.

Data enrichment

Effective ABM begins with robust, accurate account data. While many B2B companies collect vast amounts of first-party data, there are often gaps that negatively impact efforts to customize content or offers for target accounts. Some vendors and their partners provide very specific types of business data, as well as broad-based business data, that can provide important insights into purchase intent.

Account-based marketing targeting

ABM programs can target key accounts at the 1-to-1, 1-to-few and 1-to-many levels. The targeting precision needed will depend on the size and scale of the ABM efforts: SMBs may need a 1-to-many approach because of the number of contacts or influencers at their target accounts, while larger enterprises may find that 1-to-1 targeting allows them the customization necessary to successfully nurture a key account. Most vendors provide machine learning and the granularity to enable more than one level of account targeting.

Personalization and/or predictive recommendations

B2B buyers expect personalized messaging and offers from the companies they do business with. Some vendors use proprietary AI to allow customers to create and execute highly personalized campaigns and programs. On the other hand, many vendors integrate with third-party personalization tools or CRM platforms that drive these types of customized programs.

Interaction management/orchestration

B2B marketers must engage target accounts on multiple channels with highly customized and consistent ABM programs. Effective B2B channels include both offline (direct mail, events, roadshows and in-person/phone-based sales outreach) and online (email, websites, virtual events, video calls, webinars and paid/organic search, display ads and social) media.

Many vendors manage ABM interactions, including offering cost per click-based paid ad programs across search, display and social media.

Third-party software integration

Vendors are aggressively expanding their application architectures through native integration and APIs to offer B2B marketers streamlined access to the third-party systems already in their technology stacks. Native or out-of-the-box integrations are most commonly available for CRMs and marketing automation platforms, although many tool vendors also offer plug-and-play access to event platforms and content management systems (CMSs).

Several tools are specifically customized for Salesforce integration and use. API integration may incur additional charges, generally on a per-call basis for each data download.

Explore ABM capabilities from account-based marketing vendors like 6sense, Demandbase, Salesforce, Integrate and more in the full MarTech Intelligence Report on account-based marketing platforms.

Click here to download!

What are the benefits of using automated ABM tools?

Automating ABM data, analytics, campaigns and workflow processes can provide numerous benefits, including the following:

• Improved sales and marketing alignment. 
• Shortened sales cycles. 
• Increased marketing ROI. 
• Expanded account value and revenue. 
• Significant boost to pipeline velocity and closed rates.
• Enhanced customer experiences. 

Measuring and reporting ABM success

Although it is a time-tested strategy, ABM is still new to many B2B organizations, and, even for those that have been doing ABM, there’s still plenty of room for expansion and integration. As a result, measuring and reporting on program success will be vital for ongoing C-suite support, as well as securing sales team buy-in.

While software vendors are expanding their reporting capabilities through investments in AI to provide faster, deeper and more visual analytics that can highlight performance trends and patterns (highest performing geographic locations or company characteristics, for example) if you’re measuring and reporting success directly, either using in-house systems or good old spreadsheets here are some of the metrics to consider:

Sales: With the greater cross-functional collaboration in the ABM approach, it’s much quicker and more tangible to measure the sales results from the marketing campaigns.

ROI: Hand-in-hand with the greater accuracy in tracking sales from ABM initiatives, is the ability to accurately show the return (value of sales), on investment (cost of marketing).

Funnel progression: Which may be different according to the campaign, content and method of distribution you choose for each aspect of your ABM campaigns. For example in our earlier scenario we would want to look at invitations accepted, post-event meetings booked and then stages to close of sale.

Sentiment and qualitative metrics: Afforded by the deeper relationships and personalization of the ABM approach, you can survey and assess your customer ratings (of you/your service), and other less intrinsically commercial numbers. Here’s a great in-depth further reading by ABM contributor Stephanie Trovato, on How to measure what matters in account-based marketing.

Hopefully you now have a good understanding of account-based marketing and how it might slot into your business marketing strategies. We’ve discussed what ABM is and the key benefits of adopting this approach to deepen your customer relationships and grow business through personalized experiences. This is of course, just the start and we do have a number of additional resources that zone in on more of the specific aspects and considerations of ABM in detail.

ABM FAQs and further reading

Do I need a strategy to begin account-based marketing in my business?

Account-based marketing is an intrinsically strategic approach to deeper communications with ideal customers. Without a strategy there is no ABM. Read more.

Does ABM drive business growth?

Yes. ABM is succeeding where demand-gen models face difficulties and constraints due to increasing privacy concerns. Read more.

Can I use an ABM approach for new customer acquisition?

Think of the ABM ICP approach as a transferable framework! It is absolutely possible to apply this then to prospects just like your existing clients. Here’s how.

Do I need software or some form of CRM platform to manage my ABM?

This can be a difficult to answer question, as much depends on your company growth plans and vision. Here’s the MarTech guidance on ABM platforms and how to assess your business readiness.

How do I approach a demo with ABM software vendors?

If you do decide to embark on a journey of finding an ABM platform vendor it can be really overwhelming to compare and contrast features and capabilities. We don’t know what we don’t know, right? We’ve come up with a long list of questions you can consider putting to your shortlist during a demo, which will really help you get to the crux of what’s right for you.