Account Based Marketing (ABM) for Small Businesses
As data and technological innovation improves customer experience and retention, businesses across the globe are evolving their marketing efforts to focus on the accounts that can make them the most money. And while this evolution in marketing has been the focus primarily of larger companies, it can be useful for certain small businesses, specifically those that spend a great deal on customer acquisition. One marketing strategy that can be particularly helpful for some small businesses is target account marketing, which has been around for years and is considered an industry standard for successful long-term marketing efforts. Using target account marketing can help businesses individually target prospects, message to them effectively, and improve the return on investment of marketing efforts.
Recently, the target account marketing strategy has been rebranded as account based marketing (ABM), largely due to the increased role marketing automation technology has played in the process. The terms are synonymous and will be used interchangeably on this page. Account based marketing has become so popular that now 85 percent of marketers say it outperforms their other marketing investments. So how do you benefit from ABM as a small business? And what exactly is it? This guide answers these questions and more in an attempt to help you use ABM to grow your business.
Defining Account Based Marketing
There’s a good chance you have heard the business mantra that 80 percent of revenue comes from 20 percent of customers. Account based marketing’s roots are grounded in this idea – the strategy seeks to cater to this “20 percent of customers” by focusing a greater portion of marketing dollars on the accounts that generate the most revenue. This idea seems almost intuitive; why would you evenly distribute your marketing budget across your accounts when a minority of your customers are driving the majority of your revenue?
In more specific terms, ABM is primarily a business-to-business (B2B) marketing strategy in which an organization targets specific customer accounts and treats them as markets of their own. To do so effectively, and to adequately distribute marketing funds, it is imperative that the marketing and sales teams work closely together. This alignment between marketing and sales is a critical aspect of ABM, which David Cain, GVP of Global Marketing at Marketo, describes as a strategy that “focuses marketing and sales resources on a defined set of targeted accounts and employs personalized campaigns designed to resonate with each individual account.” He continues, “With ABM, your marketing message is based on the attributes and needs of the account you’re targeting.”
The Basics of Account Based Marketing
At its most basic level, account based marketing requires the alignment of sales and marketing to generate insights and personalized strategic thinking for individual customers. These insights and strategies can help your customers think differently and can also help your company sell as many goods and services to your individual customers as possible. For these reasons, account based marketing is a preferred marketing strategy among enterprise sales teams who have the resources and infrastructure necessary to target large accounts.
However, ABM can also benefit small businesses in search of a customer base – the strategy helps focus efforts on potentially profitable accounts instead of wasting efforts on a large market segment. Creating personalized campaigns using target account marketing can also be extremely beneficial. A more targeted approach can help expand business within existing customer accounts and make ABM a long-term strategy for increasing the value of your customers. Additionally, ABM presents a more sustainable approach to marketing than traditional strategies. Marketers who have a comprehensive understanding of how clients think and tick can strengthen business relationships and catalyze ongoing campaigns.
Target Account Marketing vs. Traditional Marketing
The key to successful target account marketing is to engage customers in a highly personalized way – a strategy that starkly contrasts with that of traditional marketing. For example, when a company uses a traditional marketing strategy to appeal to consumers, it typically ignores many differences between market segments and attempts to gain maximum exposure across the largest possible audience. This business-to-consumer (B2C) mass marketing strategy is on the opposite end of the spectrum from B2B target account marketing, which focuses on building strong relationships with individual customers and prospects. Traditional marketing can narrow its focus somewhat, for either B2C or B2B, by using “personas.” Personas can in fact help marketers target their audience more effectively, by showing ads in specific time slots or on specific websites for example, but this is still a much broader approach than an ABM campaign.
The Difference Between ABM and Lead Generation
ABM is similar to lead generation in many ways: They both involve the alignment of sales and marketing, focusing on specific markets, and growing revenue for the company. However, the two are actually very different, not just in how they are done but also in why.
With account based marketing, the three main objectives are to identify high-value accounts, gather information and data on said accounts, and then target those accounts specifically in order to draw more value from them.
With lead generation, the three main objectives are to identify your best customer, gather information and data on said customer, and then target non-customers who look similar to the ideal.
These two approaches are very different and can be employed simultaneously, assuming you have the sales and marketing staff to accommodate both. Small businesses can benefit from both approaches: Going after a select few accounts allows a small business with minimal employees to create immense value despite not having a wide scope. But for small businesses who want to scale, lead generation can help reel in customers in new industries, helping the company grow, at which point it may want to switch its focus to target account marketing.
What both approaches come down to, though, is data – particularly the depth of the data available. Whether you’re mapping out your ideal customer and then finding others who match or you’re trying to better understand a specific customer account so you can identify new sales opportunities, you’re going to benefit from in-depth data and insights. You’ll want to go beyond company name and email and learn everything you can about the customer and the business, such as industry information, any executive changes at the business, direct titles of employees, and multiple forms of contact for them. Depending on your objective, you may need different insights, but the more high-quality data you have, the better either approach will be.
How Small Businesses Can Benefit From ABM
Target account marketing may seem overwhelming, like something a small or medium-sized business couldn’t handle. In truth, all businesses can both employ and benefit from ABM. When equipped with the right tools and services, small and medium-sized businesses can have just as much access to data and insights as a large corporation. Once you have the data, it’s really all about how you use it, and while small businesses may use different tactics than large companies due to a smaller workforce or budget, there’s no size requirement for ABM – properly understood, even your small business can use this marketing approach.
Understanding Target Account Marketing
Leveraging an account based marketing strategy to its full potential can be particularly difficult for small businesses, which may not even know if ABM is appropriate for their company.
If a business’s target market is confined, if its accounts have multiple influencers, if its sales cycles are long and its deals big, account based marketing can prove helpful. Coupling inbound-driven targeted account marketing efforts with traditional strategies can help small businesses generate organic leads within targeted customer segments. Furthermore, to maximize the return on investment of ABM, a company must shape a large part of its marketing around individual customer accounts. From research and business development to online marketing and creative, target account marketing can make the most impact when carefully aligned with the needs of each individual account. Often this starts with aligning marketing efforts with sales data and feedback.
The Importance of Sales and Marketing
To accurately address customers’ needs and effectively use account based marketing, companies must eliminate the innate disconnect between sales and marketing. Traditionally, sales teams focus on accounts and opportunities, while marketing teams focus on segments and solutions. Often this difference in focus results in sales teams and marketing teams working in their own independent silos. Target account marketing aims to eliminate this disconnect.
By using sales and marketing conjunctively, ABM helps deliver the most value to both your customers and your business. This alignment can create a more productive work environment in which sales goals, feedback, and insights help focus marketing efforts on specific customers’ needs. In short, sales can help provide a deeper level of understanding for key accounts, which can enable marketing to improve and personalize its offerings, ultimately creating a more profitable return.
The Different Types of Account Based Marketing
Target account marketing strategies are not one-size fits all and tend to vary from account to account (though you should try to use as much overlapping content as possible to save time and energy). However, there are four standard account based strategies that companies can use to help strengthen key account relationships.
The Large Account strategy is used when a company has a very small number of important accounts, either prospective or existing. The sales team tightly focuses on this handful of accounts, usually enterprise-level, which increases the importance of customization. For example, the Large Account approach can be particularly helpful for government contractors or suppliers who are trying to scale. If a small business contractor or supplier already has a couple of clients and can’t handle any more, the Large Account strategy can help them strengthen relationships with customers and ultimately increase their return on investment from the existing accounts. This approach tends to be difficult to scale, as you will need more resources to serve more accounts.
The Named Account approach is the Large Account strategy on a broader scale and is used when companies have more than a handful of key accounts – anywhere from ten to hundreds. These deals also tend to be large, from enterprise to mid-market. The Named Account strategy can be particularly helpful for small businesses selling a particular product to a list of clients in a specific area. Take an industrial agriculture manufacturer, for example. They might want to narrowly target those industrial farms in California’s Central Valley with the capital and infrastructure necessary to purchase large farm machinery, rather than all farms across the United States. Even though this strategy requires customization, it tends to be more scalable than the Large Account approach.
Industry / Segment
The Industry approach to target account marketing is very similar to the Named Account approach but widens the net further. In both strategies, the sales team is hyper-focused, but in this approach, sales focuses on new or existing accounts in a specific vertical or segment. The Industry approach could be helpful for a retail supplier, for example. If the supplier sold jeans, they would likely want to target retail stores that carry jeans in areas where the demand seems to be high – a broader target than in the Named Account approach. Customization is automated in the early stages of the sales cycle for this approach and becomes more personalized as conversations progress.
Companies use a Customer Lifecycle strategy when they need to reach a moderate or large number of customers using differentiated approaches. The strategy stems from the belief that marketing must cater to different aspects of business in an attempt to support customer relations after purchases. Few companies use this approach, but many experts believe it should be implemented regardless of a company’s target account strategy because it places a large emphasis on customers rather than just prospects.
In this strategy, the most important target market comprises your current customers. Engagement teams can use the customer lifecycle approach as an auxiliary sales strategy. The benefit is that it can connect the buying and customer cycles. The buying cycle emphasizes opportunity goals, such as where growth will come from in target accounts, whereas the customer cycle emphasizes relationships goals, such as ensuring the customer retains value. Rather than accentuate the importance of relationships over opportunity, the customer lifecycle approach attempts to combine the two.
Account Based Marketing and Tech
As technology continues to evolve, so do the methods marketers use to reach target accounts. In fact, technology plays such a vital role in account based marketing that it’s hard to build a strategy without it. Technology can help your team identify which accounts to target and can also help identify the best methods to reach those accounts. Furthermore, technology can help drive personalized web-based content to your target accounts and deliver targeted ads. It can even help identify specific account contacts and help expand on the insights delivered by the sales team. Perhaps most importantly, technology can help target your ABM strategies and make them real-time. There’s an abundance of target account marketing tools that marketers can employ. Here are a few of the most popular types and the percent of account based marketers using them, according to the SiriusDecisions 2015 State of Account Based Marketing Survey:
80% – Salesforce automation / CRM
66% – Marketing automation platform
56% – Account based advertising and re-targeting
45% – Web analytics tools
34% – Social media monitoring
Implementing an Account Based Marketing Strategy
Implementing an account based marketing strategy can seem daunting, especially for a small business or those who’ve never done it before. If you’re new to target account marketing, it can be hard to know where to start, let alone develop an entire strategy. Luckily, thousands of marketers have mastered the art of target account marketing and shared their insights. Here are some tips that can help you develop and implement a strategy.
You Are Not Alone
Before you take any steps to develop a target account strategy, understand that ABM cannot be executed without the help of sales. Therefore, your first step in developing a strategy should be to talk to the sales team and get their buy-in. To do so, you’ll want to position ABM as a strategic contribution to your business growth. You may understand that, given the right insights and focus, target account marketing can be particularly effective at generating business, but your sales team may not be as up to date on strategic marketing strategies as you are. Rather than merely asking the sales team for information on certain accounts, ask them to form a partnership. Target account marketing can be useful for them too – it can give them better information on the accounts and people they care about and ultimately save them time. Forming a relationship with your sales team will help them understand the strategic importance of marketing and improve your offerings to your customers.
Creating a Target Account List
Once you have partnered with sales, it’s time to get to work on your campaigns. Your first order of business should be to create a “target account list” in collaboration with the sales team. To identify high-value accounts, first consider the following:
- High Yield: Identify account characteristics that result in a high ROI.
- Product Fit: Find companies with long-term business needs that match your offering.
- Competitors’ Customers: Companies that use your competitors’ products are likely in need of your solutions (and they’ll be familiar with your product type – a huge plus).
- Strategic Importance: Some target accounts may not produce high yields but may be valuable due to other strategic considerations.
Using these account identification factors, and pulling in sales insights and data, create a list consisting of two groups: accounts with a high propensity to buy and accounts picked by sales reps. You should pick your final target accounts from this combined list.
Setting Goals, Measures, and Metrics
After you’ve vetted potential target accounts, and before you begin creating marketing strategies, consider setting goals for your team and choosing the key analytics you’ll be tracking. Doing so will help you plan and prioritize your account strategies and also help develop criteria for measuring account performance. Setting goals is frequently the most difficult part of forming target account strategies. Account based marketing tends to be a long-term growth strategy, yet marketers often cannot afford to wait months to measure the success of their campaigns. Revenue, a common measure of success, can be especially difficult to track since it can take time to accrue. Even still, marketers often use long-term measurements when assessing the effectiveness of goal setting, which may lead to overpromising on results. To better assess the effectiveness of goal setting, you and your team should consider using short-term measures, which can help quickly demonstrate the impact of your strategy. Megan Heuer, VP & Group Director at SiriusDecisions, has outlined some “quick win” measurements that can help:
- Response rates to marketing from ABM accounts
- Online activity from ABM accounts, number of new contacts in ABM accounts
- Internal stakeholder feedback
- Participation in all marketing activity from ABM accounts
Building a Plan
Once you have partnered with sales, identified target accounts, and established measurements, it’s time to build a campaign. There’s no telling how long it will take to plan any one campaign – time spent formulating strategy can vary based on account understanding and a variety of other factors. It is safe to say, though, that you should budget time to personalize campaigns.
It’s imperative that you design your plan around the needs of your target account. To do so effectively, it is best to have a complete understanding of what business solutions your target account specifically requires. Once you have a comprehensive understanding of its needs, map out and create personalized content to be distributed through online and offline channels. The materials you use should be unique and create a consistent message. It can be a good idea to use a diverse mix of marketing collateral throughout numerous channels to help keep your audience engaged. Remember that you choose your audience – you should therefore target individuals within your target account who can influence the decision-making process.
Implementing a Strategy
After time spent researching and planning, the final step is to implement your campaign. When executing your target account strategy, you should pay close attention to timing and message positioning. Research from Microsoft suggests that web users often visit pages for no more than 20 seconds and read no more than a quarter of the content. Timing and relevance, therefore, play a large role in implementing your strategy.
To fully engage your target users, you’ll want to create targeted and personalized content with strong calls-to-action. Luckily, technology can help. There are many useful tools that can assist you in implementing your account based marketing strategy. Here are a few:
- Marketing Automation: Marketing automation platforms can help keep track of important campaign data and manage target account lists.
- Personalization Tools: Personalization tools help you identify individuals from your target accounts in real time and tailor content accordingly.
- Predictive Scoring Tools: Predictive scoring tools use statistical models to forecast the actions of your target accounts based on past and current activity.
- Ad Technology: Ad technology is often used in conjunction with marketing automation platforms to personalize digital advertising.
- Sales Intelligence: Sales intelligence tools supplement other tools and help provide more in-depth information, which can be used to further tailor your content.
As a small business, you may not have these marketing tools in your current budget, but don’t worry: there are other methods you can use to implement an account based marketing strategy. Working more closely with sales to keep track of data and response rates can be a cheap, if time consuming, alternative to many technology platforms. Cheap personalization methods, such as sending emails from an individual account rather than from an automated system, can also be a cost-effective alternative to some account based marketing technologies.
What Target Account Marketing Can and Can’t Do
It is no secret that target account marketing can benefit your business – 80 percent of marketers that measure ROI claim ABM outperforms other marketing investments. However, account based marketing does not guarantee immediate marketing success. Let’s take a closer look at what it can and can’t do.
Account Based Marketing Can:
- Align account strategies, sales, and marketing activities
- Improve productivity using account insight and focus
- Help connect buying cycles and customer cycles
- Increase the value of marketing and ROI
- Use existing technology to better target and satisfy accounts
Account Based Marketing Can’t:
- Drastically increase the number of sales leads (you will target fewer leads, but they will be of higher quality)
- Automatically change sales and marketing culture/strategy
- Work as well without the use of data analytics
- Help retain accounts outside of your target accounts
Photo Credit: Haru1, Twenty20