7 Reasons Every B2B Company Needs to Use Account-Based Marketing
June 30, 2021 •Nikole Rose
You’re a B2B marketer. You are looking for the most effective marketing strategies that will propel your company forward.
You have tried various marketing efforts but have heard account-based marketing (ABM) might be something for your business to try.
So here are 7 reasons every B2B company should implement account-based marketing.
1) You Don’t Sell To Everyone
As a B2B company, you likely sell a complex product that serves a specific need for a specific industry or type of business. If you are an enterprise-level software company, you don’t want to attract and sell software to the mom & pop.
Here’s the problem.
There are over 4.5 billion internet users. With an effective search engine optimization and lead generation strategy, you will generate a lot of website traffic and new leads you can nurture through email marketing. Unfortunately, most of the leads you get won’t get you any revenue.
We all know the statistic that only 1% of leads close. Most people look at that statistic and think they need to start getting more people in their pipeline. Account-based marketing looks at the 1% and flips the concept on its head.
Instead of trying to get as many people in the pipeline as possible, account-based marketing cuts out all of the wasted time of qualifying leads and focuses on those you know you want to partner with.
With ABM, you focus your marketing efforts on a list of target accounts, not a target audience. You put your content in front of the decision-makers of the accounts you know you want to work with.
If you aren’t familiar with the concept of a target account list, read our blog How to Create and Use Your Target Account List for Account-Based Marketing.
2) No Guesswork
With most digital marketing approaches, you would create a buyer’s journey based on some data and speculative educated guesses.
It would start with a buyer persona. You run a brand awareness campaign and try to get them on-site with a case study you have developed. The potential customers come to a landing page, and you try to see if you can provide them with enough value that they take the first step into the sales process.
With an ABM strategy, you still create a path for your ideal buyer to go through, but you aren’t looking at a semi-fictional representation of who you want to work with. You take the target account list and create highly engaging content for the accounts you want to work with.
Once you have developed your target account list and have the appropriate technology in place, you can directly start tracking the movements of those target accounts across the digital marketing space to understand their needs and propensity to buy.
You aren’t waiting for your ideal customers to fall into an automated sales funnel so you can nurture them until they buy. You are moving on the offensive to help them overcome their challenges as they show they have a need.
As a result, sales and marketing teams are aligned because sales can start their Monday morning with a list of target accounts that were researching solutions similar to your product over the weekend. Sales then starts calling accounts you know are a good fit for your offer, making the sales conversations far easier and smoother. You’ll have more accounts start entering your pipeline and start to see more revenue come in.
With that said, you need a tech stack that provides visibility between marketing and sales, incorporates intent data, provides the ability to create a target account list based on an ICP, and pulls the appropriate contact information to start conversations with the right people.
To learn what you need to incorporate in your tech stack, read our blog called What Technology is Essential for Effective Account-Based Marketing?
3) Higher Quality Pipeline
Account-based marketing brings high-quality accounts into your pipeline, which allows you to have more deals that close more quickly. Here are a few stats that will help you see how ABM impacts the quality of your pipeline.
- One in five accounts targeted through ABM becomes considered a qualified sales opportunity. (Terminus)
- Organizations with a strong Ideal Customer Profile (ICP) — which is similar to a buyer persona — achieve 68% higher account win rates. (Terminus)
- 86% of marketers report improved win rates with ABM (Terminus)
- 70% increase in the number of opportunities created via ABM (Gartner)
When you have been happy to convert 1% of your leads, simply having 20% become qualified sales opportunities will automatically improve your pipeline quality.
All of these stats seem too good to be true. How could this marketing approach generate such significant results?
The answer is surprisingly simple. Instead of trying to get as much attention as possible and qualifying leads from there, an ABM approach focuses on best-fit accounts from the start. No wasted time (or dollars) on leads that weren’t ever a good fit.
When you focus on working with the customers that actually need your product now and will work well with your business, people in your sales process will buy at a much higher rate than 1%.
4) Larger Deal Sizes
If a higher quality pipeline weren’t good reason enough, additionally ABM provides a larger deal size. B2B companies that implement account-based marketing saw an average increase of 171% in annual contract value (ABM Leadership Alliance).
171% increase in deal size is nothing to scoff at. This marketing approach nearly doubled the size of some company’s average annual contracts. You are maybe wondering how, but again the answer is surprisingly simple.
A main staple of the ABM approach is highly targeted and personalized marketing content. This content speaks directly to the needs of a target account and directly addresses the concerns every decision-maker at an account may experience. With such highly targeted and personalized marketing, you no longer have potential concerns or hesitations to overcome. The marketing and sales process has already overcome those hesitations.
As a result, target accounts sign larger deals because they are bought in and have full confidence that your product will meet their needs and help them solve their problems.
Simply put, by speaking directly to the concerns, needs, and desires of the decision-makers in your target accounts, they trust you. When they trust you, they show their trust with their money.
5) Proven ROI
Everyone knows the saying, “You have to spend money to make money.” This saying is a simple way you need to have a long-term strategy that will consistently generate a return on investment. ABM is that strategy.
87% of account-based marketers say that ABM initiatives outperform other marketing investments. (ITSMA).
Even better, companies that run ABM campaigns experience up to a 208% increase in the revenue contributed by marketing (MarketingProfs).
With 87% of marketers seeing ABM outperform other marketing investments and companies seeing up to a 208% increase in their revenue touches by marketing, the question of why rise to the surface.
Like previously mentioned, you give your money to people and companies you trust. When marketing and sales have provided valuable content that built trust on the front-end, target accounts show their trust with cash. The more they trust your business, the more likely they are to invest in your product more heavily. As a result, you see larger deals.
At some point in your career, you have likely signed onto a minimum level agreement simply to “try out” a product. The marketing and sales process didn’t do enough to build trust, so you’d sign a larger agreement. You had a problem and needed an immediate solution, so you signed at a lower agreement level.
When you don’t build trust with your potential customers during the marketing and sales process, they will only buy the smallest agreement they can to move forward. When you build trust by creating personalized content and a one-to-one relationship with your target accounts, they will purchase larger deals because they trust you to overcome their problem.
Simply put, Trust = Revenue.
6) Increased Customer Lifetime Value
When you have better-fit customers coming in the pipeline, you will see more customers stay with your business.
80% of marketers say ABM improves customer lifetime values. (TOPO)
Why does marketing help improve the lifetime value of the customers?
The two major components of lifetime value are the annual revenue of a customer and the number of years they stay with your company.
As previously mentioned, ABM helps companies secure a larger deal size. By having a larger annual contract, your customers will start to have a higher lifetime value.
When it comes to customer retention, it’s very similar to the concept share among people that flip houses. The profit is made at the purchase.
When you onboard a best-fit customer you can serve for years to come, you will become a pivotal part of their success. An ABM approach focuses on developing and delivering personalized content that directly addresses the problems your target accounts are facing.
When you can position your product as the direct solution to the problems of your target accounts, they will buy. The best place your company can position itself is as the partner that equipped your customers to experience massive success. When your product becomes directly tied to your customers’ success, your customers will stay with you for years to come.
Though this reason is a bit indirect, it can significantly benefit your company’s long-term profitability and growth.
Two of the most commonly cited reasons employees hate their job are a lack of recognition for their work and a lack of purpose associated with their work. Though much of this recognition should come from bosses and coworkers, recognition from your customers also helps boost employee morale.
When your customer encounters a problem that your employees can help them overcome, most of your customers will express gratitude. That gratitude will help to boost your employee’s morale as they start to receive more recognition from both employers and customers.
Additionally, when your employees know they are helping someone else achieve success for their business, they feel more connected to a larger mission and purpose. When your employees can see the tangible ways they are making an impact in the world, they will start to experience a deeper sense of meaning for the job they do.
When your employees are happier and start to experience true meaning from their work, they are significantly less likely to leave your company. You will end up with employees more willing to go the extra mile for your customers. You will save more money on onboarding costs associated with new employees. You will have better customer relationships because your employees will develop deeper relationships with your customers.
Though this impact is indirect, it’s invaluable. When you have the right people in your company working with your best-fit customers, you have a winning recipe proven to dramatically grow your business.
If you want to build out an ABM strategy, you need to start by building your target account list and your ABM leadership team. ABM is a lot of work to implement effectively, but as you have seen, it’s worth the effort. If you’d like a step-by-step guide to implementing ABM, download our ABM How-To Ebook.
Additionally, if you’d like help implementing ABM in your business, please schedule a call today.
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