What Kinds of Businesses Should Use Account-Based Marketing?
April 15, 2021 •Mason Cosby
As you have searched for the most effective marketing strategies to propel your company’s growth, you have inevitably come across a marketing strategy called account-based marketing (ABM).
You have probably seen ABM generates a higher ROI, larger deal sizes, longer customer retention, and closes deals faster. These facts are fantastic when they become true for your business.
The question then becomes, “Will account-based marketing work for me?”
Account-based marketing works incredibly well when the business meets some specific criteria. Below are some criteria you will need to consider before implementing an account-based marketing strategy.
The Quick ABM Checklist
We get it. You’re busy. You just need to know if ABM will work for you.
ABM will work for you if:
- You sell products or services to other businesses (B2B Companies).
- You have an ongoing business relationship with your customers.
- You solve a specific problem for an industry, a company role, or a stage of business growth.
- You have larger deal sizes ($25,000+).
- You have a longer sales cycle (2 Weeks at least).
If you’re interested in learning more about “the why,” keep reading. If you’re ready to get started, schedule a call.
ABM Works for B2B Companies
This marketing approach exclusively works in the B2B space by the nature of how account-based marketing works. An ABM strategy focuses on creating one-to-one marketing campaigns designed to attract, engage, and close a targeted account.
This approach would not work well in the business-to-consumer space because of a few reasons.
- It would come across as creepy- If you create one-to-one campaigns regarding someone’s personal life, they are likely to be more concerned about their information security. People concerned about their security don’t typically turn into customers.
- The ROI isn’t there- Most B2C offers are typically less expensive than B2B offers. It’s far more challenging to see the return on investment of hyper-personalized marketing when your products’ purchase price is typically less than $200 instead of $50,000 annually.
- The sales cycle isn’t long enough- For most marketing and salespeople in the B2C space, there isn’t enough time in the buyer’s journey to create effective one-to-one marketing. People’s most expensive purchases are their homes or vehicles. After a single visit to a dealership, most people purchase a car, meaning most B2C companies don’t have a long enough sales cycle to make ABM work effectively.
With all this in mind, we highly recommend creating an inbound marketing approach if you are in the B2C space. You can engage more customers by educating them on information regarding your industry.
When you educate your customers, you shape their thoughts and build trust. You can equip them to ask the right questions, know their options, and eventually buy from the company they trust (that’s you!).
ABM Works For Companies with an Ongoing Customer Relationship
If people buy your product or service a single time, ABM probably isn’t a good fit for your business. After spending time building a relationship with your customers, you want the relationship to continue.
ABM typically works best for companies with more of a partnership agreement with customers and less of a transactional relationship. If your customers view you as a trusted partner for running their business, ABM will work for you.
An ongoing customer relationship doesn’t have to mean a formal agreement between parties (though that certainly doesn’t hurt). Your products and services simply need to have the potential to turn into an ongoing relationship.
For example, the average plumber wouldn’t be able to implement account-based marketing effectively. But if a plumber created a routine maintenance and on-call service to office buildings on a monthly subscription fee, account-based marketing would become a viable marketing strategy.
The plumber would just need target office buildings with at least five floors, offer this service to 25 buildings, and collect his income. At a flat fee of $2,000 a month, this plumber has started to generate $600,000 in secured annual revenue.
Look at your offer. If it doesn’t already lend itself to creating a long-term customer relationship, how can you repackage your offer to build a long-term relationship? You will end up making more money, and your customers will greatly appreciate you for permanently eliminating a problem they face.
ABM Works For Companies Solving a Specific Problem
People only buy products and services because they need help solving their problems. That’s why account-based marketing works incredibly well for companies that excel at solving specific problems for their target customers.
When looking at the problems you potentially solve, most problems fall into one of three categories.
- Industry-Specific Problems- Every industry has specific problems only relevant to its specific industry. If you have created a product or service that eliminates specific problems to an entire industry, lead with the most significant pain point you solve for the industry.
An example would be software specifically designed to meet the needs of a specific industry.
- Role-Specific Problems- If you offer a product or service designed to solve the needs of a specific internal role for a company, show how you eliminate the issue. By leading with how you solve that pain point to their specific problems, you can easily identify for them the value you bring.
Many marketers struggle with a lack of internal resources to execute compelling marketing. A marketing agency partner can help alleviate that pain point.
- Business-Growth Problems- As every company grows, they often encounter similar issues. They don’t know how to scale, delegate, onboard new employees, and the list goes on. If you offer a unique and innovative solution to meet the needs of businesses as they grow, you can provide specific value relating to their current stage of growth.
Many companies don’t have the bandwidth to headhunt and do all of the initial interviewing to find top talent. Headhunter services can partner with rapidly growing companies to ensure they have candidates lined up to match the constantly evolving needs of the company.
If you solve a specific problem for an industry, a role, or a growth stage, lead with the problem you solve. When you can clearly illustrate how your company can eliminate a pain point for your target customer, they will start to look for the dotted line.
ABM Works For Companies with Larger Deal Sizes
For account-based marketing to work, there needs to be a high return on investment.
You will not receive any return if you dedicate 20 hours to creating a campaign to sell a single $20 product. If you are selling a $20, you need a high volume of customers coming through, which is why we recommend inbound marketing.
With B2B deals, you are looking at far more expensive deals. For example, over 63% of all SaaS deals were more than $10,000 annually in 2019. Especially in the SaaS space, if you treat a customer well, they will stay with you for years.
These more significant deals also mean your target customers are likely in conversation with numerous companies, which will offer them the best value. When you create marketing specific to how you can benefit their company, you eliminate the guesswork they may have regarding which option is the best.
While your competition focuses on themselves, you have shown your target customer you understand what they want and how you can help them achieve it.
Important Note: If you are in the B2B space but don’t have a large deal size, you may want to consider how you can repackage your offer to create a larger deal size. With the plumber example, the average plumber costs somewhere between $50 and $200 an hour. Based on repackaging his service as a monthly subscription, the plumber can fairly and reasonably create a more significant deal size. The same is probably also possible for your current offer with some creative help.
ABM Works For Companies with Longer Sales Cycles
Account-based marketing takes some additional work. Creating a specific and hyper-personalized approach to each target account isn’t something you can set and forget.
This additional effort required means account-based marketing will work significantly better when you have a bit of a longer sales cycle. A crucial piece to effective ABM is building trust through relationships. If the sales cycle only takes a few days from research to purchase, there won’t be enough time to build trust with the potential customer.
One pain point many companies with a longer sales cycle experience is simply the length of time you spend engaging prospects before they are willing to buy. One of the significant benefits of ABM is that you do speed up the process.
With an effective ABM strategy in place, the specific marketing you have created for each target outlines how your solution matches their outlined needs. As a result of eliminating the prospect’s guesswork, they are typically more interested and sign significantly more quickly.
After reading through these criteria, you should have a good idea if account-based marketing will work for you. If you have decided to move forward with ABM, the first step is to identify your target accounts.
Once you have identified those accounts, you can start creating hyper-targeted marketing campaigns to attract, engage, and convert your target account into long-term customers.
Account-based marketing is a complete shift in the way you do business. ABM requires marketing to shift focus from generating leads and for sales to shift focus from trying just to close deals.
Everyone shifts their focus to serving the potential customer incredibly well at every stage of their buyer’s journey. Once this shift takes place, revenue becomes an unavoidable byproduct. If you’d like to see this shift take place in your organization but aren’t sure how to get started, feel free to schedule a call today. We will partner with you to bring an ABM mindset to your organization so you can begin seeing bigger deals close faster.
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