...and what's the difference between Person-Based Targeting, Account-Based Targeting, and Account-Based Marketing (and Sales)?
Account Based Marketing or ABM is a B2B marketing strategy in which marketing and sales teams use personalized campaigns and programs to target key accounts within their organization’s Ideal Customer Profile or ICP.
As B2B purchases are always executed over long periods of time by groups of typically 7-20 people rather than by single individuals, a focus on the group- or account-level (and not the individual-level) is crucial.
That's why ABM can't be applied to B2C marketing, which is catered to individual end-consumers with shorter and far less convoluted buying journeys. In B2C, you don’t have buyer groups. You only have individual consumers.
According to Demandbase, ABM is no longer a pilot concept for many; It’s an accepted and completely adopted approach.
A recent LinkedIn survey found that 87% of marketers who measured ROI said ABM outperforms all other marketing investments.
SiriusDecisions has reported that 91% of marketers that use ABM achieve a larger deal size, with 25% stating it being over 50% larger - whilst 30% of marketers recorded an increase of over 100% in engagement with their C-level targets.
Aside from defining what ABM is, it’s also important to distinguish what ABM is not.
ABM is not a catch-all strategy; you can’t apply it to everything. It’s also not a replacement for traditional demand generation.
But now, you might be asking... What's the difference?
Demand Generation (driving awareness and interest for your products/services) is today often seen as “traditional marketing”. Similar terms include Lead Generation or Person-Based Targeting (identifying and nurturing potential individual buyers).
Whether you call it ‘Demand Gen’, ‘Lead Gen’, or ‘Person-Based Targeting’, the process is pretty much one and the same:
First, Marketing tries to collect as many leads as possible. All these leads then go through some kind of qualification process before Marketing hands over all the ‘good’ ones to Sales. And at this point, Sales is now in charge of further qualifying leads, identifying opportunities, and ultimately closing deals.
Account-Based Targeting (not to be mistaken for Account-Based Marketing, but we’ll get to that shortly) is an evolved sub-category of “traditional” Demand Generation. The process here is very similar to that of its person-based counterpart but is, as the name reveals, based on targeting accounts rather than persons.
*Click the photo to zoom.
Account-Based Marketing is something different entirely. It turns the traditional Demand Gen approach on its head.
While traditional Demand Gen starts out by capturing as many leads as possible even if most of those leads would never turn into paying customers, ABM populates the pipeline with the best quality accounts from the absolute beginning. ABM focuses on quality over quantity, depth over breadth.
With traditional Demand Gen, the divide between Marketing and Sales is clearly divided (Marketing starts > handover > Sales ends).
With ABM, Marketing and Sales are equally involved from the very beginning; they decide on which accounts to target together. It should really be called Account-Based Marketing and Sales, but for familiarity’s sake, we’ll stick to “ABM” for the rest of this document.
People often refer to a flipping the traditional sales funnel when they talk about ABM. This is metaphor to describe a process that offers an alternative to a funnel driven approach.
We inherited the thinking from the consumer marketing space where the concept was modelled in frameworks with names like AIDA, DAGMAR etc.
In short it’s an approach that dictates you to create lots of content, generate awareness of your service or product to a large audience and capture leads; then try to move prospects through engagement stages, losing some along the way, and hopefully, finally moving them to the bottom of the funnel, to make a purchase.
According to marketing research firm Forrester Decisions this funnel driven approach results into a situation where fewer than one percent of all leads turn into customers. Or, put more boldly, 99% of what businesses are doing is not working.
FROM PERSON TO BUYING GROUP
Instead, ABM starts by identifying specific, high quality account that match an agreed Ideal Customer Profile (ICP).
The task is then to develop a detailed understanding of the buyer-committee, its situation, problems and the opportunities for your business – as well as knowledge of each of the key contacts who make or influence the decision to buy, or can stall or even block it.
The marketer’s goal is to define clearly delineated and agreed upon stages in the marketing and sales process which is now treated as one and the same.
This new holistic process starts at targeting and engaging with the entire buying group, then helps overcoming the individual buyer's status quo, evolves into designing the solution for the different stakeholders, and eventually to get customer's signature.
Afterwards the need for further client retention strategies to maximize your return across the entire customer life cycle should not be forgotten either.
REPLACING LEAD WITH OPPORTUNITY
Each stage involves progressively qualifying the opportunity and nurturing the key contacts in the buyer organisation, based on information that is systematically elicited through research and dialogue – by phone, meetings and digital channels.
A prime benefit of the ABM approach is that it results in more focus on ‘best-fit’ buyers; and therefore less wasted time, fewer lost opportunities and high return on marketing ROI, Return On Investment.
A game changer is intent data that allows your organisation to understand who of your target accounts are ‘in market’.
The new strategy is especially valuable in the current business landscape, that is increasingly becoming more complex as well as global and where the needs of buyer organisations have invariably changed.
The larger the accounts and or the higher up you’re aiming in the organizational food chain, the more vendors will be competing for the buying committee’s attention.
This requires both relevance and hyper personalization towards the individual members of the buying committee, whilst understanding the dynamic of whom in the committee is at play at what moment in the journey.
of the average annual contract value for account-based deals was 33% higher on average than for non-ABM deals.*
of companies say they track conversion rate by journey stage (learn more about buyer journeys for B2B orgs here). This could be due to lack of ABM awareness and/or sophisticated enough ABM tech.*
*2021 ABM Benchmark Study by DemandBase and RevOps
When the buying committee and volume are small or otherwise limited, it doesn't make sense to invest in expensive sales resources, especially not so early in the buyer's journey. ABM is just too costly to justify for smaller purchases with shorter sales cycles. In such cases, traditional Demand Gen is what typically works best.
On the other hand, for prospects that are "too big to sleep on", which usually mean bigger companies with bigger budgets, then you need to make sure you're up to par. You need to deliver incredibly personalised content across both digital and human touch points --at scale. That's where ABM comes in. This is why in very complex and lucrative markets (e.g., when you're selling a new concept that most people don't yet understand), ABM is worth the extra spend.
However, true ABM doesn't only require more money. It also requires organisational change. Traditional mindsets and processes that isolate Sales and Marketing from each other simply won't do. Sales and Marketing need to work together from the beginning and throughout, or else it's not ABM.
CRITERIA
PERSON-BASED TARGETING
ACCOUNT-BASED TARGETING
ACCOUNT-BASED MARKETING (AND SALES)
Handover
Yes
No
Who/What Gets Qualified
Persons/Leads
Accounts
Typical Target Company Size
Small
Medium
Large
Length and Complexity of Sales Cycle
Usually a smaller, less complex purchase w/ shorter sales cycle.
Usually a larger and complex purchase w/ longer sales cycle.
Usually a large and complex purchase w/ longer sales cycle.
No. of Buyers Involved
1-2 buying centres with few members
Multiple buying centres with multiple members
Applicable to B2B/B2C
B2C, B2B
B2B only
