Account-based marketing (ABM) is a big deal. It seems as though it’s being mentioned on every webinar, at every marketing conference, and in all major marketing strategy discussions. But despite all of the hype surrounding account-based marketing, only 43% of people polled have a clear understanding of the benefits of ABM.
So, what is account-based marketing? At its most basic, it’s a strategy that makes an account (rather than an individual lead) the focus of marketing and sales efforts. ABM marketing efforts rely on data analysis to pinpoint the correct accounts to target; leverages research to find the correct cadre of contacts inside an account; and uses targeted, personalized, timed communications to engage those contacts.
While the buzz is great, and we personally think that ABM is a fantastic strategy for scalable growth, there seems to be an overabundance of information about ABM floating around. So much information, in fact, that marketers aren’t able to fully digest the principles and benefits of an account-based marketing strategy. To help cut through the ABM noise, we’ve compiled a list of the 10 biggest benefits of using account-based marketing.
ABM Benefit #1: Account-Based Marketing Helps to Loop in All Decision Makers
On average, every purchase now requires 5.4 people to formally sign off on. This means that involving all parties from the very beginning is crucial. Every time an additional person is added to the decision-making team, your sales cycle lengthens. (Imagine everyone is ready to sign, and then a VP joins the buying team and you have to begin at the beginning with that person.) When you target an account, rather than an individual, you’re able to close deals more quickly by addressing all decision-makers from the beginning of the buyer’s journey.
ABM Benefit #2: ABM = Increased ROI
It’s no secret that one of the benefits of account-based marketing is its incredible return on investment. In fact, 80% of marketers who measure ROI say that ABM initiatives outperform other marketing investments. And what’s more, 60% of those who have used ABM for at least a year report a revenue increase of at least 10%, and 19% report a revenue impact of 30% or greater.
At the end of the day, marketers not only want to see organizational growth, but they want to be able to demonstrate real value from their efforts. ABM not only benefits companies by allowing them to generate more revenue, but it also ties marketing directly to closed deals and revenue. In fact, companies using ABM generate 200% more revenue for their marketing efforts.
ABM Benefit #3: ABM = Increased Contract Value
Getting customers in the door is great, but it’s not the be-all, end-all. A customer who signs a one-year, $10,000 contract, and costs $1,000 to acquire gives you a $9,000 gross return. But spending $1,000 for a customer who signs an $8,000/year, 5-year contract will yield much higher returns.
Using ABM marketing tactics has proven to significantly increase deal sizes by focusing on customers who are most likely to be successful with your product or service, which in turn means they’re more likely to remain your customer. In fact, the contract value for ABM-targeted accounts increases an average of 40% for mid-market accounts and 35% for enterprise. Those numbers can easily result in immense growth for your organization, without spending more money on acquisition.
ABM Benefits #4: ABM Is Quickly Gaining Steam
ABM is much more than just a buzzword, it’s being implemented by some of the largest and fastest-growing organizations in the world. Over 52% of companies say they currently have ABM pilot programs in place, and 83% of ABM testers have plans to increase their usage over the next year.
In the past, account-based marketing was a tedious, time consuming, manual process. It was really a solution only for organizations that had abundant resources and the stability to test new marketing strategies. Today, the basic process remains much the same, but account-based marketing software has changed the labor equation, making ABM practical for any company that already uses marketing technology well. If you’re regularly using marketing automation and a CRM, you already have the tools and technology you need to get started with an ABM strategy. While large companies are currently the heaviest users of ABM, small companies are the most aggressive testers.
While lead generation is imperative to a business, the next step in getting your leads to convert into paying customers is encouraging leads to engage with your brand. Solid lead engagement requires knowledge about your buyer, an understanding of their needs and wants, and a marketing strategy that plays to that knowledge. The personalization aspect of an ABM strategy allows you to speak directly to your prospects with a tailored message, increasing the likelihood of a positive response.
Customer retention is another incredibly important metric for success. We’ve all heard the saying, “it’s much easier to retain an existing customer than it is to acquire a new one” – and it’s true. According to Invesp, acquiring a new customer is five times as expensive as retaining an existing customer.
Research shows that 84% of companies believe that ABM provides significant benefits for retaining and expanding current client relationships. New customer acquisition is expensive, and if not done right, can lead to high churn rates (“sloppy growth”). Instead, investing in keeping your customers will deliver a steady stream of reliable revenue.
ABM Benefit #8: ABM Improves Consistency
On average, a B2B customer will use 6 interaction channels (e.g. ads, email, phone, etc.), and 65% are frustrated by the inconsistency of the experience. ABM can help by providing a consistent experience across all channels of communication to each person in a targeted account. As Jake Sorfoman of Gartner notes in this blog post, In Customer Experience, Consistency is the New Delight: “Consistency is often compromised when good intentions work at cross purposes.” Account-based marketing benefits you by keeping everyone’s purposes lined up and moving forward.
ABM Benefit #9: ABM Helps With Departmental Alignment
Most organizations struggle with sales and marketing alignment. However, according to one study, organizations with tightly aligned sales and marketing functions experience 36% higher customer retention rates and 38% higher sales win rates. In a recent survey, 91% of those with an ABM program in place said that they were “tightly” or “somewhat or moderately” aligned with sales. This is no coincidence. Account-based marketing helps organizations improve communications between departments by focusing on common goals, values, and metrics, such as defining the ideal customer profile.
A successful account-based marketing strategy delivers high-quality leads to sales by targeting accounts that have already been prequalified and deemed to be a good fit. ABM focuses on quality, rather than quantity, allowing sales to spend less time qualifying leads and more time selling – to companies who are likelier to buy, and likelier to become excellent customers.
ABM Benefit #10: ABM and Marketing Automation Go Hand-in-Hand
Along with capturing data and putting it to work, marketing automation lets you create a process and then set it to repeat at scale, without additional labor. The top benefits that marketers see from combining marketing automation with an account-based marketing strategy are:
Effectively linking buyer behaviors and data across contacts for a unified account view
Automatically scoring accounts and triggering campaigns and workflows inside and outside of the inbox
Precisely targeting all decision-makers within an account and delivering a unified experience across the organization
With the right strategy and the right technology to carry it out, ABM will support your marketing efforts in all aspects as you balance your strategy among brand awareness, demand generation, and customer retention and expansion.