Account-Based Marketing

Abstract

Account-based marketing (ABM), also known as key account marketing, is a marketing strategy used by a firm to identify and prioritize its list of highest valued customer accounts, known as target accounts). ABM also focuses on a highly efficient integration of the marketing and sales teams and may be used in conjunction with other strategies. Because it is easy to implement, focuses on a relatively narrow account base, and shows a high rate of return, ABM has become one of the hottest trends in marketing.

Overview

Account-based marketing (ABM) is a B2B (business-to-business) marketing strategy that seeks to generate leads for new accounts as well as generate loyalty from firms and individuals within a specific set of firms. Contrary to traditional models of marketing, in which marketing strategies are not as specific or targeted, the ABM approach allows salespeople to personalize their marketing messages and campaigns for specific accounts—usually the high-valued accounts. The method, in other words, allows the creation of very specific campaigns. Because it is geared towards smaller sets, then, AMB is used more frequently for B2B companies. The main advantage of ABM is its efficiency. Marketing experts insist that establishing a personalized relationship with high-value accounts results in a higher return on investment (ROI) for a firm. Because it is relatively simple, both large and small firms can use ABM to target those accounts considered as the most valuable. Experts also argue that companies that use ABM effectively may generate over 200 percent more revenue for the marketing efforts invested in the process. Benefits of ABM include obtaining a higher rate (ROI) on investment for marketing effort; increasing the number and rate of relationships with target accounts (i.e., these contacts will help you obtain others); and improving the value and effectiveness of messages.

ABM results in a shorter sales cycle. The most common form of ABM has six important stages, in particular pertaining to the sales cycle: (1) discovery or identification; (2) awareness or expansion; (3) engagement; (4) sales; (5) advocacy; and (6) measure.

During the stage of discovery, the marketing team identifies which accounts will be their targets, developing a list of those identified as their high-value accounts and narrowing it down. Research is done to determine as much relevant information as possible about the targets: their preferred channels of communication, key actors, and other important factors.

The stage of expansion refers to when marketing activities lead key actors in target accounts to become aware of the brand. It is important to remember that in most large firms, the purchase decision-making is often distributed among many individuals. This stage should help a firm connect with the decision makers.

The engagement stage is usually a campaign—it may be e-mail, social media, visiting a trade fair stand, webinars, or any other connecting activity. In general, it is any action in which the marketing team and/or salesforce connects with the buyer. If all goes well, the sales stage follows engagement.

Advocacy is tightly linked to sales. By developing a personalized relationship and ensuring that the buyer has a positive experience, the customer will, in turn, become an advocate for the firm within his own company. This is of great benefit for any company. For instance, a happy customer will be open to collaborate with the firm in providing glowing testimonials and referrals or leads for other accounts in the future.

In marketing it is always important to be able to measure the results of a method or a campaign. Some users find measuring the ABM method unreliable or difficult; however, there are many different strategies and technologies available for this, including account engagement, sales, generation of new leads, and clicks-through-e-mail. Finally, in order to work seamlessly and obtain the best results, ABM relies strongly on integrated marketing and salesforce teams, known in ABM as “smarketing.”

Applications

Inbound cycle, a method that combines non-intrusive marketing techniques and advertising, is often presented as an alternative to ABM, even though it is closely related to ABM and may, in fact, function in complementary ways. Inbound cycle is aimed at contacting the client from the beginning of the sales process and accompanying him or her throughout the whole process till the end. Usually, as a client begins a purchase action, the salesforce is in contact with the client and follows him or her through all the steps of the process in a helpful and considerate manner. By this, the firm will not only gain the clients’ trust and fidelity, but also, be able to gather as much pertinent information as possible about the accounts’ needs and preferences. Inbound marketing methods have many advantages that complement well the goals of ABM, such as increasing the number of qualified leads and the number of website visits.

One of the most important actions for a B2B firm is gathering leads. Leads are a very important resource for the salesforce, but they are also important to build a database. ABM depends greatly upon the databases it builds—or purchases to build upon—and, given the narrow field of potential new accounts in B2B, a firm’s database is an asset of great value. Sometimes there are several different databases, for different types of clients or accounts. A firm may, for example, maintain different tiers of target accounts and separate lists according to different characteristics and priorities.

One main objective shared by both inbound marketing and ABM is gathering new leads and information for a database. There are many ways of managing this, such as generating traffic—that is, attracting visits—to company websites and social media pages, or creating events and resources that engage users and persuade them to share contact information and information about their usage and preferences.

Once a firm has built its database, its marketing and sales (“smarketing”) teams brainstorm the best ways in which to contact their target accounts to engage. One of the most popular ways of doing this is through content that positions the firm as an expert in the field, and a helpful one at that. A pharmaceutical company, for example, may share some of its health research information openly with clients, potential clients, and even the public at large.

The story of Toshiba and the 309 leads it generated with a single e-mail is a well-known case study. In 2014, Toshiba sent an e-mail to all recipients from their client stores database. In it, Toshiba itemized the top 25 most successful in-store actions accomplished by the largest retailers worldwide. Their e-mail provided a great deal of useful information, including an e-book, infographics, case studies, and guidelines. This massive e-mail got 19,000 openings and over 1,100 clicks, and generated 309 leads. The average click-through of an e-mail tends to be about 3 percent, and Toshiba reached around 5 percent. This case study of success shows not only the effectiveness of digital technology and a well-planned message, but also how difficult it is to propitiate engagement and gather leads in the B2B field.

It is important to highlight, however, that Toshiba’s case is considered a success story; at the end of the day, it generated many more leads than it would have, had it not sent its famous e-mail. In general, the span that a company may cover by engaging in ABM is wider and more effective than conventional methods, according to most modern marketing experts. It also serves the purpose, in a collateral way, of achieving what conventional methods do, that is, making the firm or its brand more visible and attaching a series of positive meanings to it (also known as branding). All of these contribute to increasing the value and presence of a firm in the eyes of its customer base and target accounts.

Discourse

Marketing and sales are directly related and should always work together. It is through this relationship that both fields become integrated and where innovation occurs: The creation of new strategies and products and the adoption of new technologies and systems meant for firms to interact successfully with their customers.

When speaking of the relationship of a marketing department with their customers, people tend to think of retail sales—that is, selling products and services in small amounts directly to the consumer (also known as B2C). However, one of the most profitable and vital arenas of marketing and sales occurs in B2B, that is, in the business-to-business market. All firms that sell goods to other firms to be processed, consumed or distributed by the latter are engaging in B2B commerce. In B2B, the market is much smaller than in B2C, and it follows that the possibility of finding new clients is narrower than in retail. Segmenting the market for marketing purposes, one of the most effective marketing methods to date, is also difficult, because the demographics for businesses are not as open as for the general public. Moreover, B2B sales transactions tend to be of higher value or volume (or both) for a much smaller client base.

For these reasons, then, the value of each sales transaction is greater and securing the fidelity of a client—developing a loyal long-term business relationship—becomes of paramount importance. Therefore, because much depends upon finding and securing new accounts, and maintaining those clients, great effort is expended on innovative marketing techniques.

Despite the constant search for innovations, the B2B marketing field continues to be somewhat traditional in many aspects and dependent on conventional and proven methods, such as trade fairs and conventions, direct sales, and Internet-based marketing such as e-mail, websites, and social media and search engine advertising. All of these, however, require great investment in effort or funds (or both), and yet tend to be very generalized and impersonal. As with any one-size-fits-all system, however, it is a somewhat scattershot system and many opportunities may be missed in the process.

Many argue that the differences between B2B and B2C marketing are not significant. They posit that the applications discussed in the previous section can also be applied to other types of business and markets, such as retail. This is possible as long as the final objective is to create a great product, place the client and client satisfaction at the center of the company’s activities, and create the proper conditions for the development of a wider market, account fidelity, and repeat sales.

Nevertheless, the B2B model usually requires greater marketing efforts. It is necessary to invest more, yet sales are less frequent—although for greater value and import than in B2C models. Moreover, B2B and B2C are often complementary and part of the same business. If a firm sells to another business, which in turn sells to its final consumers, it behooves the seller firm to do all things possible so that their buyer can, in turn, keep their own customers happy. This may require an even greater investment of time, effort, and more budgetary allocation for the seller firm. As the Toshiba case illustrates, the firm used an outreach strategy aimed at positioning the firm as friendly experts with their B2B clients. The content of Toshiba’s communication focused on helping their target accounts raise their sales, that is, act more effectively with their own customers. Finally, because ABM depends greatly on outreach to gather information, they need to invest in technology and systems that help them generate data for their databases, as well as invest in the resources necessary to maintain their databases and keep target account profiles up-to-date and growing.

Some firms consider that it is very difficult to determine the extent to which their ABM is successful. Measuring whether their target accounts are aware of them and what they think about them compared with other options in the market seems a costly and complex endeavor. For instance, most firms acknowledge the importance of raising awareness of their services and products, as well as engaging key actors in the companies they target. But they are unsure about how to measure if their ABM strategy is being successful at it.

Establishing a system of measuring whether ABM is working as planned is important. Website visits are one form of measuring it and there are easy-to-use systems—some free or relatively inexpensive—to measure if website hits are arriving from an e-mail communication or some other site. Other ways are more conventional, and those include personal interactions. Firms may establish protocol lists or guidelines that ask if key actors within target accounts are interacting with the content sent them. Or if they are interacting with the salesforce. In the end, however, as many experts state, the true and final measure of the effectiveness of a marketing campaign is sales and fidelity. In fact, since most ABM is aimed at a specific and relatively narrow group of accounts, it is usually not too onerous to keep tabs on their rate of response and engagement.

Some experts advocate for a guideline of objectives or goals in order to be more effective. The following is one of the most common: (1) set goals (i.e., how many new leads and/or customers to reach for the year); (2) organize and align roles in the marketing and sales teams; (3) identify high-value target accounts; (4) identify key actors within the target companies (i.e., those in charge of purchasing decisions); (5) create a database and keep it up-to-date; (6) create content that is attractive and relevant to the recipients; (7) create an outbound marketing strategy; and (8) analyze and evaluate the data, making improvements when necessary.

According to some marketing and communications experts, the future of ABM is intelligent technology. New technology that can determine pertinent keywords can help marketers find what other firms are searching for. These may be complementary strategies, since keyword searches may also help marketers to identify those trade shows of interest to their target accounts or the types of trade publications they may be interested in, and to shape campaigns, advertising, and public relations in ways that seem most attractive to their prospective buyers.

As with any other marketing strategy, it is important to bear in mind that it is not companies who buy from other companies, but people within those companies. Conventional strategies, such as visiting clients and target accounts at trade fairs and shows for face-to-face interaction continue to be very effective strategies and, at the same time, relatively easy to implement in conjunction with ABM and other cutting-edge techniques.

Terms & Concepts

Account-Based Marketing (ABM): Also known as key account marketing; a business-to-business strategy that targets accounts narrowly within a given market.

B2B: A shortened version in business jargon of business-to-business firms.

B2C: A shortened version in business jargon of business-to-consumer firms.

Data: Factual information, such as amounts, numbers, statistics, and other specific types of information.

Inbound Cycle: A type of non-invasive marketing that attracts customers or potential customers to approach the brand.

Key Actors: In the social sciences, it refers to an important or crucial participant in an organization.

Target Account: In ABM, it is the high-value accounts or those that are considered as the best fit. Usually these are listed in order of priority.

Bibliography

Burgess, B. (2016). Driving B2B growth with account-based marketing. Market Leader, (Q1), 45–47. Retrieved January 1, 2019 from EBSCO Online Database Business Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=bsu&AN=112236780&site=ehost-live

Compton, J. (2016). The magic of account-based marketing. Direct Marketing News, 38(1), 22–25. Retrieved January 1, 2019 from EBSCO Online Database Business Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=bsu&AN=112869646&site=ehost-live

Corselli, A. (2015). Account-based marketing gets results. Direct Marketing News, 37(9), 10. Retrieved January 1, 2019 from EBSCO Online Database Business Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=bsu&AN=110856425&site=ehost-live

Hahn, J., & McDonald, C. (Eds.). (2018). Account-based recommenders in open discovery environments. Digital Library Perspectives, 34(1), 70–76.

Harrigan, W. J., & Lamport Commons, M. (2015). Replacing Maslow’s needs hierarchy with an account based on stage and value. Behavioral Development Bulletin, 20(1), 24–31.

Jepsen-Lozano, L. (2010). Deloitte: Are you ready for account-based marketing? Velocity, 12(2), 41–50. Retrieved January 1, 2019 from EBSCO Online Database Business Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=bsu&AN=50915338&site=ehost-live

Needle, D. (2017). Salesforce to help sales reps with Einstein account-based marketing. EWeek, 1. Retrieved January 1, 2019 from EBSCO Online Database Business Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=bsu&AN=123517407&site=ehost-live

Reinbach, A. (2013). Account-based marketing. Mergers & Acquisitions: The Dealermaker’s Journal, 48(7), 18. Retrieved January 1, 2019 from EBSCO Online Database Business Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=bsu&AN=88255670&site=ehost-live

Tantry, S. (2016). Making personalized marketing work. Harvard Business Review Digital Articles, 2–4. Retrieved January 1, 2019 from EBSCO Online Database Business Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=bsu&AN=118685908&site=ehost-live

Uram, M., & Raphaelson, J. (2011). The how of account-based marketing. Velocity, 13(3/4), 40–44. Retrieved January 1, 2019 from EBSCO Online Database Business Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=bsu&AN=66684198&site=ehost-live

Suggested Reading

Del Rowe, S. (2017). Account-based marketing: ABM is often misunderstood, so marketers need to develop a clear definition of the practice before deciding whether it’s right for them. CRM Magazine, 21(7), 34–37. Retrieved January 1, 2019 from EBSCO Online Database Business Source Ultimate.

Rogers, B. (2017). Chris Golec Grows Demandbase B2B Account-Based Marketing Platform. Forbes.Com, 1. Retrieved January 1, 2019 from EBSCO Online Database Business Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=bsu&AN=123569216&site=ehost-live

Singh, S., & Khalid, U. (2017). Follow this 4-step checklist for account-based marketing success. Gulf Marketing Review, 2. Retrieved January 1, 2019 from EBSCO Online Database Business Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=bsu&AN=122650842&site=ehost-live