Just Don’t Call it ABM
When ‘account based’ works and when it doesn’t.
Of all the topics discussed at Underscore VC’s marketing community dinner, the topic of account based marketing (ABM) drew the highest emotional response from the marketers assembled. ABM is a strategic approach to marketing where companies look at each customer as a ‘market of one’ which results in a very high touch, high intensity process.
“Oh my gosh, if I get one more business development rep calling me…”
“this is just marketing, we have been doing it for years…”
“you know when they are on to you since you just get pummeled…”
“it’s impossible to show any ROI from the ABM advertising networks…”
Having done both enterprise and high velocity marketing, the response was interesting to listen to and confirmed some of my prior positions on the topic. The net of it, ABM works in some cases, but the ABM vendors are trying to apply it to all cases, all the time.
So where does ABM work fit today?
ABM for High-Touch, High Deal Sizes
ABM is something marketers have been doing for years for high touch, high deal size go to market motions. If you have a set list of companies that can buy your products, say 2,000 in the world, and your deal size is more than $500K, the most effective way to get to your target market is a very methodical, directed marketing approach to each company.
I was the VP of Marketing at a storage management software company that was acquired in part by our ability to target and land large enterprise accounts. We used BDRs and a bunch of other techniques to penetrate the Global 2000. At first, we did this somewhat randomly with success, but about a year into it, I realized we were not focused enough. We were getting good inbound inquiries, but what we really should have been doing was focusing the team on 20 accounts per month and literally determining the account status for each target company. Each account was either never going to buy from us since they had a competitor entrenched in the account, might in the future, or there was an opening for our solution. Had we done this highly targeted ABM approach from day one, our construction of the magic database of all target accounts and key contacts would have progressed much faster. Today’s ABM tools could have accelerated that process.
ABM for High Velocity Inbound Models with Low Deal Size
To be honest,I am not sure how this makes sense. I operate one of these models today across six product lines. With low deal size, and massive volume, it is tough to get any kind of an ROI to make ABM work. In fact, putting the next incremental dollar to work almost always pays off more in writing content than it would in a high touch ABM campaign to a single targeted account. Why get one account through ABM when I can get 10 through inbound marketing?
ABM for Strategic Accounts
This is new for me, but ABM does appear to make sense once an organization establishes strategic accounts, even for high velocity models. We are seeing this today at my company. There is a particular tier of accounts where the annual spend with us is now in the six figures. These are larger, Global 2000 accounts. This is spending rolled up from various divisions and departments that have all purchased tools from us, although they may not realize at the corporate level this spending is happening. There is value in trying to connect all the departments together to cross sell other products. In this case, applying an ABM model to our strategic account portfolio appears to make sense and we are currently looking at ABM tools and advertising techniques to help with this limited set of accounts.
Ultimately, ABM has been around for a while, it is nothing new. Based on our dinner conversation, it is obvious that my peer marketing execs all have similar emotional reactions to the idea of ABM and the ubiquitous sell of vendors doesn’t work across the board. There is a fit for ABM, in many different use cases, but the best way to reach marketing teams looking at ABM solutions would probably be to acknowledge that ABM is nothing new and make sure the ABM motion really fits the go-to-market model for the company.