Just the other day, somebody said to me, “ABM has become a cliché.” I agreed but then noted that while it may be a cliché, I regularly discuss the topic and will continue to do so. Simply because a topic has become a bit over discussed, doesn’t mean that it isn’t important. Account Based Marketing is relevant for a number of reasons including its ability to assist with sales and marketing alignment, its focus on the Ideal Customer Profile (ICP), and the simple logic of placing your bets on the accounts and prospects with the greatest likelihood of driving revenue.
If you’ve missed out on the ABM discussion, the premise of Account Based Marketing is self-evident: Define who are your best customers, identify companies with similar attributes, then dedicate your sales and marketing resources towards selling into optimal prospects and selling more deeply into optimal accounts. ABM is based upon strategic focus in sales and marketing.
When asked why he robbed banks, Willie Sutton supposedly said, “Because that’s where the money is.” This logic holds for ABM as well. Go where the money is.
In truth, ABM is not a new concept. Research has long shown that satisfying your best customers is much more profitable then selling into new accounts. It is easier to expand your footprint at current accounts than find new ones. It is also easier to renew an account than to sell it the first time (assuming you deliver strong ROI and not empty promises). So, while companies have long worked to retain their best accounts, they lacked deep insights into account profitability and did a poor job of cloning their best customers. That’s because until recently, there wasn’t technology to go beyond simple peer searching or competitor lists.
The customer cloning approach was crude because the available tools were crude. To employ another aphorism, Maslow’s hammer states, “I suppose it is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail.” We can only work with the tools we have available to us and, until recently, there weren’t dedicated tools for identifying your ideal customer profile.
Thus, without the ability to define your ICP, there was little reason to broadly adopt ABM beyond named account reps. Instead, firms focused on demand generation and content marketing. These strategies follow a different logic – If we don’t have a great handle on who is a good prospect, let’s generate a great deal of lead activity and then look for behaviour that indicates interest. Marketing poured vast resources into this demand gen strategy and was greeted with a shrug by sales reps who quickly ignored the Marketing Qualified Leads (MQLs) that were passed to them. A high percentage of the MQLs which reached sales weren’t sales qualified. That sales and marketing couldn’t agree on what constituted a qualified lead (and that demand gen funnels had separate marketing and sales qualified lead statistics to begin with) should have been a red flag that the process was inefficient.
Or as Jack Lemmon complained in Glengarry Glen Ross, “The leads are weak.”
Traditionally, cloning was done with a back of the envelope approach – We have a lot of customers in industry X, so let’s find more large companies in industry X. While reasonable, the approach isn’t that far from the drunk looking for his keys underneath the streetlight. The search is limited to visibility and there were no tools that could regularly enrich your account profiles, much less analyse them for a deeper set of firmographics, technographics, and business signals.
But your best customers may not be defined by simple variables such as SIC, revenues, and location. While these variables are reasonable (just as looking for keys where you can see is reasonable), they are quite limiting in their scope and result. Perhaps your best prospects can be defined by recent events such as the hiring of a new CMO or the implementation of a new CRM. Maybe your best prospects are expanding overseas, recently posted significant turnover growth, or expanded to new locations. Conceivably there are rich veins of mid-sized companies in fragmented industries where you have a strong value proposition but which you have never targeted. Unfortunately, traditional prospecting left sales and marketing blind to these opportunities. When all you have is a streetlight, you are going to focus on the area which is illuminated.
Fortunately, sales and marketing technology vendors such as Sparklane are now offering analytics tools for identifying your ideal customer profiles across a broad set of company attributes tied to a lead score. This approach opens up a rich vein of hidden prospects that were previously ignored. Furthermore, by identifying these additional attributes, sales and marketing have a better idea of how to message to these prospects, and sales reps are less likely to dismiss marketing generated leads if they understand why the lead was marketing qualified. Furthermore, by assigning a score to leads, sales reps have a better idea of where to focus their time and energy.
Profiling services not only identify your best prospects, but also can evaluate new markets by extrapolating the Ideal Customer Profile into new territories or industries. Likewise, new leads can be evaluated and scored. For example, leads from a trade show or a webinar can be assessed to determine which prospects are likely dead ends, which should be nurtured, and which should be immediately forwarded to sales reps as qualified opportunities. In this instance, the ICP offers the secondary benefit of providing an early gauge as to the value of a marketing event.
So, let’s get better at employing Willie Sutton’s logic and put aside Maslow’s hammer. Marketers can now enrich their MAP and CRM with accurate firmographic intelligence, score leads using the ICP, and then manage lead decisioning and routing. There is no reason that leads should continue to be weak.