Legendary money-manager Peter Lynch was fond of sharing his favorite indicator of whether the stock market was overvalued, undervalued or properly valued. He called it the “party test.” Here’s how it worked:
When he would go to a party and answered someone’s questions about what he does by telling them that he was the money manager for the Fidelity Magellan fund, their response was the indicator:
- It they responded with a bit of dread and walked away from him, he knew he wasn’t very popular and that was a great indication that the stock market was undervalued and it was a good time to buy.
- If they responded with interest and asked a question like, “So, what do you recommend buying?” He knew the market was probably properly valued and there were clearly some good opportunities to buy, but caution was needed.
- When they responded along the lines of, “Wow, that’s really cool. You know what stocks you should be looking at…” When people started recommending stocks to him, he knew the market was overvalued and it was time to sell.
I can’t help but feel this way when it comes to Account Based Marketing. It feels like everyone is talking about it (even though I realize most people still haven’t heard of it or know what it means). With so much noise and confusion, I thought I’d share some observations to create clarity for those trying to learn about it and those considering whether they should pursue the strategy.
What Is It
ITSMA (Information Technology Services Marketing Association) is credited with coining the term Account Based Marketing (ABM) in 2004. Here is their definition: “Treating individual accounts as a market in their own right.” A structured approach to developing and implementing highly-customized marketing campaigns to markets of one, i.e., accounts, partners and prospects. This approach involves marketing and sales taking a close look at key business issues facing the target, mapping them to individuals, and tailoring campaigns to address those issues.
Since then, many people (some for legitimate reasons and some not) have jumped on the bandwagon. People are talking about “flipping the funnel,” “inventing new ways to generate demand” and other nonsense.
For the record, at Imagine we’re very big fans of the ABM strategy. We implement a style of it ourselves, and support it for our clients. However, Account Based Marketing (the strategy) is not right for everyone, and it’s not where you should start.
In a future post, I’ll share tactics and actions to make ABM work. Today, I want to highlight five important points that should determine whether it’s something you should consider for your growth strategy.
1. Account Based Marketing Is Not New
ITSMA coined the term, they didn’t invent anything. I was talking with a prospect last week who wanted to know if they should switch to an “account based” approach. I responded that their approach already was account based. If you're in B2B sales, you’re account based.
Account based marketing and selling is quickly becoming the sales advisory equivalent to what “branding” is for marketing firms. An end, that people like turning into a means so that they can make it really complicated, make it sound sexy and sell you a bunch of stuff at really high fees.
2. ABM Isn’t For Everyone, and It Isn’t Where You Should Start
The question isn’t are you going to focus on accounts, but are you going to treat individual accounts as a market in their own right? Capital letter Account Based Marketing (ABM) is different from small letter account based marketing (I know, it’s really confusing, which is what most SaaS and advisory firms want it to be). Think of the capital letter version as implementing a defined strategy, and the small letter version as the normal tactics you take in B2B sales.
Three criteria are important to make the strategy viable:
- ABM makes sense when you’re selling to enterprise companies, or using an older term, “whales.” Additionally, it requires a finite set of targets or you can’t effectively implement the strategy.
- ABM requires significant investment of time and capabilities (and that means money). The value of the sale must be big enough to justify the investment.
- ABM works when your core demand generation/sales efforts are, at least, good. ABM is a good to great strategy. If you haven’t demonstrated product/market and message/market fit, and/or you don’t have a defined and proven sales process, implementing ABM will waste a lot of money, and you’ll blow the sale with some of your highest value opportunities available to you (you won’t get another chance to make a first impression)
3. ABM Requires Strong Alignment Between Sales & Marketing
Account Based Marketing requires that your sales, sales development and marketing teams work in lockstep with each other. ABM often integrates specific marketing campaigns, with personalized web experiences, retargeting campaigns, specific sales outreach and the focus on multiple contact points. If your sales team is still complaining that they don’t like marketing sending emails to people in their pipeline, then it’s a pretty good bet that you’re not ready for ABM. If you haven’t maintained an effective service level agreement between sales and marketing, you’re probably not ready.
And that’s okay. Build a solid foundation, get your demand generation engine fired up and then step into Account Based Marketing (if it turns out you even need it).
4. ABM Doesn’t Eliminate The Need for Content, Inbound Marketing or Any Other Demand Generation Effort
The thing I hate most about how people are talking about Account Based Marketing is that they’re making it sound like a magic pill. Claims like “Reinvent Demand Generation,” or titles like “Account Based Marketing Means The End of Inbound,” do nobody any favors.
I got into a debate with an ABM radical who was telling me that content marketing was for dinosaurs (okay I’m exaggerating, but only a little bit). I asked him how his ABM strategy was going to get the attention of the people that mattered without creating great content that delivered a strong teaching point-of-view? He, of course, had no answer.
ABM doesn’t eliminate the need for your other demand generation assets; it relies on them. If you don’t have content, and haven’t built a strong funnel, then ABM will not work for you.
5. There Is No One Way to “Do” ABM
Account Based Marketing has many variations. Remember, if you’re in B2B sales, you’re already implementing it in some form. The goal should never be to “implement it the right way” (there is no “right” way); instead the goal is and always should be solving for the customer.
You want to attract the attention of the right people, in the right way to move them forward to a defined sales process where you can create value, help and if it make sense for both parties, provide your products and services in a manner that is profitable for you and valuable for them.
Yeah, I know that’s a mouthful, but boiled down it’s very simple - solve for the customer. When considering whether to implement ABM and, if you do, how to best implement, keep your focus on that, and you’ll virtually eliminate the likelihood of failure and waste.