While this is only a primer on Account-Based Marketing, it’s important stuff, and I really think you need to at least familiarize yourself with it.
Why? Account-Based Marketing—commonly referred to as ABM—might do some great things for you. Or not. It depends on how you apply it.
In its simplest form, ABM is marketing to the decision-making group within a defined set of companies. It can be applied to upselling current customers, acquiring new customers, or—at the extreme level—acquiring a single customer.
The basic components of ABM consist of:
- List development and validation (both companies and contacts)
- Workflow planning and cadence
- Content development and implementation
- Monitoring and management
At Red House, we’ve been executing ABM programs in various forms for over a decade. We call it “narrowcasting,” and it works amazingly well. You’ll notice a lot of companies moving to ABM perhaps because it’s “the next big thing,” but before you join them, proceed with caution. ABM isn’t a quick fix.
LIST DEVELOPMENT: The Foundation for Success
Many companies are capable of selling to many different-size businesses. Be sure to look at your customer base closely; I recommend a regression analysis of all your products across all your customers to ensure a clear understanding of your most profitable client-organizations’ character traits. You may find that you have several areas of selling strength. For example, your customers might fall into two or three clusters, each with differing business characteristics.
Once you’ve identified your clusters, you can determine the practical application of ABM for these businesses.
If you happen to sell exceptionally well to the mid-market of your vertical (say, a vertical consisting of 5,000 companies), you can then run the list of mid-market prospects against your cluster characteristics and narrow the marketable list to those you happen to sell to very well—and profit highly from. You should end up with a manageable amount, say 750 to 1,000 prospects. But you probably want to narrowcast the top 100-200 prospects and reach the rest more broadly (via a hybrid ABM model).
From Marketing Monthly to Marketing-on-the-Fly
Whenever we deploy a narrowcast program for a client, it’s typically targeted to 50–200 companies. Why such a small number? Because its very difficult to pull off the detail required to be highly effective if the number of accounts is too large to manage at a personal level—and by personal, I mean you. Conversely, if the count is too small, your cost to acquire may be too great.
My rule of thumb is simple: If I can’t review every detail of each account’s behavior personally, and do it in less than a few hours, I have too many prospects
Do it Right and You Can Expect Big Things
A financial solutions client asked us to help them sell a product to 45 banks. You can’t get narrower than that! The program produced a +/- 48 percent response rate among decision makers. Each decision-capable contact within the base of 45 was identified and custom marketed resulting in a net list of roughly 160 contacts. Throughout its lifecycle (75 days), I was able to monitor all actions and activities (outbound and inbound/online and offline) as a 45-minute review each morning to ensure we didn’t need any course corrections. It’s crucial that you’re set up to be nimble enough to change course and respond to the actions of the ABM prospects.
It was highly successful (as others have been) because we didn’t take our eyes off the program—until it ended. It’s crucial because of the number of actions and interactions that can, and do, occur throughout a program of this nature and that requires responsive planning and activity.
This type of program is easier to execute today because we can pre-populate workflows, engage trigger emails through automation, and access potential lead lists more quickly. As an added bonus, it can be a little less expensive because we don’t need many people to execute effectively. But those that are involved must be committed.
NEXT: You Can’t Manage What You Can’t Measure
In the next issue, we’ll address program monitoring in more depth. In the meantime, if you’re interested in applying ABM methodologies to your current marketing organization, give us a call.
Dan Hansen is a Senior Partner with Red House and a 30-year veteran of the marketing industry. In addition to holding a master’s degree in advertising from Syracuse University, he works in a marketing consulting capacity with Red House clients such as McKesson, Elsevier, Equifax, and AT&T.