Redefining ABM: What It Isn’t and What It Needs to Be
Disclaimer: I’m not here to bash account-based marketing.
ABM is a proven way to connect with your target accounts in a personalized way. Most B2B companies should be doing ABM.
Yet IMHO, the pendulum has swung too far to an all account-based mentality at the expense of proven demand gen activities.
But before I delve into ABM’s overuse, I need to address an elephant in the room.
Is there an agreed-upon definition of ABM? You’ll get 10 different answers if you ask 10 different marketers.
This may sound cynical, but I blame software vendors for “ABM” being ill-defined.
For the past 15-plus years, we’ve simply let ABM vendors define the ABM category. And guess how they defined it? Based on what their technologies could do.
It didn’t start with ABM as a strategy first, followed by defining the technology — it was the other way around. And they did such a good job at it that marketers and analysts alike just bought into it.
You can see this when you look at the inclusion criteria for a Forrester or Gartner report on ABM Platforms — it reads like a Demandbase features list.
When “ABM platforms” showed up 10 years ago from Demandbase, Terminus, and others ABM was accepted as a “technology.”
Not an approach or a strategy, but a quick-fix, silver bullet “tech platform.”
B2B companies went all-in on ABM without understanding if they had the sales-marketing alignment and budget to run ABM campaigns and actually make them work.
Not surprisingly, ABM platforms never did fix B2B marketing.
Why? Because ABM is NOT A TECHNOLOGY.
But more on that later.
In this post, I’ll set the record straight on what ABM isn’t…and then define what it is and how you can integrate it into your marketing strategy.
To start, here’s what ABM isn’t….
ABM isn’t…B2B
In the real world, ABM is just one piece of a B2B marketing strategy. But it’s not the entire thing. You’ve heard things like “ABM is B2B” — it’s not.
Intuitive marketers blend ABM with demand gen tactics such as direct response and performance marketing. They leverage a double-funnel approach, figuring out the right balance between ABM and demand gen.
This way, you’re not leaving any part of your market untouched — you leverage ABM programs for your top accounts and pair that with demand capture activities for 2nd-3rd tier accounts who are in-market.
B2B is all about balance.
ABM isn’t…for everyone
Not every B2B company needs to leverage ABM as a strategy.
For example, if your ASP is less than $50k/year — you may not need ABM (probably still a good idea, but you could grow with just demand capture).
There are other reasons as well, for example:
1. Your business model is based on free trials and micro-transactions
If you sell to individuals within a company and rely on free trials and monthly payments, you’ll be almost all demand capture. Most of your business is from 25 individuals doing $10 per month deals. You don’t need ABM.
2. You’re strapped for resources
ABM is expensive. If you don’t have the budget and people yet for content creation, personalization, direct mail efforts, and proper communication with the sales team, you’ll put out shoddy, poorly coordinated ABM.
No one can agree on what ABM actually means. It’s thrown out as a “quick fix” instead of doing the work to develop a real strategy. ABM personalization is usually the same as Hi {{first.name}} as personalization. It’s not personalization.
ABM isn’t…running display ads
Display advertising has been the primary activation channel for ABM. But this is a flawed approach, for a few reasons:
1. Display ads broadly target a whole account
When you’re spending ad dollars, you need to be sure they’re only getting in front of the relevant people within an organization. Display ads have limited ability to target specific job titles — they just blanket the entire company based on IP address and other factors.
Why display to everyone at a company when ABM depends on targeting small, specific groups?
2. Display ads aren’t very performative
Display is historically good at driving website traffic, but most of these visitors are not qualified and your ads are not relevant to them. Is it the company’s office manager or the CMO? And then if they click, their engagement on your website is low.
This is why it usually takes several additional retargeting touches before you get a conversion. At the same time, you can get close enough to a display-level cost-per-click in paid social, if your ads and offers are good enough — especially when you consider the fewer touches and higher engagement you get.
3. ABM platforms love display ads because they take a cut
Hmmmm, so why would ABM platforms push for display ads?
Because they charge a percent of the ad spend.
Meanwhile, their core metrics are impressions and engagement, which are misleading because revenue is never tracked. You’re basically stopping at “cost per impression” or maybe “cost per click”, which today’s B2B marketers understand is just not good enough.
ABM vendors have created this movement around account-based efforts. Period. In reality, shouldn’t we have been going after our target accounts all along? Riddle me that. ABM was a motion set in place by vendors, and proper execution unfortunately was never prioritized.
ABM isn’t…a technology
Smart B2B marketers don’t depend on watered-down, all-in-one tech. They understand the gaps and strengths of their go-to-market approach and plug in point technologies.
For instance:
- You know your TAM is small, so you need a technology for targeting.
- You’re exploring new ad formats and messaging, so you need a tech platform for experimentation.
- You’re struggling to optimize to revenue so you need an analytics platform to improve closed loop feedback.
Because ABM isn’t a technology, it also shouldn’t be a category line item in a budget.
Spend on ABM should spread across supporting techs like those mentioned above. Additionally, companies should only spend money on technologies they need for a competitive advantage.
What ABM is…and where it fits into marketing plans
ABM is something you do, not something you buy. You can do ABM without an “ABM platform”. You still need technologies to run ABM, but every company’s GTM strategy is unique to them and the technologies will vary.
The resources you’ll need for ABM vs. demand generation will depend on your business model and customer base.
Here are two companies at opposite ends of the ABM spectrum.
Example 1: Loom
Loom is a product-led growth company that provides video messaging, relies on small ($10) monthly payments from individual people in a company.
Ninety percent of Loom’s marketing goes to demand gen tactics to get people to sign up for a free trial and then convert them when the trial ends. Loom may still have a few white whale enterprise accounts that require ABM drips. But that’ll likely be only 10% of its budget.
Example 2: Zendrive
Zendrive sells mapping/routing data and software to major mobile carriers. Zendrive’s TAM is small, but all the potential customers are huge companies with about five internal buyers to market to.
Each Zendrive deal is roughly $5M. Therefore, ALL their activity is ABM because they’ll spend $75K in marketing to get one opportunity from one company.
Those are two extreme cases.
Most companies are in the middle where an ABM/demand gen hybrid is the right approach.
It takes experimentation and a deep understanding of your resources, product, and TAM to strike the right balance and do ABM.
But you’ll come away with a versatile plan that merges ABM (account engagement) with demand gen (direct activation) to get your message in front of the right people and generate more revenue.
