Sharing research, insights, trends and advice to help you keep up with the latest in ABM
Hello everyone,
Welcome to The ABM-er. This month, I’m looking at how to design the right ABM strategy for your business, drawing on the fourth chapter in my book, Account-Based Marketing: The definitive handbook for B2B marketers.
In this edition, we’ll look at the importance of your business context when deciding whether to do ABM, and which type or types of ABM to use. We’ll hear what Andrew Fitzgerald, VP Global ABM for Kyndryl, thinks are the main factors you should take into account when developing your strategy. A key step in building your strategy is prioritising the accounts that warrant ABM and deciding how many you can cover, so I’ll share an approach I typically use with our clients to bring more data and objectivity into the process.
You can find more insights to help you on Inflexion Group’s Resources page, here: http://bit.ly/46O5UNB
I hope you find this month’s edition valuable. Do let me know if you have any comments or questions.
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Many thanks,
Bev.
How your business context shapes your ABM strategy
When developing an Account-Based Marketing strategy, understanding your business context is crucial for selecting the right approach. Six fundamental factors will shape which type or types are most appropriate for your organisation.
- The type of business you are in. You’ll need fundamentally different ABM approaches depending on whether you work in professional services or a product company, for example. In the former, you’ll be operating in a partnership structure, building trusted advisor relationships through experienced client relationship partners who know their clients intimately and already know where they can add most value. A more focused 1:1 approach – Scenario ABM – may work best here. However, if you’re in a software company with quota-driven account teams, you may find they’re more receptive to both Strategic ABM, that helps them understand top customers, and scaled approaches that drive sales performance.
- B2B within B2C companies. If you work for a company that started as a consumer-focused business, you may face unique challenges adapting your strong consumer brand for B2B markets. You’ll probably find that your company allocates limited resources to B2B marketing compared to consumer divisions, creating immediate pressure to scale your ABM initiatives. In this context, choose Segment or Programmatic ABM over resource-intensive Strategic approaches, as they give you broader reach with constrained budgets.
- Size of deal. You need to match your ABM investment to deal value. If your average deal sizes are in the tens of thousands, you should avoid Strategic ABM, since the typical $40,000+ annual investment per account will be unaffordable. However, if your customers spend hundreds of thousands or millions annually, they’ll expect the sophisticated, highly customised engagement that only Strategic ABM can deliver effectively.
- Go-to-market model. If you’re working in a professional services network of member firms, you’ll need to align across geographical boundaries and capability areas to engage global accounts. If you’re in product companies, watch out for siloed ABM programmes across different business units. In all contexts, consider partner ecosystems and whether to apply ABM to help you sell with, through and to key partners.
- Business maturity. During early business growth phases, most companies focus on volume-based customer acquisition through Segment or Programmatic ABM. Once you’re more established and the 80/20 rule clarifies your top accounts, a more Strategic ABM approach could be relevant.
- Business culture. Your culture will profoundly influence ABM adoption success. If you’re in a company with traditional high-volume lead generation cultures or a strong quarterly results focus, you’ll struggle with Strategic ABM’s longer-term nature. Start with Segment or Programmatic ABM to help with the transition and prove ABM’s value before progressing to more resource-intensive approaches.
Understanding these contextual factors will help you ensure your ABM strategy aligns with your the realities of your business, maximising both adoption success and business impact.
Perspectives from Andrew Fitzgerald, VP Global ABM, Kyndryl
Do you think ABM is appropriate for every B2B business?
I think it comes down to a few important questions. First of all, what is your business trying to achieve? Forget about marketing for the moment. What is your overall business strategy? How complex is the business? Are you providing services? Solutions? Products?
For example, over the past few years at Kyndryl, employing ABM has made obvious sense because our goal has been to get back to profitable growth by focusing on our most important accounts, which we measure in the hundreds rather than the thousands. We know who our most important customers are. That helps us prioritise and figure out how marketing can make a difference to the business by helping to grow those customers. We accompany that one-to-one perspective with some one-to-few to achieve scale.
On the other hand, if your goal is to acquire thousands of new customers and your business is primarily product-centric, then a one-to-many ABM approach is probably the answer, although I always feel a bit conflicted about the idea of one-to-many ABM, which seems more like traditional demand generation marketing.
Having said all that, I do believe that the principles of ABM should underlie whatever you are trying to do because they are about understanding your customer. ABM focuses your mind. You are thinking about who your most important customers are, how to prioritise and segment those accounts, and treating each one as a market in its own right.
How should marketers decide which type of ABM is right for their business?
As I’ve already mentioned, you need to look carefully at the nature of what you do as a business. How complex is it? How many customers do you engage with? How many are you looking to acquire to achieve your business goals? If you are in a high-value, complex B2B services business like ours, then one-to-one ABM makes absolute sense.
Then there is one-to-few. In many ways, I think that this can be the most challenging. Whether dealing with a single account or a cluster of ten, an in-depth understanding of your customer is indispensable. There is no substitute for that deep understanding. Having said that, it does become a convenient way to think about scaling up. You can’t just continue adding people as you scale up the number of accounts you cover, so you have to try and figure out an effective one-to-few approach.
Additionally, it’s important to consider what your sales teams value and the support they require. When I first started hearing people talk about ABM, I didn’t quite get it, because where I was working at the time, sales teams were doing a lot of this already. They didn’t see the need for marketers to step in to help them understand their customers better or to craft the right value propositions. That marketing and sales gap can mean that ABM gets a mixed reception. There is also the question about budget and budget availability. Are you going to have a separate ABM budget? What we do is harness the marketing budgets we already have and make them work in an ABM or customer-first context.
To some extent decisions like these depend on your culture. I have come across companies that decide to ‘do’ ABM simply because they see their competitors doing it, rather than because it aligns with their own business strategy.
How do you know when you have got the right blend of ABM types in your programme?
I’m not sure you ever know. In my experience, there is an ongoing tension between what I will call traditional marketing, or a one-to-many approach, and ABM. At one extreme, there is the drive to go wide and help as many people as possible in your target universe understand why they should buy from you. That view is still very prevalent both among marketers and the stakeholders of marketing. And at the other end of the spectrum, ABM advocates for a deep dive into a select few accounts, aiming to understand them really well and maximize the value in them. There will always be a push and pull between those two sides.
The right blend will depend on the specifics of your organisation — your people, the value you can create, the mindset of your business leaders, and so on. Interestingly, I do see more people at the top of organisations asking, “what is our ABM strategy?” That is a big shift.
I’m not sure you ever know when you have the right blend and I suspect that the moment you stop having that debate you are in the wrong place, because that tension is very healthy. It’s essential to keep adjusting as circumstances change.
Using data-driven account prioritisation to align teams
In all but the newest organisations, you need to start your prioritisation process by understanding your version of the fractal 80/20 rule. This foundation helps you prioritise the accounts that are and will be most significant for your business in the years ahead and determine which ones deserve ABM investment.
Often, different teams within companies maintain their own lists of top accounts. You can overcome this challenge by facilitating a joint prioritisation process based on data and with criteria agreed by everyone. As a marketer, I think you have a unique opportunity to lead this data-driven prioritisation and resourcing discussion across your organisation.
Build a decision support tool
You need to create an objective, data-led account prioritisation model that assesses both an account’s attractiveness to you and your business strength relative to competitors in an account. Start by deciding on your selection criteria and get agreement across the business on the relative importance or each criterion. Establish a scoring model for each one and identify objective data sources to make the exercise as rigorous as possible.
Consider factors like account size or spend in your category, growth potential, strategic importance, and profitability when scoring attractiveness. For business strength, evaluate your market share, relationship quality, competitive position, and delivery capability. You can enhance this process with AI to make it faster, more accurate, and easily updatable.
Foster cross-functional discussions
Use your scoring results and the natural tiers of accounts that emerge to engage peers across marketing, sales, and customer success in discussions about which accounts or tiers warrant different levels of investment, including types of ABM.
Remember that different ABM types have different coverage models. You can work full-time on one to three accounts with Strategic ABM, create lighter plans for up to five accounts with Scenario ABM, manage around five segments of ten accounts each, or scale across 500 accounts with Programmatic ABM.
Assess ABM readiness
Before finalising your investment decisions, you need to evaluate the readiness of each account for ABM. Create a checklist that considers elements like the willingness of the account director to collaborate, data availability, and the quality of existing account plans. This readiness assessment helps you decide where you’ll actually invest your time and money most effectively.
Build your blended strategy
Most successful ABM programmes use a blended approach. Tier one accounts typically receive Strategic ABM, tier two accounts get Scenario or Segment ABM, tier three uses more Programmatic ABM, and your bottom tier receives either Programmatic ABM or other types of marketing.
By aligning your ABM investment with how other functions allocate resources across account tiers, you create a unified approach that maximises your programme’s impact and business results.