Software Growth

ABM (Account-based marketing)

Account-based marketing focuses sales and marketing effort on a short list of target companies, treating each as its own market instead of chasing leads.

Account-based marketing, or ABM, flips the usual order. Instead of attracting a wide pool of leads and filtering them down, you pick the companies you most want as customers first, then build marketing and sales around winning them. It is a B2B approach, and it suits products with high prices and several people involved in the buying decision.

Wikipedia's summary credits Bev Burgess at the Information Technology Services Marketing Association (ITSMA) with coining the term in 2003, and describes it as focusing resources on a defined set of high-value accounts and treating each as a market of its own.

Lead-based versus account-based

In a lead-based approach, you measure individuals: downloads, MQLs, form fills. In ABM you measure accounts: has anyone at this company visited the site, replied, or joined a call, and how many people are engaged? A company with four engaged people from three departments is a better sign than one person who downloaded five ebooks.

How ABM works in practice

  1. Define the ideal account. Start with your ideal customer profile: industry, size, tools used, a trigger such as a recent hire.
  2. Build the list. Pick 50 to 200 named accounts. The number depends on your deal size.
  3. Map the buyers. Identify the roles involved, such as the user, the budget owner and an executive.
  4. Run coordinated outreach. Personalized emails, LinkedIn, targeted ads, a tailored landing page, a direct mail piece, a short video.
  5. Measure by account. Engagement per account, meetings booked, pipeline created and deals won.

Burgess's framework, as summarized on Wikipedia, has several flavors: strategic ABM for the very top accounts with heavy personalization, segment ABM for clusters with shared traits, and programmatic ABM using automation. The depth of personalization falls as the number of accounts rises.

Does the math work?

Example: you spend $6,000 on a campaign against 100 target accounts, which is $60 per account. If it produces 5 customers at $12,000 annual contract value each, that is $60,000 of new annual revenue and a campaign cost of $1,200 per customer. That works if gross margin and retention are healthy. At a $600 annual deal, the same approach would not.

That is the rule of thumb: ABM pays off when deal size is large enough to justify custom work per account. Christoph Janz's five ways to build a $100M business makes a similar split: at around $10,000 per customer, inside sales on targeted leads works, and at $100,000 and up you need an enterprise field sales force. It is closely tied to outbound sales and often a setup for land and expand, where the first deal in a big company grows over time.

Mistakes

  • A target list that is too long to personalize. If you cannot say something specific to each account, shrink the list.
  • Marketing and sales working from different lists. The point is alignment, and Wikipedia notes sales and marketing alignment as a critical success factor.
  • Judging by leads. ABM output is meetings and pipeline in target accounts.
  • Buying an expensive platform before you have repeatable results by hand.

For small SaaS

You can do ABM with a spreadsheet of 30 companies and a few hours a week. If your price is under a few thousand dollars a year and customers buy on their own, you probably do not need it. Content, SEO and self-serve will serve you better.

Sources

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