Account-based marketing – now known as ABM – is not a new concept. It was first coined by the Information Technology Services Marketing Association (ITSMA) back in 2003. But it is a concept that is entering the mainstream as analysts such as Gartner and Forrester now cover ABM as an emergent category.
However, the challenge with a concept that has been around 17 years is that most marketers’ understanding of ABM is based on outdated thinking and concepts. So it’s time we address these ABM myths head-on, explain why they are myths, and replace them with the truth.
Myth #1: ABM is just for Demand Gen Marketers
Truth #1: ABM is for the C-Suite
Because the M in ABM stands for Marketing most people think ABM is just a topic for Demand Generation Marketers.
But it’s a myth that ABM is a topic just for marketers.
The truth is that it’s a strategic topic worthy of discussion within the C-Suite.
With the emergence of the SaaS business model it’s become normal for marketing and sales expenses to be between 40% and 50% of a company’s revenue.
So for many CEOs, the marketing and sales budget is becoming their biggest expense.
As any CEO will tell you most of the time the tension between Marketing and Sales is palpable. Marketing’s complaint is normally “Sales, why aren’t you following up on the leads we generated for you?”.
Sales’ complaint is normally “Marketing, why do you keep sending me leads for people who won’t buy from us?”. This is because they talk in different languages. Marketing talks about leads or people; Sales talk about accounts or wins.
If the languages don’t connect, how can the teams work together effectively?
So how as a CEO can you make sure that the Marketing and Sales budgets are aligned and pulling in the same direction?
The answer is ABM.
The discipline of ABM forces Marketing and Sales teams to align on the characteristics of accounts that can turn into customers and then focus the Marketing within those Accounts.
If you continue with traditional lead-based marketing it’s like having a rowing crew of 8 with 5 facing forward and 3 facing backward but you’re paying all 8 to row.
ABM will deliver Marketing and Sales alignment and maximize the impact of 40-50% of a company’s expense.
Can you think of a more important topic than this to discuss within the C-Suite?
To jump-start the conversation within the C-suite, I often ask the CEO to conduct a thought experiment.
I ask them to imagine them walking into a room with their head of marketing and a piece of paper and a pen. They hand the paper and pen to the head of marketing and ask them to write down a description of the ideal customer profile for their business in the next 30 seconds. They then leave the room and walk into a second room with their head of sales and a second piece of paper and a pen. They then hand the paper and pen to the head of sales and ask them to write down a description of the ideal customer profile for their business in the next 30 seconds. They then compare the two descriptions.
Do you believe they will match?
If a CEO isn’t confident they will match then that’s a strong indication that there is a lot of inefficiency and wasted money in the marketing and sales budgets.
Myth #2: ABM is just for the enterprise
Truth #2: ABM is for all B2B companies
Because ABM was coined by ITSMA which predominantly serves large enterprises, ABM became synonymous with the practice of Field Marketing.
Field Marketing is focused on marketing “in the field” alongside sales teams at in person events such as trade shows and dinners and corporate boxes at sporting and entertainment venues. Typically only enterprises build out Field Marketing functions which have led to the myth that ABM is just for the enterprise.
The truth is that ABM is for all B2B companies because modern ABM is digital, fast and affordable rather than in person, slow and expensive.
This affordability makes ABM possible for every B2B organization regardless of size or sophistication. It doesn’t matter whether you have 50 employees, 500 employees, 5,000 employees or 50,000 employees you can start to execute an ABM strategy for less than $1,000 a month.
For less than the cost of 250 Starbucks lattes you can use a digital platform that delivers an objective, data-driven identification of high-value accounts for your business.
For less than the cost of 25 daily subscriptions to the New York Times, you can engage the buying committees through their entire buying cycles using highly targeted digital advertising. The real question is not can you afford to do ABM. The real question is can you afford not to do ABM?
Myth #3: ABM is just for your top 50 strategic accounts
Truth #3: ABM is for the 1000+ accounts that matter to your business
The third myth is also a result of the misconception that ABM is just Field Marketing and therefore in person, slow and expensive. This myth is that ABM is just for enterprises marketing to a few large enterprises.
It’s a niche strategy for a few accounts and not a broad strategy for all accounts. This myth is based on the thinking that ABM is in person, slow and expensive and so an organization can only afford to apply it to a few large accounts that will yield very large deals if you win them. But this myth is based on outdated thinking.
Modern ABM is digital, fast and affordable and applicable to the thousands of your accounts that are a fit for your business.
One of the reasons this myth has taken hold is because there is a well-known analogy comparing Lead-Based Marketing and Account-Based Marketing to “Fishing with Nets” and ”Fishing with Spears” respectively.
The “Fishing with Nets” approach represents Lead-Based Marketing.
The broad approach of casting a wide net, catching big fish, small fish, dolphins, sharks, dragging it on board and then throwing 90% of the catch back in the sea because you only wanted tuna.
The “Fishing with Spears” approach represents Account-Based Marketing. The focused approach of only aiming at the tuna you want so you don’t waste time catching things you are only going to throw back.
Unfortunately, this analogy reinforces the myth that ABM is just for a few fish or accounts. The “Fishing with Spears” conjures up an image of a human powered activity that is small scale and slow and only applicable for larger fish such as tuna.
The analogy needs updating from “Fishing with Spears” to “Fishing with Harpoons”. The truth is that modern ABM is applicable to all the thousands of accounts – including the yet to be discovered – that matter to your business.
It doesn’t make sense to take a targeted approach to your top 5% of accounts and then a wasteful inefficient approach to the other 95%.
The truth is you want to apply a targeted “Fishing with Harpoons” approach to 100% of the accounts that could buy from you.
Myth #4: ABM doesn’t scale
Truth #4: ABM scales with high-quality account data and machine learning
The fourth ABM myth is also a result of the misconception that ABM is just Field Marketing and therefore in person, slow and expensive.
An extension of this flawed thinking is that ABM doesn’t scale because it’s human-powered activity. The “Fishing with Nets” versus “Fishing with Spears” analogy reinforces this misconception. When people hear the phrase – “Fishing with Nets” it’s easy to imagine a large ocean going 10,000 horsepower vessel with massive trawling nets operated with mechanized hauling equipment pulling tens of thousands of fish out of the sea. When people hear the phrase “Fishing with Spears” it’s easy to imagine a single person from a nomadic hunter-gatherer society trying to spear a single fish that they can see within 6 feet.
So the fishing analogy needs updating from “Fishing with Spears” to “Fishing with Harpoons”. Additionally, imagine a boat with 10,000 Harpoons and each Harpoon has 3 modern capabilities: a long range sensor, an automatic trigger and automatic reloading. The long range sensor can be programmed to detect any fish of your choosing up to a 10 mile range so now it can reach a much larger volume of water than the fishing net. The automatic trigger is connected to the long range sensor and can automatically fire once it’s sensed the right fish.
The automatic reloading means now rather than having to wait a long time between targeting each fish, we reduce the downtime between trigger pulls. So, for a given period of time we can now catch more fish.
So how do we transition from small scale field marketing – “fishing with spears” – to large scale ABM – “fishing with 10,000 harpoons with long range sensors, automatic triggers and automatic reloading”?
The answer is you need high-quality account data and machine learning.
To continue the harpoon analogy, high quality account data is the long range sensor.
It’s the ability to identify the accounts – or the fish – that are relevant to your business through sensing firmographic, technographic and behavioral data.
To continue the harpoon analogy, machine learning is an automatic trigger and reloading. It’s the ability to apply machine learning to the problems of account scoring – “is this a good fish to target?” – and account suggestions – “you should target this fish”. It’s the ability to apply machine learning to the problems of advertising bidding – “should I pull the trigger given where this fish is swimming?” – and, advertising budgeting “how many times should I keep reloading the harpoon?”.
The truth is that ABM does scale with high quality account data and machine learning.
Myth #5: ABM is an evolution of B2B marketing practices
Truth #5: ABM is a revolution in B2B go-to-market thinking and execution
The dominant approach to B2B marketing in the last decade has been Marketing Automation and Lead Nurturing. In this approach the Marketing team runs marketing programs that generate leads (also known as MQLs or Marketing Qualified Leads) `and then they continue to nurture those leads until they are “sales-ready” as indicated by a lead score which is a measure of engagement activity such as they have visited the website three times in a day including the pricing page. Sales, then, takes the lead but disqualifies the majority of them.
Hence, the name “funnel” since there is a sharp drop off in the transition from marketing to sales. A funnel isn’t desirable, since it means the Marketing budget has been wasted. A better shape would be a champagne flute.
So the common wisdom is that ABM is just an evolution of this established B2B marketing practice but with the account attribute attached to the lead.
But that’s a myth.
ABM is a discontinuity that will result in winners and losers for those that embrace it and those that ignore it. There is a well-known cartoon that has a medieval king in a suit of armor on horseback about to ride into battle with his foot soldiers armed with swords and bow and arrows. There is a salesman who has arrived with guns and the king is saying “I have no time to see a salesman. I have the battle to fight”.
The Marketing Qualified Lead is dead. It’s the sword in the cartoon. It’s the buggy whip.
The truth is ABM is a revolution in B2B go-to-market thinking. This is because the vast majority of a market opportunity for any business is outside of the funnel.
The right place to start in any B2B go-to-market thinking is with the question “which accounts are a fit for my business?” and to develop an objective data-driven description of this fit that marketing and sales both agree on. This fit description includes firmographic and technographic attributes. Then on top of this view of account fit, you need to layer on account intent – “which accounts are showing interest in my category?” – and account engagement “which accounts are engaging with my business?”.
With this account intelligence, you can then focus your marketing budget and engagement activities on accounts that can turn into paying customers. To go back to the rowing crew analogy it’s like having a rowing crew of 8 with all 8 now facing forward and marketing and sales pulling in the same direction.
So the truth is ABM is just not adding the Account attribute to a Lead and then continuing with the Lead Nurturing model. It’s throwing away the concept of a Lead and starting with the concept of an Account. If you want your business to be a winner in the next decade, then start embracing ABM now as the way to drive your go-to-market thinking and execution.