Can account-based marketing save B-to-B customer acquisitions? Demandbase’s CEO shares how ABM can unite sales and marketing with bleeding-edge tech to optimize online lead gen efforts. Here's what you need to know.
It’s an old refrain: Sales departments don’t feel they get enough good leads from marketing departments. And those complaints aren't without warrant. A 2014 study by the Aberdeen Group found, on average, that less than 10% of marketing qualified leads become closed-won deals. If lead-scoring martech isn’t infallible but technology is the key to scale, where is the marketer to turn for a solution?
In the B-to-B arena, account-based marketing (ABM) could be the answer. Chris Golec founded Demandbase, an ABM enablement technology company, in 2006 with the goal to dramatically change the way B-to-B organizations do business by using network IP mapping to help marketers reach the full panel of stakeholders at prospective client businesses. He’s been talking up the benefits of ABM for years but says the method is finally just catching fire.
Q: Demandbase describes ABM as a practice that marketers have been employing for years, but it also involves cutting edge-technology. Define ABM and describe how it incorporates time-tested methodology and bleeding-edge tech to optimize customer acquisition.
A: Account-based marketing is really about focusing your marketing dollars and efforts on the companies or businesses that best align to your company or the accounts your sales team wants to sell to. Most of the marketing tech developed over the years has been based on consumer marketing, which is really volume-based—more leads, more traffic, more clicks. And account-based marketing really flips that on its head and says, “Those leads might be interesting if they’re the accounts my sales team wants to sell to.”
ABM is really lining up marketing and sales so their efforts and investments are all focused on the top accounts, and the measurements of success are now: "Did I attract the right company to my website? Did I engage them? And did we turn it into sales activity?" Companies that have kicked this off start talking about increased close rates and higher pipeline for their target accounts, not [marketing-qualified leads] or click-through rates or website visitors. It really brings the two organizations together.
Q: Would you liken these new KPIs to the evolution of social marketing where marketers understand likes and follows aren’t as meaningful as they once were?
A: All marketing is better when you know who you’re talking to. In the digital world, a lot of consumer marketing is based on income, gender and age. In the B-to-B world, it’s all about size of a company (its revenue), industry, and whether it’s an existing customer. So ABM takes a whole different approach to identity, and the identity of the account has been the missing link. In the world of social, you can have 20,000 followers, but are they the accounts you want to sell to? In most cases they’re not. In B-to-B, most people are only targeting two to three percent of the available business out there.
Q: How does ABM complement the modern buyer’s journey (in which the customer seeks out the business and shows up already very educated)?
A: If you have a very static website where one size fits all, you basically have a 20% chance that customers will get to the right content. Through ABM and a personalized experience on the website, you can take them to the deeper level content right from the very beginning. With ABM, you can also now serve ads across the Web at scale, just to your target accounts (called account-based advertising), so you can connect the message on the Web [ad] to what’s on your website, and it’s all done without cookies, so you can have a rich experience whether you’re on a mobile device or an iPad or in the office.
Q: Talk more about why ABM works so well for B-to-B sales and marketing teams.
A: There are three big problems we're solving. No.1: Most of the traffic coming to your website is not from companies who will ever buy anything. It’s usually shocking when we show people the makeup of their Web traffic. Usually only 10-12% are companies with potential to buy anything (they fall into their target audience). When someone tells me they only sell to Fortune 1,000 companies, we show them their Web traffic and it will likely show that only eight percent of the Fortune 1,000 even know about them by virtue of the fact that they’re not even coming to their site. The second problem is when the right accounts do come to your site, they don’t see the relevant content for their size of company or their industry, and they leave in less than five seconds. We typically see an 80% bounce rate for companies before they [employ ABM]. And the third problem is that a lot of B-to-B marketers wait for someone to download the whitepaper before they reach out to a salesperson. That only happens two percent of the time, so they’re missing out on a lot of engagement that’s happening on the website but they’re not able to turn that into sales activity very quickly. So it’s all about attracting the right accounts, engaging those accounts and turning that into sales activity very quickly. ABM is measuring your effectiveness at those three legs of the stool.
Q: Is there a threshold on the size of business that ABM is optimal for?
A: I think for anyone who is selling to businesses, ABM can now be done at much greater scale. It’s been done for years and years, but a lot of it has been done in the analog world. Now, I can target 10 accounts or thousands of accounts at scale with the same level of effort. In bigger companies, 90% of revenue comes from existing customers, so the strategy is marketing and selling to your existing customers more effectively. An example would be Adobe. They have 30 million visits to their website every month. They have 1,700 strategic accounts that make up a huge portion of their revenue. But they’re one percent of their Web traffic. Normally, you wouldn’t change your website for one percent, however, because it makes up a huge portion of their revenue, they’re figuring out how to use tech to personalize the website when one of these 1,700 named accounts comes to the site. And it doesn’t have to be for each individual company. It could be for different industries.
Q: If you have a business focused on acquiring clients, is the creative and content management to support ABM as scalable as the technology?
A: Personalization [for target accounts] can be as simple as changing a single word on the website so that it maps to the industry of the person visiting. You don’t have to create a whole new website. Just by saying “Learn about our solutions for large banks,” if it’s a large bank coming in, you will double or triple the amount of people clicking through to engage on that website. We see it night and day, whether it’s a small company or large business personalizing to the industry. You can get huge engagement lift.
One of the challenges [of marketing ABM to businesses] is that one of the first perceptions people have is that they have to create all new content, a whole new Web strategy and process. And that’s not it at all. You need to walk before you run, and starting small is always way more effective. Often companies will have all the existing content, they’re just requiring you to navigate their website to get to it. Why not bring that forward if you have it already? We know a large law firm is visiting before that page even loads, so why not bring that content forward or bring them right to the page that’s relevant to them?
Q: Why is there still reluctance to adopt ABM?
A: We’ve been evangelizing this for years. A lot of the early tech and innovation has been around consumer marketing and B-to-B is usually a little bit behind when comes to tech innovation. We saw this is the ‘90s when the big hype on the Internet was all about consumer marketing and shopping carts and online books, and right behind it came a huge wave of B-to-B. The same thing is happening now. [Tech vendors] are chasing the B-to-B sector because they’re realizing the amount of dollars and transactions that happen between companies is way bigger. I think it’s true for any kind of new tech, that you go through this crossing the chasm wave. This notion of using network IP addresses to identify companies and the ability to do real-time ad bidding at scale, one impression at a time, and now the ability to do that for accounts was not possible until just two years ago. The advent of the cloud making these things easier to integrate through APIs has made it a lot easier.
Q: What’s next for ABM?
A: The future will be about how to have measurements of success and CRM data all interoperate in a much more automated way. A few years ago we had a lot of the high-tech companies adopting ABM, but we’ve seen a massive shift in the last 12-18 months across many different industries. We got the early adopters on board, but now we’re seeing large banks, manufacturers, and big business services companies coming on board. It feels like where marketing automation was five years ago.