The CMO GuideAccount-Based Marketing 2019regalixFebruary 20192 The CMO Guide to Account-Based Marketing 2019IntroductionOffensive terminal point was a key military strategy that was used by generals to win battles that were not necessarily stacked in their favor. It was a tactic meant to surprise opponents and was based on the principle that the narrower your frontline, the deeper you could penetrate the battlefield.1Businesses are discovering that this principle holds true in todays highly competitive marketplace. Firms that focus on fewer customers, i.e., with a narrow focus, can understand their customers needs better and subsequently deliver more value to thempetitive advantage is gained not merely from best-of-breed products or superlative services, because these are easily imitated; thriving relationships are the key. Customer relationships form the bedrock of growth for companies of all sizes across all industries. After years of spreading wide nets to catch as many fish as possible, businesses have realized that their strategic advantage is not derived from catching as many customers as they can, but from catching the right ones and nurturing them. This new approach has businesses trading in their fishing nets for sharpened spears. Account-Based Marketing (ABM) is one such tool. As defined by the Information Technology Service Marketing Association (ITSMA) and ABM Leadership Alliance in their report, Raising the Game with ABM: 2018 Benchmark Study, “ABM is a strategic approach to designing and executing highly-targeted, personalized marketing programs and initiatives to drive business growth and impact with specific, named accounts.”2Amidst the swirling mass of customer acquisition, retention and experience strategies, ABM stands tall where it matters. When asked to cite ABMs benefits, most people highlight shortened sales cycles and maximum returns. However, the area where ABM really outshines other tactics is in deepening customer relationships. ABM invites businesses to be customer-obsessed. It has flipped the funnel around. If traditional marketing and sales funnels focused on leads and converting those leads into customers, ABM focuses on identifying key customers and using specific strategies to take them along a journey that leads to long-term, fruitful partnerships. The value of ABM is in its ability to foster strong customer relationships by enabling businesses to develop the processes, tools, data and culture required to make target customers the primary focus. According to Forrester, firms that do this are twice as likely to enjoy loyal customer relationships and see revenue growth in excess of 10 percent.3The CMO Guide to Account-Based Marketing 2019 3The resurgence of ABMFrom being a relatively less-talked-about tactic a few years ago to one that most marketers will bet on, ABM has had a meteoric rise to the top in recent years. In a report by SiriusDecisions titled 2017 State of Account-Based Marketing Study, 93 percent of respondents ticked ABM as being very important or extremely important. In 2016, that percentage stood at 87 percent. In a few short years, ABM has cemented its place within the modern marketers arsenal of tools, marking its recent resurgence.It was only as recently as 2013 that ABM, as a term, even made an appearance on Google Trends.Matt Senatore, Research Director at SiriusDecisions4Multiple factors have contributed to this rise, including an increasing demand for personalization from customers and a fiercely competitive marketplace that businesses need to rise above. However, the single biggest factor contributing to the growing adoption of ABM is the rapid advancement of technology, especially in the marketing and sales field. From just a handful of products a few years ago, the marketing technology landscape today has grown to include over 5,000 different products. Thats the technology evolution that has accelerated the adoption of ABM in the B2B space.Advancements made in business intelligence, automation and targeting have made ABM efficient, affordable and scalable. When businesses tried to engage in one-on-one selling in the early days, they were stonewalled by the lack of scalability. ABM, in the past, was an analog tactic which meant that teams could handle only a handful of customers at a time. Without significant investment in terms of personnel, it was impossible for teams to cater to the revenue generation demands of a growth-oriented company. With digitization on the rise, businesses can now scale their ABM efforts at will. From IP identification and predictive analytics to automation and programmatic advertising, technology helps companies to scale their ABM efforts to deliver personalized customer experiences. Big data technologies help clean, group, update and fill in gaps in data sources about target companies. Intent-based predictive analytics can sift through potential targets and help determine which customers are likely to need the firms products or services and when they will do so. Targeting technology helps businesses deliver highly personalized and focused messaging on the platforms that matter to target customers. Marketing technology platforms help document every interaction with 4 The CMO Guide to Account-Based Marketing 2019the customer and enable attribution across all touch points. Digitization, moreover, has made ABM tools and platforms available at affordable prices so that even small and medium businesses can leverage automation and insight analytics tools. The returns on ABM are so favorable that even B2C companies are adopting the tactic. Done well, automation could lead to a 451 percent increase in qualified leads and 14.5 percent increase in sales productivity.5It is no wonder, then, that a growing number of companies are adopting ABM or increasing the budget proportioned to it. Five years ago, companies practicing ABM dedicated 15 percent of their marketing budgets to ABM. Today, that percentage has nearly doubled to 28 percent.6Approximately what percentage of your marketing budget is/will be spent on ABM?Figure-1Percentage of marketing budget spent on ABM28%FY2018(N=99)(Mean percentage)Source: Raising the Game with ABM 2018 ITSMA7The term account-based marketing was coined in 2004 by ITSMA, in an effort to convince marketers to step away from one-size-fits-all sales pitches.24The CMO Guide to Account-Based Marketing 2019 5There is also a rising number of companies who are transitioning from pilot ABM programs to full programs.Figure-2Businesses moving towards full-edged ABM programs 60% 38%40% 62%2016Pilot programFull program2017Source: SiriusDecisionsBenefits of ABMThe benefits of an ABM program are compelling. Here are some key benefits that are fueling its growth: Increase in revenue ABM focuses attention and effort on the deals that generate revenue. As a result, one of its biggest benefits is an increase in revenue. According to reports, companies using ABM generate 200 percent more revenue for their marketing efforts compared to those that dont.8A recent Regalix study,9State of Account-Based Marketing 2018, found that the benefits of ABM, as mentioned by marketers, included an increase, both in the number of deals closed and the average size of a deal, in ABM accounts, as against non-ABM accounts. Better return on investmentABM is precise, targeted and measurable. It minimizes activities that produce waste or produce few or no results. Every process within an ABM program is goal oriented, which maximizes ROI. According to ITSMA, 87 percent of marketers who measure marketing ROI say ABM outperforms all other marketing investments.106 The CMO Guide to Account-Based Marketing 2019Figure-3ABM delivers higher ROI than other marketing activitiesABM delivers substantially higher ROI than traditional marketing1%Lower22%0-9% greater9%10%greater12%25%greater11%50%greater17%Double10%200%greater18%>200%greater77%achieving 10% or greater ROI from ABM45%achieving more than double the ROI from ABMITSMA research has long documented the fact that ABM delivers higher Return On Investment (ROI) than all other types of marketing programs. This years study digs deeper, and shows that ABM programs are most often generating substantially higher returns; with almost half of ABM leaders generating more than double the ROI of other marketing efforts.Source: Raising the Game with ABM 2018 ITSMA11Faster acquisition processIn a typical B2B sales scenario, there are at least 6.8 decision makers that need to be convinced before a business can sign on a customer.12Multiple rounds of discussions usually slow down the acquisition process. ABM gives companies the ability to control the narrative and specifically nurture the primary decision maker and all relevant prospects at the same time. It helps businesses build a network of advocates within each customer enterprise. This goes a long way in expediting the process of converting prospects and generating new business. Strong customer relationshipsAt the heart of any ABM program is the winning combination of personalization and nurturing. According to Frost the content consumed, past deal sizes, the strength of relationships within the account and more. Another approach one that is recommended by ITSMA is to score accounts based on attractiveness (size, growth rate, industry, other parameters that are important to the business) and business strength (sales insight how well prepared the business is to take on the account in terms of capability and commitment). Accounts with high scores on both axes are the best candidates for one-to-one investment.It was only in 2013 that ABM, as a term, first made an appearance on Google Trends.2510 The CMO Guide to Account-Based Marketing 2019Figure-5An example of a scorecard based on account attractiveness and relative business strengthRelativebusinessstrengthAccount attractivenessSource: Information Technology Service Marketing Association (ITSMA)Personalizing the contentContent personalization enhances the value of a businesss offering and increases engagement by addressing what customers really want at any given time. The foundation of personalization lies in knowing the customers more deeply. The degree of personalization would vary with the type of account. Personalization can also be done for individual accounts or across industry verticals.Figure-6Personalization across accounts and industry verticalsHow personalized?Account Based Demand GenerationAccount & individualContent created for the specic account and person (e.g., Amazon, Jeff Bezos)Content created for the account and persona(e.g., Amazon & Executive)Content created for the account specically and appeals to many personas(e.g., Amazon)Account & personaAccountIndustry &personaContent created for the industry and persona(e.g., eCommerce & Executive)Content created for the persona (e.g., Executive)Content created for theindustry (e.g., eCommerce)PersonaIndustrySource: Bonfire Marketing15