Benefits of account-based marketing?
Account-based marketing (ABM) is highly regarded and frequently discussed in webinars, marketing conferences, and strategic marketing discussions. Despite the widespread attention it receives, only 43% of those polled have a comprehensive understanding of the advantages of ABM.
So, what exactly is account-based marketing? Essentially, it is a marketing and sales approach that prioritizes accounts (as opposed to individual leads) as the main focus. The strategy uses data analysis to identify the right accounts to target, leverages research to determine the key contacts within those accounts, and employs tailored, timed communications to engage those contacts.
Although there is a lot of excitement surrounding ABM, the sheer amount of information available on the subject can be overwhelming. It can be difficult for marketers to fully grasp the concepts and benefits of an account-based marketing strategy. To simplify things, we have compiled a list of the top 10 benefits of using account-based marketing.
ABM Benefit 1: Account-based marketing facilitates the involvement of all relevant decision makers.
The average number of people required for a purchasing decision has increased to 5.4. This highlights the importance of including all stakeholders from the start. Every additional person added to the decision-making team extends the sales cycle. For example, if everyone was ready to make a decision, and then a VP joins the buying team, the process would have to start all over again with that person. By focusing on accounts instead of individuals, you can speed up the closing process by engaging all decision-makers from the outset of the buyer’s journey.
ABM Benefit 2: ABM = Increased ROI
ABM’s high ROI is widely recognized. 80% of marketers who track ROI state that ABM initiatives outperform other marketing strategies. Among those who have used ABM for a year or more, 60% report a minimum revenue growth of 10%, with 19% experiencing a revenue boost of 30% or more.
Marketers aim for both organizational growth and tangible results from their efforts. ABM offers not only increased revenue but also a direct connection between marketing and closed deals and revenue. In fact, companies implementing ABM see 200% more revenue from their marketing efforts.
ABM Benefit 3: ABM = Increased Contract Value
Acquiring customers is important, but it’s not the ultimate goal. A customer who signs a contract worth $10,000 for a year, costing $1,000 to acquire, yields a gross return of $9,000. On the other hand, investing $1,000 in a customer who signs a 5-year contract worth $8,000 per year will yield much higher returns.
ABM tactics have been shown to significantly increase deal sizes by focusing on customers who are more likely to be successful with your product and, therefore, more likely to remain as a customer. The contract value for ABM targeted accounts increases by an average of 40% for mid-market accounts and 35% for enterprise accounts. These results can lead to substantial growth for your organization without increasing acquisition costs.
ABM Benefit 4: ABM Is Quickly Gaining Steam
ABM is not just a trend, it’s widely adopted by major and rapidly growing organizations. 52% of companies report that they have ABM pilot programs in place and 83% of those who have tried ABM plan to increase their usage in the coming year.
ABM Benefit 5: ABM Is Not Just For Enterprise
In the past, ABM was a labor-intensive and time-consuming manual process, only feasible for organizations with ample resources and the ability to test new marketing techniques. While the basic process remains largely unchanged, ABM software has made it accessible for any company that effectively uses marketing technology. If you are using marketing automation and a CRM, you have the necessary tools to begin an ABM strategy. Although ABM is heavily used by large companies, small companies are the most active in testing it.
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A significant 83% of ABM users report that the top benefit is increased engagement with target accounts, which is a significant advantage.
Generating leads is crucial for a business, but the next step to converting them into paying customers is to foster their engagement with your brand. Effective lead engagement requires a deep understanding of your buyer, including their needs and preferences, and a marketing strategy that leverages that knowledge. The personalized approach of an ABM strategy enables you to communicate directly with prospects with a customized message, boosting the chances of a positive outcome.
ABM Benefit 7: ABM = Strengthened Retention + Expansion
Customer retention is a crucial metric for success, as the saying goes, “retaining an existing customer is easier than acquiring a new one.” It’s a fact, as Invesp reports that acquiring a new customer is five times more expensive than retaining an existing one.
Studies show that 84% of companies believe that ABM significantly benefits retaining and growing current customer relationships. Acquiring new customers can be costly and result in high churn rates if not done properly. Investing in keeping your customers will generate a consistent stream of stable revenue.
ABM Benefit 8: ABM Improves Consistency
B2B customers typically engage with a company through 6 different channels, such as ads, email, phone, etc. However, 65% of them become frustrated by the lack of consistency across these channels. ABM can help address this issue by ensuring a consistent experience through all channels of communication for each individual in a targeted account. As Jake Sorofoman of Gartner explains, “Consistency is key in customer experience, and it can easily be disrupted by conflicting objectives.” ABM ensures everyone is aligned and working towards the same goal, delivering benefits for the company.
ABM Benefit 9: ABM Helps with Departmental Alignment
“Alignment between sales and marketing is a challenge for many organizations, however, a study shows that businesses with aligned sales and marketing teams have a 36% higher customer retention rate and a 38% higher win rate for sales. According to a recent survey, 91% of those with an ABM program in place reported being aligned with sales, either tightly or moderately. ABM fosters better communication between departments by focusing on shared goals, values, and metrics, such as defining the ideal customer profile.
With ABM, sales is provided with high-quality leads, as the focus is on targeting accounts that have already been deemed a good fit. ABM prioritizes quality over quantity, allowing sales to spend less time qualifying leads and more time selling to prospects who are more likely to buy and become long-term customers.”
ABM Benefit 10: ABM and Marketing Automation Go Hand-in-Hand
The combination of ABM and marketing automation provides a powerful solution for marketers, including:
- Connecting buyer behavior and data for a comprehensive view of accounts.
- Scoring accounts and launching targeted campaigns and workflows.
- Reaching all decision-makers in an account and ensuring a consistent experience across the organization.
By leveraging the right strategy and technology, ABM can help balance your marketing approach, spanning brand awareness, demand generation, and customer retention and growth.