Account Based Marketing
Account based marketing (ABM) is a business marketing strategy that focuses on specific client accounts rather than reaching a wide audience. ABM is an alternative B2B marketing approach. It puts greater importance on nurturing existing client accounts that generate big deals rather than many smaller deals from new customers. Based on statistics, surveys, and research, some of the accepted business principles that support this strategy are:
- 80 percent of a company's revenues come from 20 percent of its clients
- More sales can be generated from existing clients than new clients
- It is five times more costly to attract a new customer than to retain an existing one
- Clients put existing suppliers as the top source of information when looking for a new solution
- An existing client is more receptive to the marketing efforts of its supplier
Traditional business marketing relies on lead generation—attracting a prospect who has indicated interest in your company. A lead is a potential customer. Account based marketing focuses on discovering key accounts that deliver long-term value to the company. Marketers using ABM identifies companies as a whole as the prospect. Instead of researching information of personal prospects, marketers using ABM study:
- Business and industry reports
- Revenue history of prospective companies
- Account history of an existing client
- Revenue potential, margins, and profitability from a client
- Likelihood for repeat purchases
- Market influence or industry standing
- Interest in a long-term relationship and any similarities of both organization
Account based marketing has been found to be an effective strategy that can deliver high return on investment. Converting a few prospect accounts into clients can be very profitable when the clients are enterprises with billions of dollars in revenue. Marketing professionals using ABM can focus on a few key accounts and run their campaigns efficiently. They can personalize their campaigns better, which can be more relevant and useful to clients.
Another important benefit of account based marketing is the alignment of marketing and sales strategies. Since both teams are focused on accounts, marketing can easily share their intelligence research of key accounts to sales, and sales can provide important customer feedback to marketing. The company can also use a single software solution for their business intelligence and customer relationship management needs.
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