- Account-based marketing
Account-based marketing (ABM), also known as key account marketing, is a strategic approach to
business marketingin which an organisation considers and communicates with individual prospect or customer accounts as markets of one. The popularity of this approach is growing, with companies such as BearingPoint, HP, Progress Software and Xeroxreported to be leading the way [ [http://www.dmnews.com/Account-based-marketing-How-it-can-help-your-company-improve-demand-awareness-and-profitability/article/98038/ Account-based marketing: How it can help your company improve demand, awareness and profitability] ] .
Background and differences to traditional business marketing
Account-based marketing has grown since the mid-1990s as a demonstration of the trend away from mass marketing towards more targeted approaches. It parallels the movement in business-to-consumer marketing described by Peppers and Rogers in The One-to-One Future (1993): from mass marketing where organisations try to sell individual products to as many new prospects as possible, to 1:1 marketing where they concentrate on selling as many products as possible to one customer at a time [Peppers and Rogers; The One-to-One Future (1993); Page 23] .
So while business marketing is typically organised by industry, product/solution or channel (direct/social/PR), account-based marketing brings all of these together to focus on individual accounts.
In the marketing of complex business propositions, account-based marketing plays a key role in expanding business within existing customer accounts (where, for example, wider industry marketing would not be targeted enough to appeal to an existing customer). In scenarios where the initial sale has taken several months, it is reported that account-based marketing delivers a dramatic increase in the long-term value of the customer [ [http://www.dmnews.com/Account-based-marketing-How-it-can-help-your-company-improve-demand-awareness-and-profitability/article/98038/ Account-based marketing: How it can help your company improve demand, awareness and profitability] ] . ABM can also be applied to key prospect accounts in support of the first sale. In the example of Northrop Grumman, it contributed to the completion of a successful $2 billion deal [ [http://itsma.blogs.com/verge/2008/01/how-northrop-gr.html How Northrop Grumman Used Account-Based Marketing to Win a $2B Deal] ] .
By treating each account individually, marketing activity can be targeted more accurately to address the audience and is more likely to be considered relevant than untargeted direct marketing activity. As research demonstrates, buyers are looking for their existing suppliers to keep them updated with relevant propositions, but are often disappointed (in UK research, existing suppliers came top of all the different information channels that IT buyers use to look for new solutions – but more than 50% felt that marketing by their suppliers was poor) [ [http://www.themarketingpractice.com/research The Marketing Practice's Decision-Maker Index research into account-based marketing perceptions] ] . The research also demonstrates how much easier it is for organisations to generate more sales from existing customers than from new customers - 77 per cent of decision-makers say that marketing from new suppliers is poorly targeted and makes it easy to justify staying with their current supplier.
The roles of sales and marketing teams
ABM is a strong example of the alignment of sales and marketing teams proposed by Kotler, Rackham and Krishnaswamy in their seminal Harvard Business Review article, Ending the War Between Sales and Marketing (2006) [Kotler, Rackham and Krishnaswamy; Ending the War Between Sales and Marketing (2006) Harvard Business Review] . In the aligned model, the authors describe how organizations like IBM are able to unite tactical marketing efforts with defined sales goals, and use feedback from sales to identify new potential markets. For ABM to succeed, joint workshops and a close working relationship between sales and marketing are essential.
Marketing will also take an increased role in developing intelligence on key accounts – as proposed by Peppers and Rogers (1993): “When two marketers are competing for the same customer’s business, all other things being equal, the marketer with the greatest scope of information about that particular customer […] will be the more efficient competitor [Peppers and Rogers; The One-to-One Future (1993); Page 140] .”
Account-based marketing and the IT industry
Organisations seeing greatest current benefit from account-based marketing are IT, Services and Consulting companies. With complex propositions, long sales cycles and large customers, these organisations are ideal candidates for the approach.
Organisations supporting sales and marketing efforts in the IT industry – including the Information Technology Services Marketing Association (ITSMA) [ [http://www.itsma.com IT Sales and Marketing Association] ] and
The Marketing Practice[ [http://www.themarketingpractice.com/practices/account-based-marketing.php Account-based marketing campaign template] ] – have developed a great deal of the intellectual capital and practical tools shaping the direction of ABM.
There are a number of different frameworks for account-based marketing campaigns but, in general, the following approach is used:
* Create the strategic framework: methodology for selecting the accounts that will be focused on and framework of objectives and measures for the ABM programme
* Planning workshop: joint marketing and sales session around each account to agree goals and explore understanding of the account and relevant propositions
* Required research: marketing activity to build a more complete picture of the structure of the target organisation and its requirements
* Create plan: bringing together existing corporate marketing activities with new account-specific communications to achieve account-specific goals
* Execute: build a joint sales and marketing team to deliver on the plan
* Review: apply measures such as the value of sales, amount of potential revenue in the sales pipeline, coverage of communications in the account, perception-shifts or appointments made
In terms of specific marketing activities that form part of account-based marketing programmes, the following ‘menu’ provides a basis for selecting the appropriate tactics for any specific account
* Intelligence – marketing’s role in profiling the target account and contacts within it to identify relevant propositions and communication preferences
* Awareness – in target accounts where awareness of the supplier is low, regular communications have a role to play in creating a more favourable perception
* Campaigning – in large target accounts, lead generation campaigns can be run to uncover opportunities and appoint meetings
* Sales – marketing has a role to play in supporting sales bids to improve conversion rates and shorten the sales cycle
* Advocacy – the cycle is completed when customers become advocates and are used to drive further incremental business
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