Account-based Marketing (ABM) was believed to be a technique that is only suitable for large enterprises, the companies that had huge budgets and willing to take a long-term ABM approach in their Go to market efforts. However, it's just a myth. ABM can be relevant and applied successfully by smaller companies - Startups including - to win high-value contracts.
With that in the background, let us analyze the typical issues that companies face in their traditional lead based marketing approach.
Attracting wrong type of leads
The conversion of a lead to a customer, on an average in B2B, is somewhere between 1-2%. One of the primary reasons for such a low conversion is the quality of leads that marketing teams manage to attract into their funnel. The longer such Leads remain in the funnel, the more the resources & bandwidth that gets wasted from the marketing and sales teams. It also results in opportunity cost by not being able to focus on important and high-value leads.
When the overall GTM process of a company is optimized to work with such a low level of conversion, marketing has no option but to keep filling the funnel with as many leads as possible, without caring how good or bad the Leads they are bringing are.
Of course, one can adopt gating processes such as lead scoring, lead qualification, etc. But at the end of the day, those don't eliminate the inefficiencies. At best, it can filter some Leads from overflowing to the next stages.
So, there got to be better ways to reduce, if not eliminate, the Garbage in - Garbage out paradigm in Marketing.
One size fit all approach
In the traditional lead-based marketing way, a lead is just a lead - especially at the top of the funnel stage - regardless of how senior or important that person is.
Everyone in a marketing segment is treated equally. Marketers feed them with the same type of messaging, disregarding the context of the lead. Whereas buyers, on the other hand, expect themselves to be engaged contextually. One could argue that persona-based targeting can be a likely workaround for such a requirement. Unfortunately, it doesn't go too far either, as no two companies are the same, and similar role definitions do not mean the same when compared against two companies.
Moreover, the B2B buying process is changing and shifting away from the traditional channels. Buyers start their buying process by researching online. They complete as much as 70% of the process before making contact with the vendor. In such scenarios, buyer committees would have been formed, comprising of buyers and influencers. Each member of the group has to be engaged differently, taking into account the individual needs. This is just not possible in the lead-based approach.
Perils of Silos
Most startups are organized functionally as marketing and sales departments. This structure typically results in teams operating in silos. The larger the company, the more siloed they become. The reason for this is pretty logical in that both teams usually have different performance goals based on their respective functions.
Notice in the above chart that there are no overlaps in their objectives or shared goals. And this setup results in teams operating linearly. Marketing develops leads and feeds into Sales to close. This handoff approach does not necessarily fit for the times of today, when prospective customers need touch-points from both Sales and Marketing depending on the stage they are in, from the identification to closure.
So, How can ABM help?
The idea of Account-based Marketing is to build a Sales and Marketing process that's aligned and focused on building relationships with carefully selected accounts. When companies focus on a narrow set of customers, they can offer a personalized purchase experience, engage consistently and reduce wastage. In essence, the down-sides associated with lead-based marketing discussed in previous paragraphs are what ABM is designed to fix.
Why Startups should do ABM in 2021?
- Efficient use of resources - Targeting only the right accounts. So less wastage of resources.
- Build a SaaS Flywheel - sell more high value plans to high value customers using ABM
- No wasted leads - By making the sales and marketing teams work together on a common revenue goal.
- ABM is less expensive now - The entry barriers, especially with the tool cost, has been lowered and is affordable more than ever before.