Tue, 14 Sep 2021 09:39:18 GMT
Account Based Marketing (ABM) has taken B2B marketing by storm in recent years. It has been a force for good in reminding marketing what it’s actually in business for; selling.
In B2B, ABM (or key account marketing as it used to be called) is a necessary strategy in the overall marketing toolkit, especially for businesses that run 80:20 models - 80% of the value coming from 20% of customers. However, even at 12 months, a good programme is still focused on short-term sales activation, with creativity in short supply.
There is also a growing trend in businesses looking for their marketing partners to do ABM, but in fact what they really mean is sales.
Brand, business growth and profit
As marketing professionals, we should be concerned with understanding the needs of customers along with how to drive growth and profitability.
To achieve this requires big picture thinking and balance - not just short term sales focus. It also needs a clear and coherent understanding of how long-term brand building is a key driver of growth for businesses. Look at some of the big tech firms, eventually they reach an inflection point where innovation slows, prices are challenged and the pool of easily exploited prospects start to dry up. Once this happens, what then?
Where ABM succeeds is in delivering relevant communications to a very specific set of people in a highly targeted way. However, how many times have you ended up purchasing something that you never would have thought of buying before stumbling upon it? What ABM often fails to do is manufacture serendipity, i.e. it rarely reaches prospects beyond the intended set like other advertising might do. The pool of people ABM campaigns typically target is also usually too small to build any sort of significant brand salience, either.
While initially effective, a disproportionate investment into ABM means it’s likely the long-term result will be a failure to expand your customer base. It’s therefore essential to balance investment in long-term brand building alongside sales activation programmes to sustain growth, maintain premium prices and protect profit margins.
The 60:40 rule
The work of Les Binet, Peter Field and The LinkedIn B2B Institute has established that the most effective way to divide marketing budget is 60:40 between brand building and sales activation.
While brand marketing takes longer to generate business effects, it’s overall return is far greater in the long term. This is why a balanced approach married with short-term sales activation (such as ABM) is vital.
B2B Marketers and agencies have to do a better job of making the business case for longer-term brand building as well as sales activation. The evidence is clear; we need to work harder to ensure marketing remains a prominent force in business with a seat at the top table.
Marketing is selling
Wherever you stand on ABM and brand building, the end game for marketing is always a sale. What makes B2B different is sales often happen at the speed of paint drying. Many enterprises have large decision-making units (DMUs), multiple criteria and serious budgets to spend, and the sales process can take anything from several months to one or sometimes several years! Surely it stands to reason that creating distinctiveness and mental availability through brand building is an essential component for continuously and consistenly reaching DMU’s and continuing to expand the customer base.
It’s a proven formula for sustained business growth and creates better conditions. So when the personalised message promising the ‘5X better performance’ and ‘sign-up for the VIP demo’ of the ACME Cloud finally lands, the prospect already knows who you are and what you’re for, and is leaning in saying “please tell me more”.