Connecting The Dots Across Your Commercial Data, Systems and Channels To Profitably Deliver Personalized Experiences To Buyers In Your Key Accounts
Anywhere from 70 to 91% of all business-to-business organizations are adopting sophisticated Account Based Marketing (ABM) programs that apply digital, targeting, and personalized marketing practices to improve sales productivity and key account development. These strategies blend advanced profile and account matching analytics and third party account information and signals, and marketing content to achieve high degrees of sales and marketing integration, accelerate enterprise selling, and redefine the customer journey.
Account Based Marketing (ABM) – as we define it – is an integrated sales and marketing strategy that leverages marketing content, data insights, and sales engagement to profitably deliver personalized experiences to targeted buyers across all of your paid, owned, and earned selling channels.
But many businesses are quickly recognizing that ABM programs are not without their set of headaches.
ABM programs are expensive, and resource and technology intensive. They can command anywhere from 19% to 40% of go-to-market budgets, at least according to consultants like ITSMA and the software solutions and data providers that support the execution of ABM programs. Those numbers may be exaggerated, but it’s safe to say businesses are spending a lot of money on ABM programs. For example, a survey of CMOs by Duke reports marketers are now investing more money in Customer Relationship Management than they are in Branding. One reason ABM programs are so expensive and resource intensive is because the act of personalizing content, messages and treatment models for a single or select few target audiences requires the same amount of effort as a broad-stroke campaign.
But while these programs might suck the air out of marketing operations in their development and creation, they can be extremely profitable, primarily because they are (or at least can be) a highly “scalable.” ABM programs scale because they leverage technology and data from across the commercial ecosystem to connect buying signals from marketing and deliver them to account teams to help them develop accounts better. This creates a multiplier effect: it allows your entire digital marketing and media budget to directly support and augment the efforts of front-line business development, account management, and customer success teams who generate the majority of conversations with the majority (80%) of customers. So it’s no surprise that 87% of B2B marketers told IDG they are getting a higher ROI from ABM initiatives than the other marketing investments they are making.
The problem has been that the way most organizations and agencies deploy ABM programs are neither scalable nor affordable. As a consequence, while scalability is critical for ABM programs, few organizations are realizing their full potential to accelerate sales and expand revenues deep into the revenue cycle and improve the return on commercial technology, data, and content assets – which are among the largest financial assets on the company balance sheet. Getting higher returns on commercial selling assets is the key to addressing the Achilles heel of all ABM programs – scalability and profitability.
For example, ITSMA Benchmarks suggest that the cost of delivering highly personalized one-to-one service to an account can cost thousands of dollars per account. Those unit economics won’t scale across hundreds or thousands of accounts unless technology dramatically changes the cost structure of targeting, servicing, engaging, and developing accounts. “For ABM investment to really pay off it needs to scale,” according to Mike Marcellin, CMO of Juniper Networks. Marcellin and other leading CMOs are focused on findings ways to massively ramp up their ABM efforts to profitably deliver that level of personalized service to thousands of stakeholders in thousands of accounts. To execute ABM at scale, Juniper Networks and other leading B2B marketers are building out a central customer data repository and a core set of data sciences for highly analytical targeting to execute programs through a state-of-the-art sales and marketing stack. This yields a massive ramp up in their demand generation, engagement, and expansion efforts.
One significant reason ABM programs are difficult to scale is that they are a relatively new and complex discipline which is poorly understood. This has led to significant confusion about what ABM actually means, which can be seen in the various descriptions of what ABM actually does – it ranges from Account Based Targeting, Advertising, Lead Generation, Acquisition, Key Account Management, Expansion, and Cross Sell. Individually these definitions represent a sort of tower of babbleof vendor capabilities that more often than not operate in siloes. But in aggregate they communicate the truth that ABM programs should support every stage of the revenue cycle.
A big reason ABM programs are difficult to scale is it is a relatively new and complex discipline that is poorly understood. This has led to significant confusion about what ABM actually means. This can be seen in the various descriptions of what ABM actually does – which range from Account Based Targeting, Advertising, Lead Generation, Acquisition, Key Account Management, Expansion, and Cross Sell. Individually these definitions represent a sort of tower of babble driven by vendor capabilities and messaging. But in aggregate they communicate the truth that ABM programs should support every stage of the revenue cycle.
Another factor is the technology and data capabilities that underlie ABM programs have proliferated in recent years. There are too many different solutions calling themselves ABM solutions. As evidence, over 60 of the 100 technologies we identified in our list of 100 technologies transforming the commercial model support ABM programs either directly or indirectly. This level of fragmentation – and the technology, data and process siloes they create – is a core reason ABM programs are so expensive and difficult to execute. This focus on technology also causes the managers investing in and executing ABM programs too fall into the trap of defining them as a “technology” initiatives rather than marketing programs. Analysts reinforce this belief that the technology does all the work, and solution providers do little to dispel this notion.
ABM is much better described and managed as a system that connects dots across the sales, marketing and service ecosystem rather than a narrow technology category. Today, that system includes a wide range of companies that provide a robust data cocktail needed to fuel ABM programs such as account data management and orchestration solutions like Lattice, LeanData, Jabmo, and 6Sense and third party data providers like Bombora, Discover, and Experian how help deepen those profiles with thousands of attributes or signals of intent to buy. This ecosystem is consolidating and will rationalize as the industry matures.
From a strategic perspective, the most important technology players in the ABM ecosystem are the more than dozen Customer Data Platforms – like Tealium, Zylotech, Blueshift and Horizon blu. – who act as an engagement data hub that aggregate, harmonize and attach all that that data to a persistent customer ID so it can be used to model segments, target audience, and executed highly personalized campaigns. Today, most of those campaigns are delivered through paid media and email. As programs mature, the value of CDPs will multiply as they inform and trigger programs through every marketing and sales channel in the business – especially front line sellers with lips that move.
In our experience, there are five reasons why marketers are not realizing the full potential of ABM to grow revenues, return on investment and most importantly the return on commercial assets that make up the modern growth engine.
- ABM programs are only executed in media channels rather than the sales, service, and owned digital marketing that dominate the B2B go-to-market mix and command the majority of interactions with buyers in key accounts;
- ABM is viewed as a technology rather than a core go to market capability leading to a fragmented set of siloed capabilities rather than a highly coordinated go-to-market motions;
- Agency partners lack the analytics, data management and channel orchestration capabilities to support data-driven targeting, modeling, personalization and omnichannel execution at scale;
- CMOs don’t recognize ABM is a team sport – and fail to achieve the level of coordination, orchestration, common purpose with sales required to drive engagement, activation and expansion deep into the revenue cycle
- CEOs and CFOs do not understand the economics of ABM because they fail to properly value their commercial data, technology infrastructure and content assets and don’t measure ABM investments based on contribution to firm and customer value.
Five Keys To Executing ABM at Scale
In our research and experience executing ABM strategies and programs, our faculty has identified five things every CMO needs to have in place to profitably execute and scale an ABM program that drives revenues, expands accounts, and grows firm value.
1. Omnichannel Execution: Expand the Reach of Your ABM Program Beyond Media and Advertising Channels
“Right now, most ABM programs are really better described as data-driven advertising programs,” says Paula Connard, the Chief Personalization Officer at Horizon Media. “The reality is most organizations have only scratched the surface of the vast financial potential of ABM because the majority of programs are only using paid media and marketing automation channels. There is far greater potential for ABM to support the entire channel mix at every stage of the revenue cycle, including business development, customer success, direct mail, email, as well as other “owned” digital marketing channels. That’s especially true in B2B marketing where paid media is just a small fraction of the go-to-market formula.”
As the largest independent media company in the United States, Horizon Media certainly understands the power of paid media. But they also understand that B2B marketing has become a data-driven, technology enabled team sport where the team that leverages data, content, and “owned” sales and marketing channels wins. That’s why Horizon has invested in building out expertise in B2B go to market, customer data platforms and owned digital selling channels.
“The notion of ABM is a bit of an oxymoron because most programs today largely ignore the most important sales and marketing channels in the B2B arsenal,” says Chris Hummel, author of the book Revenue Operations and President of Green Thread, the B2B practice at Horizon Media. “Only a small fraction of B2B marketing happens in advertising. The reality is the majority of customer engagement, activation, and expansion occurs in what we call “owned” sales and marketing channels. This disparity is amplified the deeper you go into the revenue cycle which is the place most conversations about retention, cross sell, upsell, and expansion are happening.”
2. A Connected Content Strategy That Supports Personalized Experiences Across Every Customer Channel and Stage of the Revenue Cycle
Most ABM programs tend to focus on front of the funnel messaging. That is antithetical to the goal of driving targeted buyers within priority accounts through the engagement, activation and expansion phases of the revenue cycle using personalized content experiences. Content, creative messaging, and ABM strategies cannot be divorced because the ability to personalize and dynamically optimize content based on persona, industry, stage of the revenue cycle and buyer preferences and habits is ultimately the gasoline that makes an ABM program run. A connected content strategy bridges the core brand positioning, value story and messaging developed by the CMO with tactical campaign execution in campaigns and conversations. The key is architecting and building out sales and marketing content based on target personas, journey stages, segments, industries, and pain points. The deeper an ABM program goes into the revenue cycle, the more important thought leadership, customer validation, sales playbooks, and value management content are to the program’s success. “Properly executed, ABM is a value management process executed at scale,” according to Brent Adamson, Author of the book Challenger Selling. Too often organizations will outsource or delegate content to creative agencies who are divorced from the ABM process. This is a mistake because a highly targeted and modular set of content needs to be drawn from product, sales enablement, and brand teams to ensure every customer interaction is on brand, on message and driving the sale forward.
3. A Customer Data Platform That Supports Data-Driven Segmentation, Targeting, Execution and Content Personalization at Scale.
Organizations that want to execute ABM at scale need to develop internal competencies and agency partners who have capabilities in analytics and data management. This is because data-driven segmentation, targeting, personalization, and multi-channel orchestration becomes essential to scaling an ABM program once it is launched. A true ABM program should use insights from first and third party customer data sources to help marketing, sales, or customer success teams to develop customers – whether that’s new revenue, keeping existing revenue, or upselling the current customer base, according to Viral Bajaria, the Founder of 6Sense, a leading platform in the ABM space. So it’s not surprising that 77% of CMOs are investing in stronger data strategies to develop better customer and account profiles using first and third party data sources, according to the Duke CMO Survey.
In particular Customer Data Platforms (CDPs) are now a critical backbone for executing an ABM program profitably and at scale. This is because a successful ABM program takes a high degree of data management, orchestration of campaigns across channels, and coordination between marketing with sales and service teams. “The reality is most organizations have yet to realize the vast financial potential of Customer Data Platforms (CDP) to inform true data-driven sales and marketing, including ABM,” says Paula Connard, who leads the development of the Customer Data Platform blu at Horizon Media. CDP platforms have the ability to aggregate data from many first- and third-party sources to target and execute marketing programs. But to date, most CDPs focus on supporting programs in paid media channels, when the same data can be applied to almost every customer facing channel in the business. Organizations that are able to leverage their CDPs in owned sales and marketing channels, including those that support customer facing employees with lips that move, are generating far greater performance at every stage of the revenue cycle.”
The rising prominence of the CDP as a backbone for executing highly integrated and data-driven go-to-market programs can be seen in the consolidation of the core technology platforms that support ABM. Notably, in the last year, 13% of the top 100 commercial platforms on our list merged their capabilities to better support a more integrated system of selling and managing first and third party customer data sets, according to our Revenue Operating System report. Many of these include the combination of firms that provide intelligence to identify and target customers and accounts with the Customer Data Platforms (CDPs) that aggregate, analyze, leverage and distribute those critical insights through sales, media, and marketing channels. For example, two key players in the ABM space – Demandbase and Terminus – recently acquired Engagio and Zylotech respectively, which are CDPs that aggregate first-party data from across touch points to enrich its solution.
4. Revenue Operations: The Ability to Align and Coordinate Marketing, Sales And Service Along The Revenue Cycle.
CMOs need to recognize that ABM is a team sport played with sales and customer success, according to Chris Hummel, President at Green Thread and co-author of the book Revenue Operations. “When it comes to ABM, the team that connects the most dots wins,” says Hummel. “Revenue Operations – the alignment of revenue teams and the systems, data, and operations that support them – is fundamental to a successful ABM program. This is because the average B2B organization relies on over 25 different sales and marketing solutions, tools, and data sources to run the modern commercial model.”
Revenue Operations is key to success because ABM is a truly cross functional program. Most of the data and digital channels needed to execute these programs are owned by marketing operations – including martech stack, demand generation programs, the customer interaction data they both produce, and the marketing content that fuels them. But these assets alone won’t ensure success. CMOs and their agency partners need to be very smart about how they execute because ABM programs have many moving parts and face the same headwinds as every other sales and marketing collaboration in history. In particular, they need to enable the sales and success channels – including SDRs, BDRs, account management and customer success teams – that command 80% of opportunities and conversations at the middle of the funnel and during account expansion.
Jaimie Punishill, the CMO of nCino who has been executing ABM at scale for several years reinforces this point. “ABM is fundamentally silo busting,” says Punishill. “ So executing a successful ABM program is a matter of alignment and orchestration across the systems, teams, and operations that support the entire revenue cycle, not just the front of the funnel.”
5. Measurement Based on Contribution to Revenue Expansion, Customer Lifetime Value and the Return on Commercial Assets
Successful organizations value and measure their ABM programs and investments based on their contribution to the return on commercial assets. Commercial assets include the data, technology, people, digital channel infrastructure, and content that supports the go-to-market system, and now makes up two thirds of growth investment in a modern B2B commercial model, according to the Revenue Operations Report.
Getting higher returns on commercial selling assets is the key to addressing the Achilles Heel of all ABM programs – scalability and profitability. The most financially valid business cases will treat ABM as a “force multiplier” that dramatically improves the utilization of these growth assets by taking significant human labor sales preparation out of content personalization and marketing program execution. “ABM can dramatically improve your organizations return on assets because the average B2B organization relies on over 25 different sales and marketing solutions, tools and data sources – and most of them are essential to running an ABM program,” says Chris Hummel. “This commercial infrastructure is one of the most valuable financial assets in the business. ABM programs are inherently profitable because they focus limited sales and marketing resources on the highest value buyers within target accounts. But their greatest value lies in their potential to leverage and monetize all of the commercial assets in the business by turning technology and data into force multipliers. This is why a well-orchestrated ABM program, when measured based on a returns on asset basis, are among the highest return investments an organization can make.”
The problem most organizations have in establishing valid measurements for their ABM programs and investments is that the economics of ABM, while compelling, are not well understood by CFOs and the senior leadership team who allocate capital. Consider that over 95% of inbound digital marketing interactions are anonymous to the degree that an account rep does not know their customers are engaging with the business. That means if a company spends $10 in fully-loaded owned and paid marketing expense to get an anonymous inquiry, they are actually spending $200 for that inquiry. Add in the capital expense of maintaining the digital marketing infrastructure that supports that lead flow and it’s even more expensive. The real value of ABM is that it makes all of that investment pay off by identifying more of the leads coming in digitally and getting that information to a human rep who can convert it into value, winning a deal or saving an account from leaving. Conventional waterfall and siloed marketing metrics fail to make this economic formula clear.
Most B2B CMOs believe that the traditional measures of sales and marketing effectiveness based on the demand unit waterfall model – Marketing sourced pipeline to Marketing Qualified leads to Sales Qualified Leads – are flawed. In practice, these metrics waste precious energy on documenting who gets credit instead of improving account profitability and customer lifetime value. They also make it difficult to reconcile interactions with many individual stakeholders into a coherent picture of account potential, profitability, penetration, and customer lifetime value. “Sales and Marketing have historically been separate functions with separate goals and KPIs,” says Jaime Punishill, CMO of nCino. With all this confusion about the economics of ABM, it’s little surprise that almost half (45%) of companies don’t currently measure the ROI of their ABM investments. For ABM to work, marketing and sales will need a common economic purpose and financial incentive based on account potential, profitability, penetration, and customer lifetime value if they are going to collaborate around a common customer journey.