COVID-19 has caused many B2B marketers to double down on ABM and engage their audiences with account-based targeting and insights. With social distancing influencing how marketers operate, ABM has become integral to adapting business operations to better cater to audiences that are in-market.
New research from ABM platform Demandbase indicated that businesses with mature ABM programs have increased their budgets for their ABM plays by 40% — 77% higher than businesses whose ABM programs are in their infancy. As a result, 22% of businesses reported a 28% higher budget allocation in 2020 than in 2019.
Demandbase’s 2020 ABM Market Research Study surveyed 900 employees from B2B businesses such as Drift, Bombora, Uberfip, Outreach, PFL and more, to gauge the impact of ABM strategies on marketing and sales alignment, content and account selection. The report highlights the differences between businesses with mature ABM programs and those with developing ABM strategies, showing how a business’ level of investment in account-based leads and content can result in higher ROI.
The report also explored the key characteristics among businesses with the most success in ABM, analyzing their full ABM plays, as well as their expertise in all aspects of ABM, including measurement.
Other key takeaways from the research include:
- The highest performing businesses worked closely with their marketing teams to unify their channel engagement and tactics;
- Teams still struggle with measurement due to traditional lead-based habits;
- 43% of B2B companies treated the alignment of marketing and sales processes as a top priority in 2020;
- Without ABM, 83% of businesses cannot use their CRMs properly, 60% cannot use LinkedIn and 73% fail at marketing automation;
- Data quality was cited as the biggest challenge for implementing ABM strategies; and
- More ABM strategies involved the integration of solutions and IT.
“We’re always eager to hear directly from marketers and learn from their experiences,” said Peter Isaacson, Chief Marketing Officer at Demandbase, in a statement. “This research reveals a lot about how ABM is fueling growth in the B2B world. It reinforced what we’ve believed for a long time now, that the companies that have the proper ABM foundations in place and have been dedicated to the strategy for the long haul enjoy very high levels of success. It also proves the value of such an approach for companies of all sizes.”
Demand Gen Report had the opportunity to sit down with Brian Finnerty, VP of Growth Marketing at Demandbase, to dive deeper into the report and expand on the impact of ABM on the B2B industry.
Demand Gen Report: The report states that ABM budgets are increasing year over year, with 2019 to 2020 having probably the biggest jump. Why have budgets for ABM increased so drastically?
Brian Finnerty: Budgets have risen fairly substantially, basically it’s been a 20% increase year over year in ABM investments. In 2019, companies were allocating 20% of their total marketing budget to ABM, which is pretty amazing. ABM hasn’t been around that long, but to see that investment has gone from 20% to 28% in 2020 is a pretty massive boom.
The first thing I take from that is the reason budgets are increasing for ABM is because companies are having success with ABM. ABM providers are showing ROI and showing companies that if you do a split test between more traditional demand gen and ABM, the results are hard to deny. If you’re getting increased ROI from ABM, generating more pipeline more closed-won business and expanding your existing accounts, versus your more traditional demand gen at reach, it’s pretty clear where you’re going to put your money. To some degree, money talks, and if marketers are investing more money in ABM, that means that they’re seeing a better return.
ABM over the past number of years has been able to show measurable results and you can link an account-based approach to increased pipeline generation and close-won rates, as well as increased deal velocity and increased retention of existing clients. That is why budget allocation has changed and why people continue to put more of their overall marketing budget into ABM. You’re always going to spend some of your budget on PR and communications and brand building. There are just certain marketing costs that you’re always going to have to support. But when you look at demand generation, an account-based approach is really taking precedence because quite honestly, it’s showing results.
DGR: One of the big aspects of ABM is the quality of data, but the report said that one of the biggest challenges is having that high-quality data. Why is it so difficult for B2B orgs to secure and maintain high-quality data?
Finnerty: In an ABM context, data is everything. When you’re focusing on your target accounts, and you’re focusing on the right people in those accounts, that’s a complex data problem. And while the data sources have improved over the years, and we’ve got access to a number of good data sources on accounts, it’s still a challenge. And there’s still misfires where companies get wrongly classified or subsidiaries within an organization are considered in isolation. Our data on accounts is always improving, but it’s critical to have that data so that you can build the right targeted canvas. And then within that, having data on the right people at those accounts is another challenge.
One of the challenges is a very simple one. People change roles and move on all the time. Somebody moves from a VP of Marketing role in a digital advertising company and becomes the VP of Marketing at a financial services company, and often there’s a lag there. LinkedIn is probably one of the quickest data sources to update because people will update their job descriptions and job titles there. You’ll often find yourself a couple of months behind, and that can be a real burn for an account-based approach because you’re still assuming someone is at a particular company and you have these orchestrated plays around reaching them. You may not know that they left a month ago or they’ve gone on maternity leave. If your data is not up to date, you’re burning money and burning it in the wrong places.
That’s why you’ll see 43% of respondents in the survey who have such a strong ROI on ABM cite improving data quality as a challenge. It’s undeniable that with the wrong kind of data, you’re in trouble.
DGR: The survey showed that alignment is important for ABM, and that 43% of companies are starting to align their sales and marketing teams in order to succeed in 2020. Why is alignment so critical to successful ABM?
Finnerty: When I see a stat like that, it definitely makes you sit up and take notice. That’s a lot of people who say sales and marketing alignment is just a critical factor of success. I think when ABM is executed successfully, your sales and marketing teams are moving in lockstep; they are very tightly aligned.
When you’re running multichannel campaigns, you know to reach the right accounts and the buying committee at the right accounts. If sales and marketing aren’t aligned correctly, then you’re going to have what I call a ‘leaky funnel.’ You could have marketing running a beautifully executed direct mail campaign to hit CMOs and the sales team doesn’t follow up for a day, a week, a month, never.
Unless you’ve got a highly orchestrated play around your campaigns that involves marketing and sales touches, you’re essentially going to drop the ball. You’re essentially wasting money.
One of the beauties of account-based marketing is those differences just melt away. You’ve got sales and marketing marching to the beat of the same drum. The common metrics that you’re looking at are pipeline, closed-won business and potential expansion within existing customers.
If you can get your sales and marketing teams aligned around those three metrics, that is a fundamental step forward for aligning your sales and marketing team. If you give people a shared goal, invest the budget and spend towards reaching that goal, they’re all marching in the same direction. Your chances for success are just infinitely higher.
DGR: How are marketing teams using ABM to unify their efforts and tactics?
Finnerty: There’s some very strong data in the report to show that a large percentage of companies are adopting ABM, certainly companies with a thousand employees and above. The adoption rates are high. You’re also seeing that within the increasing budgets as well. Marketing teams are adopting ABM at a greater pace and volume than ever before.
One of the ways I think marketing teams are using ABM most effectively now is by defining all their efforts around a target set of accounts. The biggest thing that you can do is unified account information, so that you are identifying your target account list, making sure the right accounts are included on that target account list and then you’re orchestrating all of your sales and marketing efforts around those accounts.
A lot of people forget that that should be an organic exercise. You don’t just set your target account list that started here and just walk off and forget about it. It really is an organic, living, breathing thing. The important point is that you need to revisit your targeting list regularly to make sure that it includes the right accounts and that you’re excluding accounts from industries that are, for whatever reason, under serious pressure.
Having a unified account foundation and making sure that you are going out to the right accounts, and that you refresh that list of target accounts regularly ensures that you are spending your budget on the right accounts, and the right people in those accounts that have budget and are willing and able to buy your solution. If you forget your target account list and just keep plowing campaign dollars towards those accounts, that’s simply not sustainable.
DGR: Which channels are the most effective when conducting ABM plays? And how does choosing the right ones significantly help when implementing an ABM strategy?
Finnerty: The report showed that there are three channels in particular that are really strong for ABM. The first one is direct mail, which had over 63% of investment from companies. The second one was content, which came in around 55%. And the third one was targeted account selection, which came in at 52%.
Of all the areas that people plan to invest most, direct mail has made a real resurgence, since direct mail is an old marketing tactic. In an ABM world where you’re narrowing your focus to a set of target accounts and the buying committee of those accounts, direct mail can be an incredibly effective way of reaching the buying committee at the right accounts.
And I think that’s partly why direct mail has adapted to build full platforms to allow you to deliver and get stuff returned. Since everybody’s working from home, a lot of folks have pivoted to virtual gifting and E-gifting so that you can still reach those folks at the buying committee and offer them something of value.
Over the years, content has become so important to everything that we do. This survey that we produced is a piece of content, and we’ve promoted it and had a very strong response to it. People don’t want more bad content; they want the right content at the right time — stuff that genuinely adds value and insight. If you can produce high-quality content, it presents your company as a thought leader and actually helps people make the right decisions.
Something else to point out to folks is that ABM should be multi-channel. I don’t think there’s a single channel that you absolutely rely on as an ABM practitioner since you’re essentially going to be running plays across all of your channels so you’re reaching the buying committee at the right accounts.
This story premiered on our sister site, DemandGen Report.