We’re on a roll with the movers and shakers of the Account Based Marketing (ABM) movement! We had a chance to sit down for an interview with Jon Miller, CEO of Engagio and one of the primary drivers of the global shift to an ABM strategy. It’s always a pleasure to hear thought leadership straight from the source, and we’re excited to share Jon’s wisdom with you.
Read on for an in-depth discussion about ABM and applying it to your organization. And if ABM is high on your to-do list for 2016 (and it should be) make sure you sign up to attend the ABM Online Workshop happening February 23, 2016.
How and when should organizations begin implementing ABM strategies?
First of all, it’s a question of “if” a company should implement an ABM strategy. That’s probably the best place to start. At Marketo, I was one of the people who helped to pioneer and evangelize the traditional inbound demand generation model. Inbound demand generation is amazingly effective, and cost effective, when it’s done well. Especially for that core SMB, high velocity, low price point deal, it’s still the right strategy.
What I’ve found is that where inbound demand generation stopped working was anytime you have a specific set of accounts you want to reach. The analogy I use is that regular demand generation is like fishing with a net. You don’t care which specific fish you catch, you just care if you caught enough fish. But let’s say you’re a company, like Guidewire, a client of mine that sells property and casualty insurance software. They have 1400 companies worldwide that would ever be a customer. The other classic example is Boeing; they only have a few hundred companies that could be a customer.
At Marketo, the demand generation process worked well for our corporate and mid-market businesses, but it didn’t work well for the enterprise businesses. It also didn’t work well for our cross-sell/upsell customers.
What all of those have in common is a specific list of accounts you want to reach. So, when you have a named list, you don’t wait around for the right person from the right company to swim into your net. You need to find a way to reach out and engage those people.
For companies that have higher ASPs, higher price points and/or the specifically targeted lists, those are the companies that should be doing ABM. Companies that don’t have that don’t need to do ABM. And then there are companies that span both sides of that. If you’re on both sides, make sure you’re using the right fishing gear to go after the right kinds of fish.
By far and away, the first thing you have to do is define and align on who are target accounts and what tier each account goes into. What I mean by that is that you can have different levels of ABM investment for different kinds of accounts. The classic tier 1 ABM is what the ITSMA has been preaching for ten years. You treat each account as a market of one. You would go and create a specific account plan for your named account, and develop specific content and run account-specific campaigns. What the ITSMA showed is that can be incredibly effective, and in fact represents the highest ROI for B2B marketing activity that there is. But it doesn’t scale well. You can only pick a handful of accounts that you can go that deep on. And so you pick and align on the few accounts that get that true tier 1 level of effort.
Then you can have a tier 2, which is picking individual accounts but lower level of research and personalization. And then you may have a set of tier 3, which all the other accounts you could go after.
I think tier 1s are going to count pretty low, ten to twenty at most. Tier 2 probably counts in the low hundreds, and then tier 3 in the thousands.
The key to get started with ABM is having sales and marketing aligned on which are the target accounts, which go to which tier, and then most importantly how much resource sales and marketing put into each tier and how much revenue you expect to get out of each tier. You don’t want marketing putting half its efforts into tier 2 accounts when sales is expecting to get 20% of its revenue from those accounts. Defining of target account lists and aligning on it is foundational. Do it first.
Do you think organizations are better served with incremental roll-out, or should they be looking for a complete overhaul?
I’ve seen both approaches. I think the incremental approach is generally advisable. Start with picking a handful of accounts, tailor the content and approach for those. Prove the concept for your organization.
But, I’ve seen a handful of companies are set for accounts only. That’s a lot of work, but the companies that are doing it are going to see good downstream impacts in terms of a better capability to reach the people that you want.
The other thing I’ll say is that it’s not all in either way, ABM or demand generation. If you have a large number of potential accounts, the best approach is to use a mix. You should use the full ABM effort to target and engage your top 100 and then do traditional demand generation to make sure you’re covering everyone else. A lot of it depends on the specifics of your business.
If you’re only selling large complex deals to named accounts, then you should go all in with ABM.
What are some best practices for integrating ABM with your sales strategy?
First of all, I would say sales has always been account based. Sales people don’t talk about how many leads they’ve closed, they talk about the accounts they’ve closed. In many ways, ABM is bringing marketing closer to the model that sales has always used. In general, if you’re using ABM it’s not going to require the sales department to change much about what they’re doing.
The biggest difference in a good ABM organization is recognizing that ABM is a misnomer. Even though it’s called account based marketing, it’s not just a marketing activity. It’s a way of generating revenue with sales and marketing working together. At the best organizations, each account has a strategy around it for how you’re going to achieve your goals in that account. Then, marketing and sales work in alignment to achieve those goals. And that might mean sales being involved very early in the process, or marketing being involved very late in the process.
So, the best practice, I’d say, is to drop the outdated notion of a marketing and sales handoff and think about the best way to achieve the account goals for that specific account.
What about marketing orgs that are using that blended approach? Do you see the need for separate teams focused on ABM and traditional demand gen?
It’s hard to be half-in, spending some of your time on ABM and some on traditional lead generation, especially as a single marketer. If you’re a small organization, you’re going to have to take both approaches because of resource constraints. But at larger organizations, you could definitely use split teams for ABM and inbound. For example, you could set up an enterprise team that is focused on ABM for your named accounts, and an SMB marketing team focused on that traditional demand generation. It makes sense to take this approach if you have the resources, because the mechanics of execution end up being so different.
What specific tactics would you recommend for executing ABM campaigns? (For example, digital display ads, email, mail, social, website personalization, etc.)
There’s a palate of channels that you use. This is thoroughly addressed in Section 5 of The Clear and Complete Guide to Account Based Marketing.
A lot of companies are testing account-specific advertising, particularly CRM retargeting and IT-based targeting. So you’re basically showing your ad to the account you care about. That’s cool, because it helps to create awareness. Ads are part of the palate.
Web personalization plays a role. If one of your target accounts hits the website, why not personalize the website to give the contact a good, relevant experience based on all the insights you’ve built?
Direct mail plays a big role, and we’ll get to that soon. But you have to remember that the whole point of ABM is that it’s spearfishing. You have to reach out to the right people at the account. That means outbound channels like direct mail.
A lot of companies use events as part of their ABM palate. They will set up meetings in and around big events, as well as smaller private events like dinners and seminars.
Lastly is the human element. Your sales rep or SDR is sending email, and while that’s usually done through Outlook or Gmail, there are ways to use technology to make that more relevant and more scalable.
All those tactics play a role. The challenge that marketers face, and the opportunity for Engagio, is the orchestration of all these tactics together to actually achieve your account goals. As an example, your ads run 2 weeks, then you drop the direct mail piece. As soon as that happens, you kick off a series of emails and calls from your account execs. That kind of process, an account-centric play like that, is too hard today and we’re working to make that easier.
How do you see direct mail being best utilized in ABM?
I think it’s most commonly utilized as door opener at cooler relationships. As a marketer you’re trying to get in the door at this account, you don’t have email permission, so how do you break through the clutter? Even if you do have email permission, people get hundreds of emails a day. They probably get one or two packages a week. So direct mail is a really good way to break through that noise.
Because account lists are more targeted, especially for tier 1 and 2 accounts, you’re not going after that many accounts. The economics of sending very high-end mail pieces can really make sense.
We talked to one customer who sent their top 50 accounts (CIO) an iPad. On the iPad there was a pre-recorded, custom video specifically directed to the recipient. That approach made sense because there are only 50 accounts, and each one is worth upwards of $1 million if it closes. So when it’s a focused list and big potential deals, you can do some very cool things with dimensional mail.
Another example is the campaign where a company mailed a cool remote control car to target contacts. The letter accompanying the car basically said if you want to get controller, take a meeting with our sales rep. It was a little nicer than that, but that was the gist of it. And it worked really well, as they got a lot of meetings.
Again, it all works on specifics of the target list, having a narrow definition of the target list. And having good data quality, doing the work to make sure that when you send something you send it to the right person.
What technology stack do you see as critical for successful ABM implementation?
Well, the critical thing you need is the ability to look at your accounts in a holistic way. The challenge is that you have marketing automation tools, like Marketo and Eloqua, that are lead and person centric. You can see a list of leads and people, but you can’t go in and look at accounts. In Salesforce, you can look at accounts but leads don’t tie to account objects. So it creates a real challenge when you want to look at the accounts. So I think the critical tech piece is that ability to match all the people to the right accounts and look at the data from a complete account perspective that accounts for all the contacts. Engagio does this; it’s called lead to account matching and it’s the most important part of ABM.
Everything else within the technology stack is about making ABM work better. Can you place ads, send emails, direct mail without the technology? Sure, but the technology makes it work a lot better. There’s a great overview, called the “ABM Market Map,” on page 116 of the Guide. It shows all the pieces of the ABM process and the vendors who excel in each category.
What are the technology components that get you excited?
It’s probably too long an answer for this. That’s really an article in itself.
What are the new metrics for ABM? Are there new ways to measure success, or should marketers and sales professionals rely on the same KPIs they’ve been using?
The way we’ve been measuring marketing, the demand generation way to measure (which is counting leads and opportunities that marketing creates), doesn’t go away in ABM. But, those metrics are not sufficient to measure what’s really going on.
At the core, let’s say you only have 200 accounts that you’ve picked. It’s much less a question of “How many leads did I generate?” and much more a question of “How well am I engaging with those accounts? Do I know the right people? Are they connecting with me? What’s the quality of the relationship?”
In ABM you end up needing a set of other metrics that are more about measuring quality, not quantity. You have much less of a concept of marketing vs sales generated deal. Instead, you have more of a world where marketing and sales have worked together to generate the lead/deal. And so rather than assigning or allocating credit, you have more a sense of trying to measure marketing influence. IE when we run these types of campaigns, the deals end up closing faster. That’s a different way of measuring program ROI.
Put it another way – a classic ABM campaign that some people run is to buy ads and send direct mail to current open opportunities. Traditional marketing metrics would ignore that. You’re not generating any new leads/deals. You’re just taking something that sales is working and create the likelihood of winning. So you need new ways to measure ways to measure marketing if you’re going to see the impact of those kinds of campaigns.
That’s why Engagio has five metrics that we’ve come up with for Account Based Marketing. They are:
- Coverage: Do you know the right people in the account?
- Awareness: Do they know who we are?
- Engagement: Are the right people in the account spending time with you, and is it going up or down over time?
- Reach: Are your programs reaching the right people in the account?
- Impact: When you do marketing activities, what impact does it have on outcomes that you care about, like win rate and velocity?
The acronym to remember these is ICARE. For a more detailed overview of these metrics and their application to ABM, download The Clear and Complete Guide to Account Based Marketing.
Where can organizations turn when they’re ready to take the ABM plunge?
Get started on the right path by downloading The Clear and Complete Guide to Account Based Marketing.
What’s the most important piece of advice you’d give to a company starting their ABM journey?
Align your marketing and sales organizations around your target account list and tiers. That’s the foundation of successful ABM.
Remember, you can sign up for the ABM Online Workshop here:
About Jon Miller
Jon is a marketing entrepreneur and thought leader. He is currently the CEO and co-founder of Engagio, an “all-in-one” platform for account based marketing. Previously, Jon was a co-founder at Marketo (Nasdaq:MKTO), a leader in marketing automation.
He is a speaker and writer about marketing best practices, and is the author of multiple marketing books including Engagio’s Clear and Complete Guide to Account Based Marketing and Marketo’s Definitive Guide to Marketing Automation. Jon has a passion for helping marketers everywhere, and is on the Board of Scripted and is an adviser to Optimizely and Newscred. In 2010, The CMO Institute named Jon a Top 10 CMO for companies under $250 million revenue.
Jon holds a bachelor’s degree in physics from Harvard College and has an MBA from the Stanford Graduate School of Business.
Follow Jon on Twitter: @jonmiller