Account-Based Marketing (ABM): A marketing strategy to increase ROI for B2B businesses
- According to Markets Insider, the global ABM market size is expected to grow from USD 651.9 million in 2018 to USD 1.196.9 million by 2023, at a Compound Annual Growth Rate(CAGR) of 12.9%
- The need for ABM in larger companies is growing because they want to increase customer retention for increasing sales revenue
- Increase in retention even by small percentage increases profitability for companies. According to Gartner, a 5 % increase in retention can grow profitability by 25% to 100%.
Why ABM for B2B businesses?
ABM has become very crucial in the B2B marketing space because the pressure on revenue is increasing yearly or quarterly in these companies. Similarly, competition is rising and customer expectations for products and services continue to heighten. Market is being dynamic in this global world where the acquisition, retention and sales revenue goals are very difficult to catch up over a long period. Organizations believe that sales and marketing still have rooms to improve to generate high-stakes revenue. Sales have been traditionally more directly related to the growth of companies while marketing deals with an indirect approach to increasing sustainability in businesses. ABM is thought of as a one-to-one approach instead of a one-to-many approach. According to Forbes, ABM is typically used in enterprise-level brands with more than 1,000 employees to help teams through collaboration.
The importance of ABM in today’s competitive business world includes:
- Personalized messaging: ABM provides platforms for marketers to create more personalized messaging for specific groups of individuals. It approaches a specific account and spends much time and effort in creating relevant content. This ultimately adds value to the customer. Customers are more satisfied if they are given special attention, nurture and care.
- Faster sales Process: Purchase decision involves multiple stakeholders. The longer decision process could often slow down the typical sales and marketing process. On the other hand, ABM is such a powerful tool that helps to cover this loss. It gives an opportunity to specifically guide the primary decision maker along with all relevant prospects. This helps to facilitate and expedite the sales process.
- Cost efficiency: Marketing directly to your targeted customers is extremely cost-efficient. This is more relevant if the businesses are using powerful social media as tools to focus on particular companies or organizations. Those B2B businesses who precisely know their target customers, ABM helps to increase profitability. In simple words, it makes a tremendous amount of sense from the budget perspective.
- Effective use of marketing resources: ABM structures on key marketing efforts to drive major customers. This narrow focus optimizes the most valuable resources of the company: time and money. Sales and marketing integration helps businesses to focus on the marketing team who work directly with sales to target and develop contents for key accounts. On the other hand, they build a successful communication channel with sales.
- Trust-based relationships: The use of ABM increases inventory turnover eliminating unqualified prospects early in the game.ABM allows businesses to actively communicate with customers by providing information online. Blogs, whitepapers, videos and social media helps to increase accessibility on quality information. In this way, customers learn to trust companies. Once, trust is built, a relationship is formed which in turn leads to sales.
However, many marketers do experience challenges that prevent them from reaching the full potential of ABM in their organizations. The top 5 ABM challenges include:
- Personalizing and tailoring their marketing to the key contacts at each account. The task is much more tedious and time-consuming.
- Tracking and measuring ABM result and its effectiveness on the marketing strategy.
- Lack of budget to support programs and resources
- Developing a campaign that is mass customizable to allow the scale
- Lack of experts in the related field and education on marketers regarding the value of ABM
Major Areas of investment for companies with the most effective ABM strategies:
|Areas of investment
|Technologies for analytic
Source: Markets Insider