The CMO vs Demand Practitioner Approach to ABM

This afternoon I attended "Decoding the Roadmap to Account Engagement," a happy hour sponsored by Salesforce Ventures, Costanoa Venture Capital and ABM tech ZenIQ. Listening to the esteemed presenters at the event - CMOs and VPs of Marketing from organizations including Bloomreach, Demandbase, Gainsight, Salesforce, among others, it became increasingly clear to me that there are two very different sides of the ABM coin, and not everyone agrees on which is the right way to ABM.

Which Came First, The List or the Account?

There are hundreds of marketing technologies focused on helping marketers and account execs get through the clutter of a potential sales universe to focus on the right buyers - but those technologies are hit or miss depending on where your company is in its growth and how much your past customers can/should predict your future customers. Most predictive technologies leverage your database to help provide these answers while others turn to intent information from third parties. Even these methods in sourcing the right target account list are imperfect. As Gainsight's VP of Marketing shared in a presentation, his marketing team hand crafted a custom list of 5000 accounts for their target list. Other panelists shared that their target list may be 30 accounts at any given time.

What becomes increasingly unclear in this semi-new world of ABM is at what point in the funnel marketing should hand off leads to sales. In the cases above, marketing is deeply involved much deeper in the funnel, in many cases either managing a full sales development team or blurring those once clear lines between sales and marketing. While this is actually a positive - I always thought it was ridiculous for sales and demand marketing to be considered separate divisions since both track to the same ultimate revenue goals - you can easily make the case that Account-Based Marketing is actually just a glam squad to support your AEs as they try to go after targeted accounts and close business. 

Why Invest in Target Account (List-Based) ABM?

In many cases, there can be great value to marketing focusing on target list-based ABM. This especially holds true in organizations selling to large enterprises. According to Gallup, a large enterprise (defined as a company of 1000 or more employees) typically has OVER 34(!) people involved with the procurement process for B2B products and services. Account Executives don't have the tools or resources to effectively sell to 34 people at one organization - that would be nearly an entire quarter's worth of resources (talk about inefficient.) Sales has always been and will remain a 1:1 relationship with a targeted buyer and perhaps a handful of key influencers. Marketing's role is to determine what on a large scale will help generate revenue, and which levers to pull in order to drive pipeline and closed business. 

(*Note - as one commenter pointed out this data from Gallup is very old. In fact, it's from 1982. I'm keeping it here because while business has changed over the years, the number of influencers in a purchasing decision has not shrunk. If anything, given the rise of digital technologies, most purchases actually effect even more people across a company, and more people are aware of these purchasing decisions before they happen / have access to information about various products and will make sure the buying lead knows their opinions. I'm looking for more updated data on this topic, but have yet to find anything, so leaving this in.)

In the case of marketing to large businesses, B2B Marketers have an opportunity to help secure sizable deals by leveraging an ABM model. Of course, marketing resources are limited, therefore technologies like Demandbase, ZenIQ and Engagio are essential to scale ABM. Otherwise you and your marketing team will spend the entire quarter creating campaigns for one or two organizations and their 34+ buyers each -- with a large marketing team you can have an ABM division dedicated to a target account list (which may or may not be the same as sales' target account list depending on if you can garner better predictive insights or seek to test out new markets.)

But... this model of ABM is really just what I like to think of as "fancy sales." If your marketing team is responsible solely for generating net new pipeline, you may be less inclined to dedicate a huge chunk of your resources to engage a few accounts, even if there's a chance they'll turn into huge deals. You may prove out that the CaC over time is low based on this model, but unless you're slaying it in pipeline organically you're taking on a lot of risk. For companies that know their target market to a T and have a very limited number of customers to sell to this method may very well be in fact extremely successful. For the rest of us, the risk becomes too large for a marketer to take on. This is the type of risk traditionally held by sales which is account-based by default (there is a reason marketing and sales compensation structures are designed very differently based on that risk.)

We may say "fishing with spears" is better than "fishing with nets" in the new ABM world, but I prefer to fish with a net and when I notice a bunch of the same type of fish are biting then - and only then - do we grab a spear.

In other words - for the practitioners reading this post - I think a "Marketing Qualified Account" is much more valuable than a "Marketing Qualified Lead." This is especially true in an organization which sells to one key buyer (i.e. Head of Engineering, Head of HR, Head of Marketing, etc) vs multiple buyers. In the first case there is one buyer but then there are all those influencers which still can make or break the decision to purchase. It's up to marketing to ensure that all influencers, not just the primary buyer, are engaged.

A Different Approach to ABM

What stuck me most at the event today is how differently I approach ABM compared to other CMOs and VPs of Marketing. Working for a fast-growth startup as head of marketing, I not only drive marketing strategy, but also am deeply in the weeds of operations management and co-managing our database. I witness first hand companies being "worked" by sales that are (not on purpose) simultaneously being marketed to under another person's lead alias with no connection or cohesive marketing story between the two. It's just not possible as part of the standard Salesforce CRM database architecture. The funny thing is that it's clear Salesforce was designed for Account-Based Sales, and marketing was an after thought. Lead object types, completely disassociated with account objects, make it impossible to properly understand or market to a true account (aka a "company.") Tools and workarounds exist to hack solutions for this, but fundamentally the most popular CRM for B2B doesn't support this model. It's a problem.

Furthermore, while CMOs of fast-growth organizations discuss ABM as an approach to throw cash at a few key already-identified accounts, as a dual strategist and practitioner, I look at ABM as a solution to identify potential clients based on both company demographic data AND behavioral data across that company (from both leads and contacts.) The example I always like to give is that it is much more interesting to me if 5 people from company X opened an email and visited our website in the last week, than if one person downloaded an eBook. Since even in companies of 100-500 employees there are 6-7 buyers, per the Gallup study, it is highly valuable to able to identify when multiple buyers from the same organization are engaged with your brand or marketing assets. This is a different kind of ABM, and the kind that I think is the most powerful and valuable for organizations seeking to fuel sales with the most qualified prospects.

The world of ABM is still very young and more marketing technology firms old and new come out with ABM solutions by the day. However, it's important for us as marketers to step back and understand the full potential of ABM before we limit its potential by saying it's only about creating custom content for target accounts. This may very well be "ABM," but there is so much more to this new type of marketing that we're only starting to explore. The more we can leverage data and automation tools to understand our buyer behavior with an account-centric lens, the better off we'll be in generating revenue for our growing businesses.