account based marketing

Account-based marketingFrom Wikipedia, the free encyclopedia

Account-based marketing (ABM), also known as key account marketing, is a strategic approach to businessmarketing in which an organisation considers and communicates with individual prospect or customer accountsas markets of one. Companies such as BearingPoint, HP, Kilroy Travels, Progress Software and Xerox are

reported to be leading the way.[1]

Contents

1 Overview2 Background and differences with traditional business marketing

2.1 The roles of sales and marketing teams2.2 Account-based marketing and the IT industry2.3 Choosing the key account

3 ABM programmes3.1 Programme frameworks3.2 Strategies

4 References

Overview

Account-based marketing has grown since the mid-1990s as a demonstration of the trend away from massmarketing towards more targeted approaches. It parallels the movement in business-to-consumer marketingaway from mass marketing where organisations try to sell individual products to as many new prospects aspossible to 1:1 marketing where they concentrate on selling as many products as possible to one customer at a

time.[2] Account based marketing can help companies to:

Increase account relevance Engage earlier and higher with deals Align marketing activity with account strategies Get the best value out of marketing Inspire customers with compelling content

[3]

While business marketing is typically organised by industry, product/solution or channel (direct/social/PR),account-based marketing brings all of these together to focus on individual accounts. As markets becomeincreasingly commoditised, customers see little or no difference between suppliers and their competitors, withprice as the only obvious differentiators. ABM is increasingly adopted by companies in markets under pressure

from commoditisation [4]

Background and differences with traditional business marketing

Account-based marketing - Wikipedia, the free encyclopedia http://en.wikipedia.org/wiki/Account-based_marketing

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In the marketing of complex business propositions, account-based marketing plays a key role in expandingbusiness within existing customer accounts (where, for example, wider industry marketing would not betargeted enough to appeal to an existing customer). In scenarios where the initial sale has taken several months,it is reported that account-based marketing delivers a dramatic increase in the long-term value of the

customer.[1] ABM can also be applied to key prospect accounts in support of the first sale. For example,

Northrop Grumman, in which it contributed to the completion of a successful $2 billion deal.[5] Account Based

Marketing has been used at Shell to drive $13m deal [6]

Research demonstrates that buyers are looking for their existing suppliers to keep them updated with relevantpropositions, but are often disappointed with this. In UK research, existing suppliers came top of all thedifferent information channels that IT buyers use to look for new solutions but more than 50% felt that

marketing by their suppliers was poor.[7] The research also demonstrates how much easier it is for organisationsto generate more sales from existing customers than from new customers - 77 per cent of decision-makers saythat marketing from new suppliers is poorly targeted and makes it easy to justify staying with their currentsupplier. By treating each account individually, account-based marketing activity can be targeted moreaccurately to address the audience and is more likely to be considered relevant than untargeted direct marketingactivity.

The roles of sales and marketing teams

ABM is a strong example of the alignment of sales and marketing teams.[8] In the aligned model, organizationsable to unite tactical marketing efforts with defined sales goals and use feedback from sales to identify newpotential markets. For ABM to succeed, joint workshops and a close working relationship between sales andmarketing are essential.

Marketing will also take an increased role in developing intelligence on key accounts as proposed by Peppersand Rogers (1993): When two marketers are competing for the same customers business, all other thingsbeing equal, the marketer with the greatest scope of information about that particular customer [] will be the

more efficient competitor.[9]

Account-based marketing and the IT industry

Organizations which are seeing the greatest current benefit from account-based marketing are IT, Services andConsulting companies. With complex propositions, long sales cycles and large customers, these organizationsare ideal candidates for the approach. It is, though, spreading into other sectors and a benefit can be seen to be

an increased return on time (ROT).[10] Many suppliers have woken up to the fact that the revenues of some oftheir customers exceed the GDP of some nation states. They are changing the amount of their resourcingaccordingly.

Organizations supporting sales and marketing efforts in the IT industry including the Information Technology

Services Marketing Association (ITSMA),[11][12]The Marketing Practice[13] and VAZT Global, Inc.(VAZT) [14]

have developed a great deal of the intellectual capital and practical tools shaping the direction of ABM.

The first to codify the trend was Bev Burgess when she was European MD of ITSMA. She co-created theapproach with organisations like Fujitsu, BT, HP, and Accenture. Others have adapted it and modified it since.

Choosing the key account


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Key accounts are accounts that are identified within organisations as being a focus for account-based marketing.Not all accounts meet the requirements to be designated as a strategic or key account and organisations need tobe careful about which accounts to focus on for their account-based marketing efforts or risk losing a valuableclient. When choosing, organisations should look at revenue history, account history, margins and profitabilityas well as the viability that the client in question would be interested in a long-term relationship. Lastly, askingwhat the client and the company have in common helps in solidifing the approach that the client cannot find thiskind of service anywhere else.

There are also some red flags that help recognize that a relationship with a key account is about to change:.[15]

business that regularly would have come to your company goes elsewherea re-organisation within the company forces a change in relationshipboth involved companies arent seeing ROI from the relationshipmutual goals are not achieved.

ABM programmes

Programme frameworks

There are a number of different frameworks for account-based marketing campaigns but, in general, thefollowing approach is used:

Create the strategic framework: methodology for selecting the accounts that will be focused on andframework of objectives and measures for the ABM programmePlanning workshop: joint marketing and sales session around each account to agree goals and exploreunderstanding of the account and relevant propositionsRequired research: marketing activity to build a more complete picture of the structure of the targetorganisation and its requirementsCreate plan: bringing together existing corporate marketing activities with new account-specificcommunications to achieve account-specific goalsExecute: build a joint sales and marketing team to deliver on the planReview: apply measures such as the value of sales, amount of potential revenue in the sales pipeline,coverage of communications in the account, perception-shifts or appointments made

ABM framework Example Account selection: Opportunity sizing & Propensity Modelling Planning and insight:Account research and profiling Messaging and propositions: Account vision and Propositions Content andcommunication: Content, Digital Media and marcomms Execution and engagement: Campaigns, events andseminars

[16]

Strategies

In terms of specific marketing activities that form part of account-based marketing programmes, the followingprovides a basis for selecting the appropriate tactics for any specific account

Intelligence marketings role in profiling the target account and contacts within it to identify relevantpropositions and communication preferencesAwareness in target accounts where awareness of the supplier is low, regular communications have a


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role to play in creating a more favourable perceptionCampaigning in large target accounts, lead generation campaigns can be run to uncover opportunitiesand appoint meetings. This can also be combined with a digital pipeline marketing campaign targeted tothe chosen companies.Sales marketing has a role to play in supporting sales bids to improve conversion rates and shorten thesales cycleAdvocacy the cycle is completed when customers become advocates and are used to drive furtherincremental business

References

Account-based marketing: How it can help your company improve demand, awareness and profitability(http://www.dmnews.com/Account-based-marketing-How-it-can-help-your-company-improve-demand-awareness-and-profitability/article/98038/)

1.

Peppers and Rogers; The One-to-One Future (1993); Page 232. Infographic from Momentum ABM (http://www.momentumabm.com/quick_guide)3. Account Based Marketing Blog (http://www.momentumabm.com/blog/avoid-the-commodity-trap-with-abm/)4. How Northrop Grumman Used Account-Based Marketing to Win a $2B Deal (http://www.itsma.com/article/northrop-grumman-win-2billiondollar-deal/)

5.

Momentum ABM's case study (http://www.momentumabm.com/case_studies#shell)6. The Marketing Practice's Decision-Maker Index research into account-based marketing perceptions(http://www.themarketingpractice.com/research)

7.

Kotler, Rackham and Krishnaswamy; Ending the War Between Sales and Marketing (2006) Harvard BusinessReview

8.

Peppers and Rogers; The One-to-One Future (1993); Page 1409. Demand Generation, Increased Return on Time (https://www.youtube.com/watch?v=Rp8IN1tnZsU), video.Published 15 July 2014, Retrieved 13 October 2014

10.

IT Sales and Marketing Association (http://www.itsma.com)11. Momentum ABM (http://www.momentumabm.com)12. Account-based marketing campaign template (http://www.themarketingpractice.com/practices/account-based-marketing.php)

13.

Building relationships with key accounts (http://www.salesalignment.com/acm.pdf)14. "Fast Forward: Choosing and Working With Strategic Accounts" (http://63.135.117.94/kc/getitem.aspx?key=iqpvQ2kx56Kw2xBSFLWAVGDfUQwTLoQYdmI42zgYda4PULMLp7DQOUs4guJDVlAF&filename=SPJ.Print.0606.pdf&profileid=000000000003F169&f_page_source_title=Strategic+Account+Management&vip=) (PDF). Retrieved 2009-02-11.

15.

Reference ABM Framework from Momentum ABM (http://www.momentumabm.com/what)16.

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