When people hear the acronym “ABM” or the term “Account Based Marketing”, they are either instantly energized and excited by a business practice they wholly believe in, or they recoil from the prospect of disrupting their tried and true lead generation practice.
On the other hand, industry pioneers, evangelists, and advocates preach that B2B businesses must adopt an ABM approach or risk becoming overcome by competitors.
If anyone ever tells you that moving to an ABM business methodology means that you need to abandon your lead generation efforts entirely, they are misleading you (no pun intended). Let’s define lead generation as the practice of raising interest in prospective buyers, users, and decision-makers to the point that they will “raise their hand” to let you know that they are considering a purchase of your product/solution. With that definition, it becomes impossible to operate a business without lead generation.
So, why are ABM evangelists persuading you to abandon lead generation? Because they are defining it differently. They define lead generation as advertising and promoting your solution widely, in an open market, with the hope that any qualified prospect will “raise their hand” to let you know that they’re considering a purchase of your solution. And that’s the problem: differing definitions. By this definition, it’s clear to see where there can be a lot of waste and inefficiency. Broad-based advertising gets expensive very quickly. Even the largest B2C brands recognize this and are always looking for ways to get more targeted.
We can reconcile these two concepts by creating a new terminology called “Targeted Lead Generation”, or TLG. TLG is defined as “the practice of advertising and promoting to people and organizations that have the strongest potential to be interested in your product or solution.” With this model, we are still aiming to generate leads, but we are removing the inefficiencies and waste that come with an unrestricted approach. With TLG, marketers who have relied on a strong lead generation model can continue in their practice as usual, while account-based marketers can support the underlying principles.
ICP and Target Account List with TLG
Most organizations can agree that they would benefit from being more targeted in their approach to marketing and sales. The logical next step is to develop the targeting criteria. This is often the area of operations that causes the most strife with marketers. It is in this stage where the prospect of “losing a potential customer” rears its ugly head. When an organization defines their ideal customer profile (ICP) and target account list, they inevitably realize that there will be some prospects who will no longer be reached.
Every company goes from having a potential of infinite customers to a real, finite number. And that can seem scary. But if you really think about it, most of those customers were never going to do business with you in the first place. You were always operating with a fixed target account list, whether you wanted to or not. To validate this, go back and look at your company’s most recent market assessment. You’ll notice that your market is not infinite. And that definitive number changes, of course, over time as accounts enter and leave your market, or you product/service development warrants new customers.
Inbound vs. Outbound with TLG
ABM relies heavily on an outbound sales process. For organizations that don’t have an outbound sales team, the thought of adding an entirely new department or sales function can appear daunting. The reason that ABM organizations rely on outbound is twofold.
- It works. They have amazing success with proactively engaging best-fit accounts and entering the sales process earlier, rather than waiting for prospects to self-select by filling out a form or responding to an email.
- It’s efficient. Since they’re working off a finite target account list, it’s possible to tier these accounts and prioritize outreach.
The good news, is that with TLG, organizations that aren’t ready to spin up outbound will still find immediate improvements with their inbound model. But the metrics need to change. Instead of tracking total leads generated, the new metric needs to become total targeted leads generated. It should be noted that the TLG count will always be smaller than the traditional lead count. That’s where the additional ABM metrics will show you that the TLG leads will have higher conversion rates throughout the funnel, and an account-based approach will yield more revenue.
And remember: when all is said and done, the goal is to drive revenue for the business, not leads.
Tiered Account Strategy with TLG
With a typical lead generation approach, there isn’t too much of a need to have a tiered account strategy because, for the most part, all accounts are treated equally until a lead is identified and an opportunity is created. Your website, display advertising campaigns, and other marketing tactics will be the same for every company that stumbles upon your brand.
There are some lead-based organizations that will allow for top-tier targeting of strategic accounts, but that’s generally the extent of it. With ABM, the tiers are far more regimented. You typically have less than 50 Tier 1 accounts. These accounts get extra special treatment like 1:1 promotions, proposals, and advertising. Tier 2 accounts are in the 10-200 range. Tier 3 accounts are in the 100-10,000 range. These numbers will be unique for every business & industry, but the methodology persists.
For many B2B teams, it can seem terrifying to go from a quasi-infinite market to something like a total addressable market of 2,000 accounts. TLG solves this issue by creating an ultimate TLG Tier where you can account for your “real addressable market”. So, if there is any way in which a customer could have success with your product/service, they are allowed to live in that bucket. A TLG Tier is essentially your total addressable market with the following efficiencies:
- It removes non-buying organizations (academics, competitors, off-limit accounts, off-limit countries and government agencies, service providers etc.)
- It’s reduced by promoting high value, high fit into Tiers 1-x.
Making the Switch: It’s a Mindset
As soon as marketers can accept that they have a limited (yet dynamic) total addressable market, they can start getting focused and targeted. That targeted mindset is the catalyst of adopting TLG. After identifying the total addressable market, the next step is to define your ideal customer profile. From the ICP and market summary, a company can employ techniques such as behavioral, firmographic, and technographic evaluations to create their target account tiers. With account-based marketing, your revenue model will be more efficient and predictable. After that, even if an organization continues to operate in an inbound methodology, they will reap business (revenue) improvements by focusing on marketing to the account Tiers with an appropriate balance of investment and they’ll see increased revenue as a result.