The Account-Based Marketing (ABM) market has hit an inflection point!
That’s the bold claim from Terminus CMO Natalie Cunningham, who argues that B2B marketers have a more demanding job than ever due to a range of challenges, including the end of cookies, the trouble with IP tracking, and, more importantly, the economic downturn and its effect on marketing budgets.
Marketing is facing a revenue impact gap, Cunningham says. Traditionally, marketing has been about leads and contributing to pipeline. But now, revenue value is seen around the entire customer lifecycle, and ABM is prime to support that new focus.
Those companies doubling down on their investment in ABM and target accounts not just to build brand awareness through to pipeline, but right across the entire customer lifecycle are those that will find success, she suggests.
A focus on the entire customer lifecycle
ABM as a practice has focused primarily on gaining net new accounts and building brand awareness. That's still necessary, but it's table stakes, insists Cunningham. To succeed today, marketers need to apply an account-based strategy to their ideal customers across the entire customer lifecycle.
Terminus provides playbooks for the different stages of the customer lifecycle to help marketers build the right plan for each stage. Regardless of stage, the tools and channels can all still apply - email signatures, chat, advertising, website personalization- , but they may be weighted differently or leveraged differently.
The message, however, is very different when you are talking with existing customers. It could be about a new product they didn't know existed, the addition of professional services, or some other type of expansion. You might think this is an area that belongs to Sales - cross-selling and upselling existing customers - but Cunningham argues that marketing is typically the change agent leading the charge, which is why Terminus focuses its effort on helping them be successful.
One question this poses is how does marketing know who are the right customers to focus their ABM strategies on? Cunningham acknowledges that it's something marketing teams and go-to-marketing teams are consistently trying to solve. She offers several suggestions:
- Put an aligned go-to-market team in place - if you disagree on what the customer looks like, you will not focus your efforts in the right place.
- It's less important to agree on the perfect list than it is executing together towards it.
- Data, data, data.
She goes on:
You want to use your own data and look at which of your customers are becoming advocates. What do they have in common? Is it size? Is the industry? Is it the type of products that they came in on and they expanded into? Sometimes it's less about who they are, and it's more about the sales process of what we sold to them and what makes them most successful. Sometimes it's geo or region, depending upon what your product is, that might make a big difference. So let's start there in terms of the actual analysis process.
Cunningham adds that it's also essential to analyze your least successful customers to understand the indicators that point to churn. You'll want to pull back your resources from these to focus more on your best customers.
B2B marketing trends that affect ABM
Cookies will go away at some point, and IP tracking will continue to get more complicated. The answer to dealing with these issues is a focus on first-party data. Cunningham says it’s critical to create distinctive experiences to earn that data across all channels, including new ones like CTV and audio.
Some additional strategies that Terminus uses, include:
- Beyond IP: A new technology that monitors web traffic and scores buying propensity and creates GDPR-compliant retargeting audiences.
- Enriching the CRM with clean contact-level data.
Another trend Cunningham sees is the coming together of ABM and demand generation teams. She sees these strategies as two sides of the same coin - each focused on the same problem - growing revenue - but with slightly different approaches:
- Demand generation casts a wider net and tends to be more top of the funnel, whereas
- ABM strategically focuses on the ideal customer profile (ICP), where you get higher value in long-term investments.
And, then there’s the matter of intent data. Cunningham believes that intent data is important, but it's not enough to close the revenue gap, and it's certainly not a silver bullet. What it is, is an early leading indicator, she says, but it's less critical than engaging with the right people across multiple channels.
What's driving the increased focus in ABM programs?
With the economic downturn and budgets getting scaled back, Cunningham sees budgets shifting more heavily into ABM because it provides the most return. There can be pushback to focus on leads. She suggests marketing could fall back on "our lead-based laurels," so the CMO must have a seat at the revenue table and a strong relationship with the CRO.
How do you do that when marketing constantly has to prove its value within the organization? Cunningham recommends utilizing reporting tools in Terminus and other tools used to drive revenue and talk about the impact on customers who have engaged with their programs. Then, bring those reports and stories to executive meetings and continually drive conversations based on the data.
Marketing leaders need to have the backbone to have the hard conversations with the CRO about the role marketing plays, she argues. Sometimes that might require bringing the CEO in, she said. Or it might require focusing on short-term wins to gain runway for other things:
I think a key point here is we're seeing those customers that double down on their investment in ABM, and by that, I specifically mean their investment in engaging target accounts. Not just at brand awareness and not just through pipeline. Those that are focusing their investments across the entire revenue flywheel, the full customer lifecycle, and trying to squeeze as much juice out of each of those stages as they can.
The most important thing, she concludes, is to focus the narrative on the value of marketing as a partner in driving revenue:
Those are the ones that are continuing to have the seat at the revenue table while we're under budget scrutiny. Those are the ones that are able to maintain their media budgets, that are able to maintain marketing as a revenue engine within their organization. And that does require the type of marketing leader that is willing to have the tough conversation with a CRO and a CEO and not get pushed back into leads and MQLs as the only thing that matters. That, I think, is the big change that we're seeing right now. People that are willing to lean in and talk about revenue and have those business conversations, build their programs to be successful around revenue, not just pipeline.
It shouldn't take a downturn in the economy to get clear on the need for marketing to focus on the entire customer lifecycle, and for some companies, it hasn't. But for many, ABM is still focused on acquisition, and that will be a challenge as budgets get slashed. And for many, marketing doesn't get involved past filling the pipeline.
But there is good/interesting news for marketers. Latané Conant posted on LinkedIn that she sees an uptick in searches for CMOs. This may present an opportunity for marketing to play that deeper role across the customer lifecycle.
Cunningham sees this too. She thinks we may be at a tipping point where the CMO is becoming a business person at heart who happened to come up through the marketing department:
They're going to be someone that is looking at the success of the organization first and marketing as the tool to get there. I think we've had the era of the brand CMO; we've had the era of the demand CMO. I think where we are today is we need someone that can connect all of those dots to make the brand impact the demand engine in the way it needs to, the demand engine to tell the brand story in the way it needs to, and connect all of that to business results that matter to a board a CFO and a CEO.
ABM is a strategy that can work for marketing today, supporting the entire customer lifecycle, bringing together marketing, sales, and customer service, in a way that delivers on that consistent, seamless experience customers need.