Haven’t you heard the term “ABM (
Account
Based Marketing)” a lot lately? We know that it is different from traditional marketing, but what does it mean? I think there are many people who don’t really understand what it is.
You may also be wondering how it differs from previous marketing methods and why it is currently attracting attention. Therefore, this time, I will explain AMB in an easy-to-understand manner.
What is AMB?
ABM is an abbreviation for “Account Based Marketing” and is a marketing method that has been implemented in the United States since around 2013. It started attracting attention in Japan a few years ago and is now spreading. It is said that there are companies in Japan that have achieved this success.
What kind of method is ABM? Let’s look at each of its features one by one.
Not based on “people” but based on “companies/organizations”
“Account” refers to a “company” or “organization.” In other words, it means a marketing method based on companies and organizations.
In traditional marketing methods, the mainstream was lead generation and lead nurturing, which targeted a wide range of prospective customers and gradually nurtured them until they led to business negotiations. In other words, in the past, we focused on potential customers and one person in charge. Of course, in the case of BtoB, the prospective customer is a company, but the person who actually accesses the web or obtains the e-mail newsletter is a person in charge of a department or department within the company. I approached the person in charge and handed it over to sales.
On the other hand, ABM is not based on people, that is, targets are not “persons in charge,” but are account-based from the beginning, that is, “companies/organizations.” Clarify and identify accounts that have the potential to become good customers and maximize sales.
We will then focus on the needs of those targets and approach them strategically.
Approach specific companies and organizations from the beginning
Another major feature has emerged here. That means “targeting specific accounts (companies) from the beginning.” Traditional methods approach a wide range of potential customers. This approach was to narrow down the target to some extent and cultivate leads who showed an interest in the company.
On the other hand, ABM is characterized by determining a specific account (company) from the beginning and approaching that account.
take an organized approach
The approach is very strategic, and I will explain the method in detail later, but the approach method also has its own characteristics.
This means that the approach should be taken not only by the marketing department but also by the organization.
For example, it means that sales, marketing, service departments, executives, etc. all work together in an organized approach to achieve the business goals of the account (company).
Understand accounts (companies) and use data to provide optimal problem-solving methods
ABM is also characterized by providing content that is optimal and valuable for the account (company), in other words, it provides the optimal content that solves the management and business issues of the account (company). This allows for a more efficient approach, as it solves the issues unique to each account (company), rather than the generic content that was previously provided to prospective client companies.
To this end, the “organized” approach mentioned earlier is important. In order to provide valuable content and messages that can solve the problems and needs of target accounts (companies), it is extremely difficult to first understand the accounts (companies). Therefore, data management, which involves centrally managing the company’s information and making use of it, is extremely important.
Why ABM has started to attract attention and why it is necessary for Japanese companies
ABM is said to have emerged in the United States to solve the problem of “demand generation.” Demand generation refers to the general marketing methods mentioned above for acquiring potential customers. For example, lead generation for acquiring potential customers, lead nurturing for nurturing potential customers, and lead qualification for narrowing down potential customers. The process of creating potential customers, nurturing them, and handing them over to sales has been practiced in the United States as well.
However, a problem arose in that the sales department did not approach all of the leads. This means not negotiating with companies based on the leads you have cultivated.
ABM emerged to solve that problem.
Why is it necessary for Japanese companies? There are various theories, but it is said that this is a long-standing practice in Japan, where only vertical connections are emphasized within an organization, and horizontal connections are weak. As a result, it often happens that the company you were planning to approach is actually already a customer in another department. ABM avoids these problems by taking a methodical, integrated approach to all data. In fact, by working together, it may be possible to take a more meaningful sales approach.
Also, the reason why ABM has started to attract attention in Japan is that data management, which is essential for ABM, has become easier to perform. Simply put, ABM is easy to implement for Japanese companies that have data from MA (marketing automation), SFA, CRM, etc.
Against this background, ABM is becoming widespread in Japan.
Difference between ABM and demand generation
Let’s take a closer look at the differences between ABM and demand generation.
1. Difference in target
ABM targets accounts, or companies or organizations, while demand generation targets leads, or people. In many cases, ABM targets large companies among existing customers. On the other hand, demand generation focuses on new customers. Therefore, ABM is naturally suitable for expanding existing business, while demand generation is suitable for new business.
2. Differences in practice content
ABM takes an approach that narrows down and targets specific accounts (companies) from the beginning and provides the optimal content for each company. On the other hand, demand generation involves acquiring leads and prospective customers, nurturing them, and handing them over to sales when they are ready to be converted into business negotiations.
Demand generation is based on collecting as many potential customers as possible, and cannot be implemented without a large number of potential customers. On the other hand, with ABM, quality is more important than quantity.
3. Differences in who does it
ABM is carried out organizationally, but primarily by sales and marketing departments. On the other hand, demand generation is mainly carried out by the marketing department.
In this way, ABM and demand generation seem to be different things, but it is said that ABM can actually only be implemented if there is a demand generation mechanism. In other words, it is difficult to suddenly implement ABM in terms of structure and cost. To implement ABM, the presence of a large existing company is required to some extent. It can also be said that we need the track record and data we have cultivated in demand generation. In other words, it is necessary to first establish demand generation in order to implement ABM.
The relationship between ABM and inside sales
In recent years, inside sales has become mainstream in Japanese companies. Inside sales refers to in-house sales, and is a method of communicating with prospective customers via telephone, email, etc., and handing over highly likely leads that will lead to orders and contract closures to sales.
In ABM, the presence of inside sales is essential. This is because in ABM, it is necessary to strategically provide the optimal content for the issues and needs of the account (company) and lead to problem solving, so it is essential to collect as much information as possible in advance. Because there isn’t. In other words, companies that have already conducted inside sales can become target accounts.
Inside sales are also important when determining whether to include an account as a target account for ABM. I will tell you the steps later, but you can use information called “BANTC” to determine whether an account can be a good account for your company.
This information includes information such as whether there is a budget, whether there is authority, whether there are needs, etc., so the information must have already been collected by inside sales.
For these reasons, it can be said that inside sales is an essential part of ABM.
Steps to implement ABM
Now, let’s take a look at the steps to put ABM into practice.
1. Account (company) selection
First, select the target account (company). At this time, it is important to decide on priorities among the many candidates. Clean up your customer list, organize, analyze, and prioritize the information you collect.
At this time, the standard is “BANTC”.
BANTC is information obtained by inside sales. Generally speaking, this is information that should be asked by sales personnel.
Badget
Asking about the budget is also essential in ABM, as customers won’t buy without a budget.
Authority
Refers to the person who has decision-making authority. By identifying the people you really need to interview, you can carry out sales activities more efficiently.
Needs (needs/interests)
Account (company) needs. Knowing what you are looking for and what kind of problem you want to solve is absolutely necessary for ABM to be successful.
Time frame
The schedule of when to apply for a budget and when to get a contract is very important. Depending on the timing, you may not be able to sign a contract right away.
Competitor
Competitors are companies that market to accounts (companies) in the same way as your company. We need information such as which companies are approaching us, who is visiting us for sales, how often, what kind of proposals are being made, and are there any points we are evaluating?
Based on this information, we will select the accounts (companies) that will bring the most profit to our company and prioritize our approach.
2. Information survey of key persons/involved in implementation
Once you have selected your account (company) targets, the next step is to identify the key people in each company. Get information about the people most involved in the decision to adopt your product or service.
In addition to approaches by inside sales over the phone or email, there are other ways to obtain information, such as holding seminars and exhibitions, sending DMs, and extracting information through people you already have contact with.
3.Get in touch with key people
Once you have identified a key person, think about and implement a method to get in touch with that person. You can either approach the person you already have contact with, or you can obtain business cards through seminars and exhibitions, or you can contact them directly by phone or email.
4. Devise an approach
Once you have decided on the key people to contact, think about how to approach them. This is like a sales perspective. You should have captured their needs, so think about what is the best content to meet those needs. Then, based on all the information, we create materials and sales talks. Think of useful suggestions that will definitely solve the problem.
You also need to have an idea of how to approach it. For example, consider the best channels such as phone, email, visit, and DM.
5. Make an approach
Once the approach method has been decided, it is time to actually carry out the approach. Meet with the contacts you have obtained and conduct online business meetings.
6. Measure effectiveness
Once the approach is complete, you will be able to see what the results were and what the subsequent reactions were. We carry out effectiveness measurement, recording and analyzing the results as data. If you find that it is effective, you can analyze the process that led to that effect, and if you implement it in the same way, you can expect to see results in other accounts (companies) as well.
Benefits of ABM
ABM is said to have the following benefits:
1. Marketing can be carried out efficiently with limited resources
ABM selects target accounts (companies) and conducts marketing by focusing on customer companies that contribute the most to the company’s sales. Therefore, it is said that it is possible to avoid wasting resources and achieve maximum effectiveness with less resources. Because of this, it is said that marketing activities can be carried out efficiently. This is especially effective when resources are limited.
In fact, some companies are said to have improved their sales and marketing ROI, or return on investment, through ABM. It is said to produce excellent ROI, especially in BtoB marketing. It will also contribute to improving the business situation.
2. Possible to speed up PDCA
It is said that PDCA will be able to run at high speed. The strength of ABM is that it thoroughly narrows down the target customer companies, so the benefits are that it is easy to produce results and the amount of results is large. This makes it easier to measure the effects and can become an asset for your company. Since it becomes easier to hypothesise and verify marketing measures, it is possible to efficiently run the PDCA cycle at high speed.
3. Easier collaboration between marketing and sales departments
As mentioned earlier, ABM is carried out by the marketing and sales departments working together. Traditionally, lead generation was done manually by the marketing department, making it difficult to coordinate with the sales department. Therefore, with ABM, collaboration will be smooth.
It is said that the marketing department will be able to think about sales and put it into practice. As a result, you will be able to get closer to the sales department both in terms of knowledge and spirit, and the cohesion as an organization will increase.
Disadvantages of ABM
On the other hand, ABM also has disadvantages.
1. Difficult to achieve unless you are a large company
As mentioned earlier, in order to implement ABM, it is essential that a demand generation system is already in place. To that end, it will be easier for large companies to undertake ABM as they can afford the costs. Small and medium-sized enterprises find it difficult to engage in ABM. This may be a disadvantage for small and medium-sized enterprises.
2. Careful preparation is required until the start of operation
ABM cannot take a single step without information and data. Above all, we need information. You will be able to go to the meeting for the first time armed with all sorts of in-house information, including the various information obtained by inside sales, as well as information on business cards from seminars and exhibitions. You can easily imagine that it takes time to gather that information.
It will also be necessary to organize information and prepare for the approach. Since it takes time to start operation, it may not be suitable if you want to start immediately or want to connect to business negotiations immediately.
3. The entire organization needs to be facing the same direction.
ABM requires the entire organization to move in the same direction. Because being organized is paramount. However, this also requires organizational leadership. If one person pursues short-term incentives and does not follow organizational metrics, ABM will collapse completely. Companies without good organizational control will find it difficult.
What is an ABM tool? Differences between MA and SFA
When implementing ABM, it is common to utilize tools. When we refer to the tools used in ABM as ABM tools, let’s check what kind of tools they are specifically.
Also, the characteristics of ABM tools will become easier to understand if you understand how they differ from MA (marketing automation), which many companies use in traditional marketing, and SFA, which is used in sales.
What are ABM tools?
The role of ABM tools is to first select target accounts (companies). You can select the most profitable companies for your company and integrate information on those target companies.
Specifically, it has the ability to extract highly targeted customers from a list of potential and existing customers. To achieve this, it is necessary to accumulate information.
In addition, the accumulated information allows us to provide target companies with the necessary information at an effective time, and to propose appropriate products and services. You can also record key people and business negotiations.
M.A.
MA stands for marketing automation and is a typical tool often used by marketing departments. MA collects and accumulates customer information and develops potential customers. Furthermore, we will analyze the marketing measures you have implemented for potential customers.
In particular, in addition to accumulating customer purchase history, we accumulate behavior information such as website visit history, page viewing information, SNS, and email, and perform analysis based on this information. Then, we automate the path and necessary marketing measures to develop customers into beneficial customers for your company.
Unlike ABM tools, this tool focuses on nurturing potential customers. However, there are some similarities with ABM in terms of information gathering.
S.F.A.
SFA is an abbreviation for “Sales Force Automation” and refers to a sales support system. It is mainly used by the sales department. What SFA does is manage salesperson behavior, contact history, negotiation details, and the entire process of salesperson behavior. Our primary goal is to use this management data to improve contract rates, shorten the time it takes to produce a drug, and increase sales efficiency. It also has sales support functions such as creating estimates and issuing invoices, which are necessary tasks for salespeople.
You can see that it is very different from ABM tools.
When implementing ABM, it is generally possible to implement ABM more effectively by using tools that are specialized for ABM.
summary
ABM is an abbreviation for “Account Based Marketing,” which refers to a marketing method based on companies and organizations. Rather than targeting based on people, that is, “persons in charge,” we target from the beginning on an account basis, that is, “companies/organizations.” We will identify accounts that have the potential to become good customers and maximize sales, focus on their needs, and approach them strategically.
There are three differences between ABM and demand generation: 1. Differences in target, 2. Differences in practice content, and “Differences in who performs the work.”
The steps to put ABM into practice are: 1. Selection of accounts (companies), 2. Researching information on key people and those involved in implementation, 3. Obtaining contact with key people, and 4. Devising an approach method. ”, “5. Take the approach” and “6. Measure the effects”.
The advantages of ABM are: 1. Marketing can be carried out efficiently with limited resources, 2. PDCA can be sped up, and 3. Marketing and sales departments can collaborate more easily. Disadvantages of ABM “1. It is difficult to realize unless you are a large company,” “2. Careful preparation is required before starting operations,” and “3. The entire organization needs to be heading in the same direction.”