ABM took the B2B marketing world by storm two years ago - is it real or voodoo?
About Common Sense - About John & Ed
You've met Ed here on the site.
For many years John and Ed have enjoyed talking about thorny issues around B2B marketing & sales, and recently we've started to record those conversations/debates. We're calling it "Common Sense" based on our shared love of history, and the perspective we hope we bring.
You can follow our musings on Common Sense at:
B2B Marketers are always enamored of the next tool and technique
"We've GOT to start doing xyz!" How often have you heard that from your marketing team? Are they chasing the next shiny tool or technique because it has potential? Or because they haven't figured out how to generate results yet from what they promised last time would be the solution? Account Based Marketing (ABM) blasted onto the B2B marketing scene a couple years ago, but the #FlipMyFunnel buzz has faded a bit. So was the flurry of attention based on substance or a mirage?
This episode includes:
- What is Account Based Marketing
- How to avoid falling for squishy metrics and incorporate accountability
- Why ABM should only be built on top of successful, integrated digital marketing
- The value of strategic/target account planning for both marketing and sales
- Why ABM is a mindset and business process - not just a technology segment
- The role of strong buyer intent data in improving ABM efficiency
John and I tackle those points and others as we debate the real value of ABM (Account Based Marketing) and poke holes in each other's arguments.
Transcript Follows:
Ed Marsh: Hi, I'm Ed. Welcome to Common Sense.
John McTigue: And I'm John. How are you doing Ed?
Ed: I'm good, John. How about yourself?
John: I'm doing real well.
Ed: Cool.
John: I guess today's argument … What we, a lot of times, do is hear a lot of buzz out there in the marketing world, in sales and marketing, and we're going to talk about one of the more buzzy arguments, I guess, that's out there, and that's about ABM today, which stands for account-based marketing. About a year ago, really a couple years ago, it was really super-hot. It was the new thing, the new toy that everybody wanted to try, and so I guess today, we'll argue about the merits of ABM, and why don't you get us started?
Ed: Well, I'm not normally hesitant to just stake out a position, so if we're kind of discussing ABM from the perspective of a continuum, is it a real tool or is it voodoo? I'm pretty comfortable going right on a limb and saying I think it's more toward the Voodoo end of things. How about you?
John: Well, I think I disagree with you to some extent certainly. I think it can be a very solid approach. It can be successful. I have used it myself, and it was fairly successful when I did, but you got to do it right. There are certainly some caveats to whether or not it's a successful approach, but why don't we clarify for our viewers what it is first? On the same page, and basically, account-based marketing is a lot like what we used to call target account marketing. That was really using a direct, more of a direct marketing approach to go after a list of people prospects that you wanted to do business with. That's really fundamentally the same idea in account-based marketing, but now, we're using digital strategies.
Engagio, which is one of the software vendors in the space, calls it spearfishing versus net fishing, so using a net would be more like inbound marketing, and using a spear fish would be like account-based marketing. Then, other people are calling it flipping the funnel these days, and that's all about the fact that you have a small group that you're going after, so it's kind of the bottom of the funnel. Then, you expand that group to include the whole buying team at a company, for example. That's another thing that, another buzz phrase that's out there, flipping the funnel.
What we're what we're trying to do here really ultimately is work with people that you want as customers, so you're not filtering down from a larger volume of possible people out there and trying to find, ultimately find the golden nugget. You're just going after the nuggets, but the thing that's a little bit different nowadays is that you're using some of the same tactics that you would use in inbound marketing, content marketing, and so on, all the digital strategies to try to contact those nuggets, and then ultimately have a sales conversation with them, and then take it through your sales process. It's somewhat more sophisticated than a lot of people think. It's not easy to do but I certainly wouldn't call it voodoo.
Ed: Well, I think the reason I would categorize it toward the voodoo end of that spectrum is that there's really little accountability. I mean it's the newest thing. Maybe not the newest. I mean as you mentioned, it's been a couple years since it was the complete buzz. Today, maybe that's conversational marketing or something, but it's relatively new. It's something else for marketing to invest in, and to kind of make this big kerfuffle about and shift the conversation from the fact that they're not hitting their numbers or they're not moving in the right direction.
Unlike hard numbers like revenue or leads generated, the measures of success of ABM are really soft. I mean Engagio, last time I heard, was using engagement minutes as their metric for success. I mean how many minutes do you get somebody in a target account to actually spend reading an email or looking at a webpage? Okay, I understand there's maybe a casual, possibly causal relationship between the two but that's a pretty big reach. In fact, it sounds closer to me like the arguments, the 2000s, eyeballs and all that stuff. That worries me.
I'm not saying that branding isn't important although I do believe that for SMBs, kind of industrial, middle market companies, it’s much less importance, many assume, and I absolutely agree that target account planning, and strategizing, and tactical execution is critically important, but serving ads in the hope that some topic happens to bubble up at around the conference table, at a staff meeting, and somebody subconsciously has this epiphany, “Oh, wait a minute. I saw something about that before, and oh yeah, those people must be good at what they do,” I mean that to me, in a world where you've got so much accountability, you can see everything that's happening, that feels to me kind of like voodoo.
John: Well, I don't disagree with that. I think, again, it's a matter of how you use it, and I'm not sure what Engagio’s is trying to accomplish with some of their metrics, but I think fundamentally, what we're trying to do is one-on-one marketing, which is another buzz phrase that's out there now. The idea of finding, doing the research, finding people, not just prospects but people that you think are ideal customers for you, and then understanding how their buying process works or at least doing the homework to find out, that's what salespeople do anyway. They just do it later typically, so we're kind of doing that work upfront.
What it's doing is ultimately, it could be shortening the sales cycle, so it's kind of helpful in that sense but then, how you do the marketing and what you measure, that depends on really your imagination. Some of the examples I could think of is when I was doing this, you would, first of all, find your target list, and then think of a lot of different ways of connecting with them through content. You would understand exactly what their problems were, some other challenges, some of the things that they've worked on even by doing your research, and then you'd publish blog posts and videos, maybe do some public speaking, all designed to engage them at that level. You're not just talking generalities now. You're talking about exactly what they want to talk about.
That's how you make the connection unlike inbound marketing, which is a little more general, and then what you measure is really the engagement between you and that person so you're actually measuring meetings. You're actually taking notes. You're making observations about where they are and what they're doing, so it's a little bit qualitative in that sense, but you can set up metrics that track certain just like you would in a pipeline scenario, you'd have stages of that engagement. You’d check them off as you went through them.
Then, you'd have other people on the buying team, I mentioned. You check them off as you start to engage with them, and ask for referrals and that sort of thing. It's a little bit puffy in that sense that you sort of have to make it up as you go, but I think if you're successful ultimately, the bottom line is that you can get much further down the sales process quickly and sort of go around the qualification process. What do you think about that? Do you think it's gotten a bad rap from just some of the vendors that have gotten in the space?
Ed: I don't know if it's even the vendors as much as who was it that several years ago said marketers screw up everything, whether it was GaryVee, I think, in his very casual way of commenting on some of these things. To a certain extent, he's absolutely right, but we've spoken a length about some kinds of technologies that aren’t even martech, CRM for instance, and how few companies have adopted it despite the really clear benefits of improved forecasting and management, and sales coaching, and organizational health, and resilience, and all the other things that come with managing the process in a reliable sort of a way.
Where that is low-hanging fruit, ABM that requires a lot of rigor and execution, and a lot of deep thought and kind of ongoing engagement, sure, it has great potential but it feels to me like for many companies, it's not going to be enough to move the needle if it's done in a casual way that it's probably going to end up being done. Along those lines, I mean, I think that probably, the place that really fits is our refinement on top of marketing programs that are really mature that have really been refined to a very high degree of effectiveness.
I mean there's a lot of basic blocking and tackling that has to happen to get digital marketing working properly. Many companies that I hear talking about ABM really, they see it as a silver bullet. They think it’s going to fix the mediocre performance of their digital marketing, but it won't. I mean they have to have those other pieces in place. Like you say, you've got to create the right kind of content and deliver in the right kind of ways, and those are sophisticated versions of the basic digital marketing stuff that I don't necessarily see happening properly.
I guess the other thing is it's expensive to do the kind of stuff you talked about, to have people take the time to really research, and then create essentially one-on-one content the way you're talking about. I mean that is a substantial investment. Doesn't mean it's not worth doing, doesn't mean it's not appropriate, doesn't mean there aren't accounts for which that is exactly the right way to do it, but it's not something that you just kind of slap on top of, “Okay, we got a website, an email program, and now, we're going to do a little bit of ABM on top of it.” I mean it doesn't work like that.
John: Well, I see your point, and I think on the expensive, the point about being expensive, it's certainly expensive on a per lead basis. If you're looking at it that way, yeah. I mean you're spending a lot of time and money on a single prospect that you think is going to become your customer. If they don't, then that's a loss, but the fact is, I guess I challenge your point about it not being very effective. According to Demandbase, which again is another one of the vendors out there, over 96% of B2B marketers that do ABM report a positive impact on marketing success. I think they are piggybacking that on regular digital marketing, and I do think that that's the right approach too.
John: Then, another survey by Altera, ABM had a higher ROI than other marketing activities, and that's according to 97% of the people they surveyed. There is at least some consensus out here that if you do it well, it can be very effective. Then, my last stat is serious decisions that said that more than 90% of B2B marketers acknowledge that ABM is either important or it's becoming very important so it's on the up-and-up. It's moving up in the actual user view of things. I don't think it's fair to call it voodoo at this point. It has been over-hyped, but I think we're learning how to do ABM right way. People are seeing some success from it, so where do you think that leads us at this stage?
Ed: No. I mean I think that's a fair analysis, and obviously, I staked out a fairly extreme position to foment the discussion we're having. I think the key thing that you said was it's got to be done the right way. All these other factors, we talked about, play into that, the mindset, the willingness to invest, the patience, the rigor of analysis, the thoughtfulness, the curiosity, inquisitiveness and creativity in developing the approaches. All those kinds of stuff are critical. You can't just buy some piece of martech and slap it on top of a mediocre program and expect it's going to work.
I guess let me then, with that caveat, I guess modulate my position a little bit. I would say that it absolutely can provide sales enablement and brand awareness support in complex sales situations, but it's not a magic bullet. It's a refinement, and probably, I would even argue that the biggest value in the process is that it makes people stop, makes the marketing sales teams sit down together and talk about target account strategy, and actually plan target account approaches. I mean in order to do ABM, you've got to have those conversations, and I think that often, those conversations don't happen. I mean I almost kind of wonder whether we're seeing the correlation of effect, and this may be just fundamentally because people are talking about and aware of it instead of just ignoring it. Absolutely, it serves a legitimate purpose and can be effective for sure.
Maybe the thing to do would be to define what kinds of companies it's appropriate for based on what I've seen, and so part of it is if you've got a $20 million middle market industrial manufacturer that has a marketing budget of three trade shows a year or $200,000, ABM is not a fit there or at least not immediately. It could be. Long term? Absolutely, but they can't drop it in on top of what they're doing, so I was just kind of shooting from the hip, say for an account to be a good prospect to implement ABM, do it the right way and see value from it, maybe they got to spend somewhere around a million dollars a year marketing. They probably have to have really strong, and I wouldn't say probably. They need to have really strong alignment between the marketing and sales because this becomes a very functionally collaborative effort.
They have to have a formal target account sales process in place, and they have to have a clearly defined list of target accounts. For companies without CRM, many of them aren't going to have that. I think they have to be agile users of CRM and marketing automation. They have to really embrace those technologies, and be conversant in the techniques and fluent in using them. They have to have content, either currently done or well-planned, that will support this around the challenger sales kinds of topics that are appropriate for the product or service that they're selling. If those pieces aren't in place, I mean you may argue with some of those or have some others that you suggest be part of the list, but I would say kind of as a baseline, if those pieces aren't in place, then it's a mirage. I mean they can't adopt ABM and expect it's going to work. Is that a reasonable list, you think?
John: Yeah, I do. I think that's really a good list, and just emphasizing again that figuring out the right analytics, the right metrics to try to measure progress is a little bit tricky but also really important here because ultimately, you're going to have to justify those expenses that we talked about and the time it might take, a little bit longer. You might not close as many deals in a quarter, but you might close bigger deals, and you might close deals that last longer and that upsell and have higher ultimate lifetime value. Those are things that I think need to be taken into consideration when you're thinking about doing this. It's, you're getting really good customers, maybe a fewer of them but the ones that you can depend on.
Then, I think the other thing I would add is don't just jump on the bandwagon, plug in an Engagio or a Terminus and expect to get results. That's-
Ed: You must be able to throw a dart at that martech with all those logos. I think some software is going to do it for you, can’t you?
John: Yeah. Another one is 6ense. They're all good. They're good technologies. There's nothing wrong with them as a toolkit, part of your toolkit, but don't expect those things to just deliver results right away. It's what you do with that information that makes all the difference in the world. You know a lot about this buyer intent data. Why don't you fill us in a little bit on what that's about and how that could help this whole process?
Ed: Yeah, absolutely. In full disclosure, Sales Fracking™ Buyer Intent Data is a service that I sell, and I believe it provides powerful insights for companies to understand which companies are actively researching the stuff that they sell. Part of what we do when we deliver it buyer intent data is flag those contacts that are coming from target accounts and provide details for others. We've got some really powerful predictive capabilities that will, based on behaviors, that may not yet trigger the algorithm but still indicate based on what we're observing that these other people are involved in this decision-making process or in this research, so it's really kind of like rocket fuel for ABM where you got to figure out who all the players are in that buying team whether it's 6.8 or 5.2 or 17, that all have to say yes and any of whom can say no.
Buyer intent data can absolutely be used to populate ABM tools, but the other thing it does is focuses the effort. Instead of just simply blanketing companies based on the fact that they match your target profile, instead, what you can do is focus on the target accounts and the contacts that are actually involved in thinking about researching what you're selling. Somebody said a long time ago, one of these classic sales trainers, sales is about being in the right place at the right time with the right solution. Buyer intent data is incredibly powerful telling you where the right places to be, and now is the right time because they're looking.
What's also interesting, I've seen some situations where buyer intent data has actually revealed to clients target accounts that they never stop to think about. They see that activity and they see three or four people from the company engaged simultaneously and researching something. They say, “Wow, it makes perfect sense. We've never thought about it, but it makes perfect sense for us to be doing that.” Then, even a step further, often, what that will do is open up to them kind of an understanding of another market niche they could be going after because of it.
Another way that buyer intent data supports this whole process is by demonstrating who's actually participating versus those that are hypothetically participating, so going back to that right place, right time with the right people. As we talk about this, it would come back again, converging like so often we do. I guess what I'm hearing, what I'm thinking is that we're agreeing on the fact that ABM isn't a silver bullet and the highly-touted martech toolset that often is assumed to be a precursor to doing ABM is a nice complement but isn't necessary to actually execute ABM. It's a tool for advanced marketers that have solid programs in place and invest in marketing, that are thoughtful about it, they're aligned with sales. It's really for demand gen. It's not necessarily a lead gen tool the way some people think about it. Is that fair?
John: Yeah, I think so. The only thing I would add is that it's not the opposite of inbound marketing. It's really … works well with inbound marketing as a targeted approach to that, so think about the same kinds of philosophies and tools and tactics you use with inbound marketing but now, you're just focusing on one or two people at a time. Your emails are very personalized, and they specifically go to something that that person cares about, so there's not a lot of marketing automation going on. It's not quite the same kind of broad reach, but it does use the same philosophy, and that is to be helpful to try to bring people in just by being a real resource for them. Thinking about it that way, I think, is also helpful instead of kind of separating it out as a new tool or something else other than inbound that you could try.
Ed: Isn't it crazy the way the whole marketing discussion and sales discussion is turning into this binary, it’s either this or that? That's broken. This is what's new. That's old. This is what works. I mean you're absolutely right. These things have to fit together. Even outbound prospecting has an absolutely appropriate place in business so that's a great insight that you offered there.
John: Well, I think we've reached a reasonable compromise once again. We look forward to our next debate, and that's actually going to be another one of these binary things on in sourcing versus outsourcing to an agency. We’ll look forward to seeing you guys next week, and until then, thanks for joining us. I'm John.
Ed: I'm Ed, and together, we're Common Sense. Thank you.
John: Thanks.
