I'm a fan of the Pareto Principle. It states that 80% of results come from 20% of the effort. It advocates for working smart instead of working hard and encourages quality over quantity.
The Pareto Principle applies to sales and marketing too. And one way it can be leveraged is through targeting specific customers (or potential customers) with high-value potential, then customizing and personalizing a sales campaign for those accounts.
The average click rate for cold emails is only 2.7%. This is a great reason to consider allocating efforts toward another method: account-based marketing (ABM).
What is account-based marketing?
ABM involves allocating sales and marketing resources toward specific high-value accounts that are within your target market. These can be businesses that are already your customers (in which case you'd be focusing on upselling) or non-customers that fit your "dream client" profile. A personalized marketing campaign is then developed with a message that matches the precise needs and nature of each target account.
Account-based marketing means directly reaching out to companies that could most benefit from your products or services, or increasing revenue from existing customers who are already satisfied with your products.
ABM requires much more strategic thinking and planning; you can't just blast out a cookie-cutter email to a bunch of identified accounts and call it ABM. You need to tailor your message specifically to each account, customer or targeted prospect.
Benefits of account-based marketing
If you're wondering if ABM is worth trying, here are a few benefits that might help you make up your mind.
1. A personalized marketing approach
ABM uses a highly-personalized approach rather than a generic messaging campaign. This, according to GetVoIP, builds more trust with the prospect, improving customer retention while also increasing lifetime revenue.
Customers acquired through ABM are the ones who end up becoming your brand advocates (assuming you show them as much love while they're a client as you did before). They become your social proof and help refer other customers to your business.
2. Higher success rate
Seventy-one percent of companies that engage in ABM experience a higher return on investment compared to the traditional marketing methods, according to a 2019 study by the ITSMA and the ABM Leadership Alliance. And the average annual contract value increases by 171% with ABM.
Marketing to existing customers costs less than marketing to new leads, and the chances of closing the sale with an existing customer are higher than with non-customers.
Personalized outreach campaigns convert better by 10% on average while also improving CTR by an average of 14%. Since you can easily measure the ROI of your ABM strategy, you can quickly get a clear picture of what works. You can tell which accounts are ideal for your business and target these types of accounts in the future.
3 A shorter sales cycle
Here's a typical traditional sales cycle:
- Find prospects.
- Establish a connection with the new prospects.
- Research the prospect.
- Present a marketing message.
- Close the deal.
When using the ABM approach, however, the cycle is shortened. You won't have to research the client or try to connect with them for the first time.
Instead, you get to focus on the stages that highly impact the success of closing the sale.
Here's the ABM sales cycle:
- Identify high-value targets.
- Present a marketing message.
- Close the deal.
4. Better collaboration between the sales, marketing and customer service teams
ABM makes it crucial for the marketing and sales teams to collaborate to ensure that the right accounts are targeted, and with the right messaging. And when targeting existing customer accounts for upsells, the customer service team plays a crucial role (particularly the account manager).
These departments work together to customize and personalize the campaigns properly. This makes it possible to meet the goals, budget and needs of each targeted account.
With this collaboration comes better communication between the teams, accelerating opportunities for growth. They are able to focus on the same goals and work together for the success of various projects.
5. Standing out among your competition
Account-based marketing encourages you to focus on an audience that's likely to be a fantastic customer rather than customers who might not be very desirable.
And targeting preexisting customers aligns your focus on providing the best possible customer experience you can, which increases brand loyalty, customer satisfaction and differentiates you from your competition.
Seventy-three percent of customers will remain loyal to a company with friendly service reps, 70% of all purchasing decisions are based on how a customer feels they’re being treated, and 67% of customers would be willing to pay more for a great customer service experience.
Real-life examples of account-based marketing in action
Getting and keeping the attention of a Fortune 500 company like McDonald's requires a unique approach.
GumGum, an AI company that develops computer vision solutions, used an ABM campaign to target the fast-food giant. The company designed 100 burger kits and distributed them to McDonald's executives and its media agencies. Each kit had the name of the individual on a receipt that was wrapped inside the box.
GumGum then matched the brand's ingredients to different parts of its technology. It then created short videos, distributed them across various social media channels and tagged the brand's key decision-makers. Rather than using a one-size-fits-all advertisement, GumGum created an outreach campaign that was tailored to match McDonald's specifically.
2. Burt's Bees, Hidden Valley, Brita
In 2017, GumGum wanted to catch the attention of a small group of brands, such as Brita, Burt's Bees, and Hidden Valley. GumGum created 3D tattoo kits, targeting the companies, that people could share during an event. And they caught the attention of the brands. Again, rather than trying to market to a wide market, the campaign targeted specific brands and their needs.
How can you apply account-based marketing in your business?
With account-based marketing, you'll need to put down the traditional rule book. Forget about creating an all-inclusive marketing campaign and trying to close as many deals as you can through the sheer volume of outreach efforts.
Instead, develop a tactical approach and add a healthy dose of creativity. Here's how to start an ABM campaign:
- Identify a potential customer that fits your target audience perfectly. Who is your dream customer? This can be an existing customer or a desired one.
- Learn about the decision-making process in the organization and who the key decision-makers are. Find out what their goals and most-pressing needs are.
- Create content that speaks directly to the decision-makers. This content can be on your website, on your social channels or via direct outreach campaigns to these target customers (email, physical mail, etc.). Your sales and marketing team should ensure the message is accurate and passes the right message.
- Find the best channels to carry your message. You can use social media and tag the right people. This way, you indirectly reach other companies as well.
- Execute your campaign. Since you're targeting a specific group or individual, you don't want to annoy them with repeat messages. Capture their attention without putting them off.
- Measure your ROI. Find areas where you can improve for more effectiveness in future campaigns with the account, and remember that ABM is a continuous process.
Account-based marketing is one of the best strategies you can add to your overall marketing campaign. You'll not only earn more revenue, but your sales and marketing campaigns will become more efficient and effective as well.
And with ABM, the results are measurable, so you can see how well the strategy is working.
Think outside the box. Understand your target audience's needs and how you can improve their operations. And find the best ways to reach out to key decision-makers. Soon, you'll be making more sales and getting better clients!