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Account-based marketing – is it KAM, CRM or something truly new?
This article is an edited extract from Malcolm McDonald on Key Account Management.
What is ABM?
The Information Technology Marketing Association (ITSMA) define account based marketing (ABM) as: “treating individual accounts as markets in their own right”, which sounds a lot like some definitions of key account management (KAM). However, ABM is almost always uttered in the same breath as digital marketing technology applied to business-to-business, so it is easy to get confused. There are several categories of ABM, most of which are applications of digital marketing to better serve mid-tier and small customers. Even with the “Strategic ABM” category, we need to note that it is technology playing a supporting role in strategic account teams, driven by a digital marketer.
ABM campaign activity in a key account should be designed to improve brand perceptions, build relationships and identify opportunities, by generating account-specific thought leadership for meetings with the customer. ABM research and insight activity should underpin a marketing plan per strategic customer, which feeds into the account plan. It helps the customer to recognise that this supplier understands their business needs in depth, and can provide tailored value propositions. It is judged by customer lifetime value and customer advocacy, contributing to revenue generation.
Hailed as a new wave of technology-enhanced customer-focused processes, which would revolutionise business-to-business marketing, ABM has its enthusiasts and its sceptics. It has the potential to integrate marketing, sales and service, ensuring better return on investment for suppliers and better satisfaction for key accounts, yet the gap between potential and fulfilment requires a lot of strategic thinking and excellent execution.
The principles underlying the application of ABM to KAM must be that it is used to convert data about account activity into customer focus and insight. ABM campaigns must be focused on building brand reputation and relationships with individual decision-makers, and they must be tailored per key account and per decision-maker. It should be a key element in a company-wide partnership between sales and marketing. They both have expertise to offer in prioritising the right accounts and designing integrated campaigns.
Attempts to apply technology at the customer interface do not have a very promising history of success. Some analysis must be done on the usefulness of any system and how it is going to help those whose work will be affected by it. All the information and insight should, therefore, be accessible, and should be identified early on. Bringing in internal sales and digital marketing experts and the IT supplier’s technical designers to define a system is critical, but involving the key account is highly desirable – busy members of the buying team are going to receive the marketing messages. The best ABM systems empower customers as well as encouraging learning, increasing salespeople’s understanding of customer’s needs and enabling the introduction of new products and services.
The other key factor to explore is usability. Attention should be paid to how insight is generated from data, the quality of messaging and communications support, the process for identifying business opportunities and accelerating the sales and buying process where appropriate.
ABM pioneers have reported up to 20% increases in sales, customer satisfaction, account share, customer retention and deal size, but many of these benefits are derived from better service to smaller accounts. The impact of ABM in key accounts could be much more indirect, especially in the short-term. For example, the account team would be supported by a better knowledge base and the customer decision-makers would receive more timely and relevant communications. ABM has been over-hyped, but that should not stop sales directors interested in making sure that their company’s business development model is best-in-class, taking an open-minded look at what ABM could do.