Account-Based Marketing 101 with Demandbase
The world of B2B marketing has undergone seismic change in the past five years, with a new focus on storytelling, cross channel engagement, and leveraging complex marketing technology to improve efficiency and effectiveness. The latest trend in the space is Account-Based Marketing (ABM), in which organizations consider and communicate with individual prospect and customer accounts as “markets of one.” The ANA recently sat down with Jessica Fewless, Senior Director of Field and Partner Marketing at Demandbase, an end-to-end ABM platform, to get an idea of what it takes for companies to make the transition to account-based marketing.
I think one of the common questions marketers have about ABM is how to determine a business’s highest value prospects? What was the process used by Demandbase, and do you ever update/revise it?
Jessica Fewless, senior director of field and partner marketing at Demandbase: Every business I’ve worked with has a slightly different process, and there are several different approaches to creating a list of top-value prospects. What I’ve found is that as a brand’s ABM strategy matures, so does the approach to identifying your best next buyer. Most companies use a lookalike model to start out with, using the current customer base to identify common attributes that make them successful and satisfied users of the product, and targeting companies with these same attributes. It’s an okay approach, but it assumes that your next best customer looks like your current ones. You could be missing out on entire industries. You could be selling to midmarket when you really should be selling to enterprise, so it’s a limited approach.
The next phase of ABM gets into data-driven methods, typically predictive analytics. This takes into account not just your current clients, but all the companies in your CRM database, but that’s still limited in scope. What we eventually landed on at Demandbase was using artificial intelligence (AI) to take a look at the entire universe of companies we could be selling to, search for signals that businesses were in the market for our product offering, compares income and business size, and creates a comprehensive list of top prospects. That’s the “holy grail” for ABM.
Which AI company did you partner with?
Fewless: We noticed fewer of our closed-won companies were coming from the target list our predictive analytics partner developed, so we started looking for a company that was using AI to identify high-value prospects and started working with a company called Spiderbook. We took the top 500 prospects from both our predictive analytics solution and from Spiderbook, and ran a comparative campaign. The AI solution significantly outperformed predictive analytics, and we actually ended up buying the company. The other benefit of using AI for ABM is that not only does it identify the most valuable target companies, it also identifies the people within those companies we should be reaching out to. Our sales team used to have to do that manually, searching LinkedIn and corporate websites for clues, but Spiderbook was able to comb the internet and see who was talking about the solutions we offered at scale and with immediacy.
Now that you have AI in-house, are you confident that until tech makes the next big jump that your process is where it should be?
Fewless: I think that’s a fair statement. But it’s going to be pretty hard to leapfrog AI. That being said, we refresh our list quarterly, as AI continually gets “smarter” and understands our system better as time progresses. Also, whenever a company on our target list is closed-won, we want to replace them quickly. Keeping our list at or around 3,000 is important, as we need to make sure we’re providing our sales team enough prospects to pursue.
What was the most difficult part of the transformation for Demandbase?
Fewless: There are two issues that are common among most businesses moving to ABM: either the marketing team needs convincing, or the sales team does. For marketing, the most common thing we hear is that they’re already strapped for budget, people, and bandwidth, and don’t know how they’re going to take on an ABM strategy on top of everything they’re already doing. For sales, it’s an issue of a decreased quantity of leads coming in. The difference is that all the leads are rock solid, but when you tell a sales team that fewer leads are going to be coming in, they understandably become anxious.
There’s also an element of FOMO with sales; they’re worried that there’s another company out there they could be closing that marketing isn’t focusing on. My favorite example of this happened when I was running field marketing. I had a sales rep that wanted to run an event in Provo, Utah. The problem was that there were only 10 prospects in Provo. I told the rep they were welcome to set up a dinner, but I wasn’t going to have my team set up an event for 10 prospects. So of course the rep went to their manager to complain, but since we brought management in at the onset of this program, the manager told the rep “you have three cities getting full coverage by the marketing team, go work those cities.”
That’s why it’s critical to bring marketing and sales leadership together to develop the list. It’s not just the technology; sales needs to be able to give input on which companies they think should be on the list, and the tech is used to confirm or challenge those suggestions. Leadership from both sides need to be in agreement on the list or it’s not going to work. If we need to add a company to the list every time we get a request from a rep, we start spreading our resources thin and end up where we started before ABM.
Does Account-Based Marketing require any changes in employee compensation/employee goals?
Fewless: Yes, there are shifts for both sales and marketing. Once we had an agreed-upon targeted accounts list I mapped out our targets’ locations across the U.S. for our sales team. When they saw the map, the realized they needed to shift sales territories to make sure everyone had an equal piece of the pie, so to speak.
On the marketing side, we had to change variable compensation for our team. Before we adopted an ABM strategy, everyone was variably compensated based on the marketing-qualified leads (MQLs) they brought in. After we switched to ABM, we gave everyone director level and higher pipeline goals while everyone else still had MQLs. We quickly found the people still compensated based on MQLs had a quantity-first mentality, while those with pipeline goals focused on quality. When directors and non-directors worked together on a program we saw a clear mismatch in priorities.
I was running a series of workshops at Dreamforce, which is right around the block from our office, and I was working with one of our event managers to set it up. She came over shortly after our first promotional email went out and said, “I have great news, your workshops are already half-full!” I told her that was great, and asked how many of them were from our target accounts list. She had to go back and check, and when she returned she said, “I have good news and bad news; the good news is now the workshops are two-thirds filled, but the bad news is only 10 attendees are from target account companies. Essentially, I was going to be presenting to a room full of people our company wasn’t interested in. That’s actually a little melodramatic; at the end of the day, every company is going to get 70 to 80 percent of their revenue from their target account list, which means 20 to 30 percent comes from businesses that aren’t on their radar. So while we did end up getting some pipeline leads from that workshop series, shortly after we shifted our entire marketing department’s variable compensation to pipeline contribution.
What’s the most effective argument to “sell up” the idea of ABM?
Fewless: The most effective theme to focus on when selling the idea of ABM is efficiency. You can talk to everyone in the C-suite about efficiency and they’ll love it. There are three primary ways to measure the success of an ABM program: close rates, average deal size or initial contract value, and the speed of the sales cycle. An effective ABM program affects all three positively, which the CEO knows will result in significant year-over-year business growth. Efficiency is how you win the hearts and minds of leadership when introducing the idea of ABM.
What are the most common arguments you hear against it?
Fewless: You’ll get some old-school sales reps who don’t want marketing in touch with prospects after they make the initial contact; this is a huge mistake because today, 70 percent of the buying journey happens online, where sales has no influence over the buyer. And sales reps are typically talking to one or two decision makers, while most B-to-B companies have 10 to 12 individuals involved in any major buying decisions. Marketing can act as air cover, delivering messaging parallel to what sales is saying, ensuring the entire buying group is up to speed.
On the marketing side, even though we’ve been hearing for years about the importance of having a data-driven approach, it’s hard to give up quantity-based metrics. Some marketers have a hard time accepting that we don’t want them to fill up a room with 100 people just to have a full room, and that it’s much more important to have 30 people in the room that we’re targeting and marketing to instead.
Demandbase is an end-to-end Account-Based Marketing platform, providing services including account identification, account-based advertising, B2B website personalization, account-based marketing automation, and sales insights and integrations into CRM so that ABM results are optimized around sales activity.
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"Account-Based Marketing 101 with Demandbase. ANA, 2017."