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Account Based Marketing vs. Lead Generation: Which Generates Better Results?

What exactly is account based marketing (ABM) and how does it stack up to traditional or digital B2B lead generation efforts?

ITSMA, the Information Technology Services Marketing Association, introduced account based marketing in 2003 as an innovative and strategic way to target high-value accounts. ABM requires tight alignment between your sales and marketing teams to identify specific opportunities, develop personalized messaging, coordinate sales activities, and measure progress.

When both teams work toward the same goals, they create a more united and transparent relationship. Aligning sales and marketing also streamlines the typically complex and lengthy B2B sales cycle.

ABM Adoption Takes Off

Since 2016, ABM has become one of the biggest trends in business-to-business (B2B) marketing. The concept gained traction, and B2B marketers began to invest more heavily in ABM. According to SiriusDecisions’ 2016 State of Account Based Marketing Research, 27% of survey participants allocated between 11% and 30% of their total marketing budget to ABM, up from 19% in 2015.

In the same study, over 70% of respondents said they spent more of their budgets on ABM in 2016. Researchers expect this upward trend in spending to continue in 2017.

Why the growing adoption of ABM? In one word: results. Demandbase, an ABM technology provider, found deal size increased by 26% and close rate grew by an impressive 75%. In a recent ITSMA survey, 84% of marketers said ABM generated a higher ROI compared to other marketing programs.

How Account Based Marketing Differs from Lead Generation

Lead generation typically revolves around people. Marketing teams create lists of prospects and launch campaigns to engage them. Conversely, salespeople think of a lead generation as an account-centric process. ABM brings both groups together to use the account-centric sales approach.

Also, ABM focuses on outbound marketing instead of inbound marketing. Traditional lead generation involves casting a big net with your campaigns and pulling in as many prospects as possible. ABM is a great choice when you have an identified list of target prospects. ABM defines a much narrower target market and leverages channels such as email, LinkedIn, direct mail and other to nurture prospects through the sales process.

Finally, digital lead generation focuses almost exclusively on generating new leads, and the more, the better. ABM takes a different approach. In addition to targeting new high-value accounts, it also concentrates on retaining your existing customer base through cross-selling and up-selling.

When ABM Makes Sense

Lead generation works well when there is online demand, and your content can be matched with it. You can populate a large percentage of your sale pipeline leveraging content, inbound marketing tactics, and marketing automation.

For niche markets or higher value accounts, digital lead generation is accelerated with account based marketing. Selling to large enterprises or cross-selling to your current customer base requires a structured and strategic approach. ABM helps you catch your dream customers – the bigger fish.

Adopting a Successful ABM Approach

According to SiriusDecisions, 92% of B2B companies recognize the value in account based marketing. Only 20% of B2B marketing organizations have implemented it. This gap results from companies not knowing how to effectively implement a successful ABM program.

ABM goes well beyond asking sales to provide a list of target accounts. It requires significant coordination between the sales and marketing teams. When done correctly, ABM can dramatically boost your return on investment.

To achieve your goals, make sure your ABM program:

  • Aligns your sales and marketing teams to attract, engage, convert, and measure progress.
  • Focuses on your valuable target account prospects. Leveraging data and predictive analytics can help you determine the best accounts to target.
  • Evaluates current customers for expanding sales opportunities.
  • Produces a concise list of target accounts defined by both sales and marketing.
  • Develops insights into each account and generates the best contacts within those specific accounts. You must understand each buyer’s unique journey so you can deliver the right experience to the right contact at the right time.
  • Creates personalized messages to each account and contact through outbound interactions and campaigns.

ABM has the potential to massively grow your revenue and increase profits. As ITSMA’s research found and depending on your business, ABM may deliver the highest ROI of any B2B marketing program. With the successful alignment of your sales and marketing teams, you can direct a concerted effort that optimizes your valuable resources and takes your marketing programs to new levels.

Emina Karic

Emina Karic has experience in researching new leads and trends, social media outreach, as well as assisting the marketing department in any way seen fit. She had previously interned for a marketing firm that specializes in nonprofit and political clients before becoming a part of our agency. As the Marketing Coordinator, she compiles research on leads to target and is responsible for social media outreach via LinkedIn. She prides herself on her hard work and her ability to obtain information quickly and effectively. She holds a Bachelor’s degree in Film and Media Studies from Arizona State University.