In his podcast, ‘B2B Marketing Leaders’, Dave Gerhardt asks everyone he speaks to the same question: “If you could wave a magic wand and solve any B2B marketing problem, what would it be?” Recently, he’s had to add a condition. The new rule is you can’t say attribution. Because everybody says attribution.
Account-based marketing (ABM) has for the last two years been the trend in B2B marketing, primarily because it’s seen as commercially effective. Pareto’s law tends to apply in B2B, or nearly: 80% of revenues tend to come from the top 25% of clients. Traditional broad-reach approaches to demand generation therefore tend to over-invest in the long tail.
ABM matches investment to the biggest opportunities. This focus allows higher levels of personalisation and relevance, and this drives some great results, with often great return on marketing investment to show for your efforts.
But as ABM reaches maturity, we’re seeing questions emerge about its effectiveness. Marketers invest more marketing budget in the top 20 accounts, let’s say, because they think they are the best potential source of growth. A year later, it turns out they were the best source of growth. But would this have been true anyway?
The real arbiter of effectiveness in ABM is the sales or account team who owns the account plan.
ABM is not a magic wand any more than Gerhardt has one up his sleeve, and so we’re drawn inevitably back to the enigma of marketing attribution. What difference did marketing really make, when all is said and done? Any complex B2B sale is so multifaceted that assessing the relative influence of any given factor – brand, proposition, salesperson, marketing, price – will always be to a large extent a matter of opinion. Particularly when you are operating at low scale, as ABM does.
We must, of course, put such fatalism to one side. We must prod and probe the commercial effectiveness of ABM, as with any marketing activity. We must at least try to tease apart correlation and causation, to find ways to balance long- and short-term impact.
The good news is, in our experience, this probing and prodding will strengthen the contract between sales and marketing and improve collaboration across the front office.
(At this point I should explain that I’m referring to ‘true’ ABM: that is, working on a small number of top accounts. There is another kind, programmatic ABM, that essentially replaces spray-and-pray demand generation with a more data-driven approach to targeting, using personalisation technology to improve relevance. In that case you can make the argument for ABM simply in contrast to what came before it – more meetings, more opportunities, better conversion rates – but here we’re talking about one-to-one or one-to-few ABM.)
Start by mapping objectives
The simplest way to measure ABM effectiveness is to map marketing objectives to sales objectives at an account level. If the sales plan requires a 20% uplift in revenue in the next 12 months, marketing might have objectives to set meetings with new decision-makers in a new division of the business, for example.
In this case, marketing’s influence is clear enough. But there are many scenarios where the value of ABM is less obvious. For example, large customers may be included in an ABM programme with an objective to renew or retain. Marketing’s role might be to increase adoption of a technology, perhaps, or create opportunities for the account team to spend time with the customer, innovating within the contract lifecycle. Often, the renewal event is 18 months to three years out, a long time to wait to say the ends justify the means. The factors affecting the decision are both numerous and nuanced, making the relative influence of marketing a moot point.
Frameworks like the ‘three Rs’ (reputation, relationship and revenue) help to some extent to capture a broader picture of the value of marketing at an account level. They help to set targets, measure progress and reassure others that progress is indeed being made. But it’s not always clear how far an improvement in the number of active C-level relationships, say, correlates to a growth in revenue.
Compare apples with the closest things to apples you can find
One other option to demonstrate ABM effectiveness is to have a control group of accounts. Some of our clients look at metrics like average growth rates or average deal sizes in accounts in the ABM programme and compare them to accounts outside the group.
This is great context, and often looks persuasive. But this too is open to questions about causation and correlation, as the accounts in the programme are likely to be there because they have the best opportunity for growth – unless you deliberately set up a random control group, but this would risk not investing fully in the experience of a top customer for the not-entirely-justified reason of measuring the effectiveness of your marketing spend.
The benign conspiracy: why it’s all about the contract with sales
In many ways, the real arbiter of effectiveness in ABM is the sales or account team who owns the account plan. They are the people trusted to deliver the commercial result the business relies on and to lead that journey. They have to be confident the marketing investment is making a material difference to their chances of success. And, crucially, they have to be vocal in that belief.
If your senior sales and account leads are advocates of the ABM programme, it becomes very hard to cut the investment. If however, sales are frustrated by pace or feel that ABM programmes are creating lots of nice content but little real impact with senior decision-makers, then no dashboard will save you.
ABM, like any marketing investment that will justify its worth over both short term and long term, must rely on a benign conspiracy. Stats can be produced to show that companies that invest in ABM on average grow faster or win bigger, but at the scale that ABM operates there’s never going to be an empirically sound way of proving it’s a great investment. That comes down to the belief of the key stakeholders involved. That belief is nurtured and reinforced by the presence of compelling numbers, dashboards to show progress and great looking plans. But it rests ultimately on the advocacy that comes from continuous close collaboration and communication.
Effectiveness, then, is not only about targets and measurement, but also about actively managing the critical relationship with sales. This means both setting and continually refreshing the ‘contract’: reminding everyone what we’re doing and why, reviewing milestone progress and adjusting course. Be sure to celebrate success too.
David van Schaick is CMO of The Marketing Practice.