Traditional sales funnels simply aren’t effective anymore. Here’s why B2B sales must embrace the Account Based Marketing (ABM) funnel.
The days of traditional B2B sales funnels are almost over. With so many more products on the market today than there were 10 years ago, selling has become a more complex process for sales and marketing teams—and buying more difficult for customers.
For years, it’s been about lead generation: casting a wide net for the maximum amount of potential leads, in the hope that at least a few of them will eventually convert.
That doesn’t work anymore. Particularly not for B2B business selling.
We’re talking about a market where B2B buyers spend 50% of their time researching solutions independently, both online and offline—and just 17% of their time meeting with sales reps.
With more conversations happening offline, and more buyers influenced by external factors, it’s getting more and more challenging for B2B marketers and sales teams to be a part of the selling journey.
And that’s where the Account Based Marketing funnel comes in.
What is Account Based Marketing (ABM)?
Whereas lead generation focuses on building a huge base of potential leads, then refining them, ABM harnesses technology like a marketing automation platform and sales/marketing collaboration to target a specific account and increase the likelihood of conversion.
Primarily, ABM relies on B2B sellers being able to strategically identify their target market and thus the corresponding key accounts that will be a focus for marketing and sales work.
ABM works because it instinctively acknowledges that buyers aren’t just visiting your company website to make a decision. According to a Gartner study, B2B buyers actually value third-party interactions—such as word-of-mouth advice, online reviews, and other third-party content—1.4x more than online supplier interactions.
The Benefits of ABM
There’s no hiding it: ABM is a huge undertaking. Close collaboration between sales and marketing leaders might be alien to most companies, and without agreement on key accounts to target, your efforts at ABM can fall at the first hurdle.
However, there’s more than enough evidence to prove that tackling ABM is a worthwhile challenge.
Focuses resources on the accounts that matter.
Traditional lead generation has no other expectation than to simply send a bunch of MQLs through to a sales team. Not only does this gives sales the difficult job of selling to people who really aren’t ready yet, but it’s also a tremendous waste of marketing resources.
Meanwhile, an effective ABM strategy ensures that the accounts that your sales and marketing team focus on are really the ones that are going to buy in the end.
It might be less of an impressive lead pay-off (what are one or two leads compared to thousands?) but with a target account list, your budget is inevitably going towards higher-quality leads.
Develops foundations for stronger customer relationships.
When does a lead become a customer? That’s not a trick question—but the answer is very different for lead gen versus ABM.
Within a traditional sales funnel, your lead stays a lead right up until the moment of purchase. Boom, they’ve graduated from lead to customer.
An ABM program, meanwhile, doesn’t make such a concrete distinction between leads and customers. Instead, every lead is named an account from the beginning.
As a result, each account is treated as if they were a customer from the first moment of discovery, with personalized sales and marketing efforts designed to build a relationship before purchase.
ABM increases ROI.
In the world of data-backed marketing, this is really the only benefit that matters. And maybe it’s against all logic: more leads should mean higher ROI, right? Not exactly.
Research conducted by ABM Leadership Alliance and ITSMA found that 76% of marketers saw a higher ROI with an ABM marketing strategy than any other.
In another study, almost 9 in 10 organizations reported that accounts supported by ABM achieved higher ROI than those without ABM support.
How Relevant Are Traditional Sales Funnels B2B Marketing Today?
The traditional image of the sales funnel as an upside-down triangle is a stubborn one. It’s one of the first things that beginner marketers and sales teams are introduced to—and yet, it doesn’t quite work today, particularly if you want to harness the benefits of an ABM campaign.
For starters, the traditional funnel assumes that the B2B buying journey is linear—as demonstrated by HubSpot’s diagram below. Customers are dragged into the top of the funnel using effective demand creation and inbound marketing strategies (building awareness through social media presence, videos, or blogs), and they progress down through each stage. Before you know it, they’re buyers.
Unfortunately, this model doesn’t reflect the true reality of a B2B buyer’s journey, which is oftentimes far more non-linear and wayward.
The traditional funnel would have you believe that you can guide a customer through distinct stages until they’re ready to buy. In reality, that’s no longer the case.
In today’s sales cycles, buyers might revisit each stage of the funnel more than once, and even interact with other suppliers simultaneously. It’s not a case of identifying a MQL and then passing them onto sales to bring home the sale; it’s far more unpredictable.
In fact, much of the B2B cycle happens without your company ever being involved at all. According to research from Harvard Business Review, B2B customers are on average 57% of the way through the buying process before they even engage with your sales reps.
The offline nature of the B2B sales cycle also means that tracking customers is more difficult. It’s impossible to see the conversations that your customers are having at their workplace, at networking events, or informally on sites like Twitter or Reddit.
All of this precipitates a new way of thinking about the traditional sales funnel, in light of changing B2B buyer cycles.
How to Develop an Effective Account Based Marketing Funnel
Fundamentally, the ABM funnel is:
- More difficult to track,
- Engaged with sales and marketing simultaneously.
With that in mind, we like to think of the ABM funnel as more of an incubator than a funnel. Rather than a 2D funnel, the ABM funnel is a complex, 3D system, in which multiple elements (for example, inbound and outbound marketing, content creation, field marketing) interact to produce the preferred outcome: conversion.
Crucially, within the ABM funnel, marketing and sales strategies don’t work alone, but in tandem with each other (for this reason, many companies are abandoning sales and marketing departments altogether, in favor of a ‘go-to-market’ department or equivalent.)
To make this incubator work, though, you have to feed it the right energy. And that starts with your key account selection.
Creating the right target accounts list
39% of B2B marketers say that choosing which accounts to target is the biggest challenge of developing an effective ABM strategy. So many organizations ignore this step, or, even worse, do it badly.
The Serviceable Addressable Market (SAM) is the foundation of any effective ABM funnel. But you can’t just add anyone who’s ever visited your site or signed up to a sales demo to your SAM.
An effective ABM funnel relies on those target accounts being the right fit for your company.
Evaluating fit accounts requires analysis of key variables including the demographics of your existing customers, a breakdown of how profitable they are (if you can get this data), and whether they are going to have the problem you're solving.
To start evaluating fit, pull up your current customer list and filter to show only those customers with 100% net revenue retention. B2B expert Scott Martinis describes this segment as a 'retainable addressable market': the proportion of your existing market who is willing to buy from you again and again.
The most effective way of finding best fit accounts is to search for organizations similar to those in your retainable addressable market - people who want to continue buying from you. So, build a lookalike segment based on this portion of your existing customer list, and you've got a list of key accounts to start targeting.
As well as segmenting existing repeat customers and building a lookalike list, sales teams can look at closed won deals to find best fit accounts. Focus on the different variables that make up that customer: the size of the company, geography, what the team looks like, how many sales reps they have.
Equally, closed lost deals can also provide insight into the companies who don’t need your product, which could be for reasons that you can capitalize on (for example, if they’ve recently closed with a competitor for a specific length contract.)
Once you’ve established the key accounts that you want to target with your ABM strategy, you have to pair fit with intent.
Sales teams are well aware that the B2B buying process takes time. There are multiple stages and often multiple key decision makers. But contrary to that, the buying window is actually very small. If you miss that window, you might not get another chance to sell.
Intent is often more difficult to scope than fit, especially as it requires almost constant buying behavior tracking. But you don’t want to waste time on prospects that simply aren’t ready to convert.
There are some crucial factors that will help you identify intent, most of which will require third-party data. For example, you can use ABM tools like 6sense and Bombora to explore key accounts’ recent keyword searches, ad engagement, and recent website visits.
Integrating first-party data like website visits, email responses, webinar sign-ups, and sales rep engagement, can help you build a bigger picture of key account intent, and understand the right time for your sales teams to reach out.
Building brand awareness
Because the ABM funnel is non-linear, the process of creating your TAL and analyzing intent has to co-occur with brand awareness work. It’s all well and good identifying key accounts, but if they’re not aware of you, then you’re not going to be able to effectively sell to them anyway.
Demand generation is key if you want to get your company in front of your key accounts. By creating educational content around specific pain points and investing in personal branding for your key company leaders, you can ensure that you’re the company they think of when they need a solution.
Remember, 60% of B2B buyers end up choosing the brand they thought of at the beginning of their search.
Your brand awareness must be both far-reaching and strategic. You want to build a general awareness among your market as well as target relevant content to the right people at the right time.
Conducting creative campaigns
Your TAL, intent insights, and demand generation work all work together to create targeted campaigns with one goal: converting those accounts that are ready to buy.
There’s really no limit to the kinds of campaigns you can run once you’ve identified a key account. To give one example, data cloud company Snowflake partners with Sendoso to build key account loyalty through gift programs. The organization also runs strategic, one-day events with key accounts to generate interest and build relationships.
But you don’t have to go that far if your budget doesn’t allow it. Targeted social content, referral programs, gifts, email campaigns: there are plenty of ways to develop your key accounts into customers, and your strategy will be informed by your brand.
- Create your TAL.
- Look for intent signals.
- Build brand awareness alongside.
- Create strategic campaigns that convert.
Top Tips for Optimizing Your ABM Funnel
Now that you know how to build the foundations of an ABM funnel, it’s time to look at how to optimize. A great way of thinking about ABM is as precisely the opposite of a copy-and-paste marketing campaign. As Hillary Carpio, head of ABM at Snowflake says,
“The key to success in ABM is you have to build a program that suits the need of your business.”
The strength of your resources and your unique goals will inform how you conduct an ABM strategy.
1. Understand that demand capture and demand creation go hand-in-hand.
Educating key accounts doesn’t happen overnight. Building effective brand awareness requires long-term digital marketing campaigns, and a rejection of traditional cold sales tactics.
At the same time, demand creation is useless without demand capture. Both of these elements must work together to warm up your key accounts, and that’s where ABM software comes in.
Effective ABM software can reduce the risk of you making assumptions about accounts, resulting in relevant demand creation and personalized campaigns.
2. Prevent data silos.
Coordinating a successful ABM strategy inevitably involves a lot of different software—intent tracking, email marketing, CRM, web analytics. And because your marketing and sales team are effectively working in tandem on your ABM, all of that data has to be available for multiple stakeholders to view.
Better decision making will happen when your entire team has access to the right data. If you’re not on the same page on your ABM strategy, you’re setting yourself up to fail.
3. Find tools to help you react instantly.
In an ideal world, you want to engage with your target account when you know their intent to buy is there. However, in the real world, that can be challenging.
Using ABM tools like Warmly can help you react instantly when your key accounts are active on your website and showing intent, helping you convert faster.
Our AI chatbot can proactively chat with target accounts when they’re on your website, educating them and even booking meetings. And when an account really needs a helping hand from a human SDR, Warmly AI can loop them into the conversation.