So, you are faced with the ultimate choice - account-based marketing vs demand generation.
Yet, you cannot decide which strategy is best for driving business growth in your particular case.
While both marketing approaches yield results, they work differently regarding primary goals, techniques, and target audiences, meaning you have to go for the one that aligns with your needs and objectives.
In this article, we’ll dive deep into the key differences between account-based marketing and demand generation, helping you understand which strategy is more suitable for you.
What is account-based marketing (ABM)?
Let’s start with the basics!
Account-based marketing is a strategic marketing approach that focuses on targeting and engaging specific, high-value accounts rather than casting a wide net across a broad audience.
Unlike traditional marketing strategies, which aim to reach as many potential customers as possible, ABM is highly selective.
Namely, it concentrates efforts and resources only on nurturing relationships with key accounts - that is, accounts most likely to generate significant revenue.
As such, ABM has two main objectives:
- Increase engagement with targeted accounts and build meaningful relationships with them.
- Drive higher conversion rates by nurturing those accounts and guiding them down the marketing funnel.
To achieve these goals, you’ll need to have perfect alignment between your sales and marketing teams to ensure that they’re working on:
- Identifying accounts that best match your ICP.
- Developing strategies fit to attract, delight, and convert them.
Common ABM tactics for attracting and nurturing key accounts often involve a mix of personalized campaigns and direct engagement.
For example, marketers might create customized content, such as personalized emails, landing pages, or case studies, that speaks directly to the target account's unique challenges to raise brand awareness and build trust and rapport.
On the other hand, they can also launch advertising or cold call campaigns that directly engage high-value accounts, aiming to demonstrate your product’s value and build relationships that might lead to successful conversions.
What is demand generation?
The very name demand generation already implies what this marketing approach is all about.
Demand generation is a holistic marketing strategy that aims to raise awareness and generate interest in your products or services, building a steady pipeline of leads.
Essentially, its core focus is to let potential customers know that your brand exists and that it’s actually the best solution for their key issues and needs, driving interest and demand for your product.
To achieve this, you need to engage and educate prospects, which is why demand generation mainly consists of tactics aimed at doing exactly that, such as content marketing, SEO, social media campaigns, etc.
Consequently, it’s fair to say that the key difference between demand generation and ABM lies in their targeting approach.
ABM is highly targeted and concentrates on specific high-value accounts - the accounts most likely to benefit from your product and generate the highest ROI.
Demand generation, on the other hand, is about creating widespread awareness and attracting a large pool of leads, from which the most qualified can later be nurtured through more targeted efforts.
As such, demand generation targets a much broader audience, aiming to raise brand awareness by reaching as many potential customers as possible.
Let’s get a closer look at these differences.
How do targeting approaches between ABM and demand generation differ?
As mentioned above, ABM is characterized by its highly specific targeting, where marketing efforts are focused on a select group of high-value accounts.
In ABM, the goal is to identify key accounts most likely to bring significant revenue to the business and create personalized campaigns tailored to their unique needs and pain points.
As such, this approach requires:
- Deep research to identify high-value accounts and discern their interests and pain points.
- Close collaboration between marketing and sales teams to ensure that every touchpoint with the target accounts is relevant, tailored, and impactful.
In contrast, demand generation employs a broad targeting strategy to reach a wide audience.
Rather than focusing on a specific set of accounts, demand generation seeks to engage a broad range of prospects, gradually educating them about the company's offerings and nurturing them through the buyer's journey.
The emphasis here is on building brand awareness and generating interest across a wide market, with the expectation that at least a part of this audience will eventually convert into qualified leads.
In turn, these differing targeting methods significantly impact lead nurturing and conversion rates.
In ABM, the highly specific targeting allows for more personalized and direct engagement, leading to stronger relationships with key decision-makers and often resulting in higher conversion rates.
Moreover, since ABM efforts concentrate on a smaller number of high-value accounts, the resources invested in each account are typically pretty substantial, leading to deeper connections and a higher likelihood of successful conversion.
On the other hand, demand generation's broad targeting approach often results in a larger volume of leads but with varying levels of interest and qualification.
While this approach can create a robust pipeline of potential customers, the challenge lies in effectively nurturing these leads and identifying those most likely to convert.
As a result, demand generation may require more extensive lead scoring and nurturing efforts to filter out less qualified prospects and focus on those with a higher probability of conversion.
Here’s a cheat sheet of the key differences between demand generation and ABM to help you differentiate between the two at a glance. 👇
What are the goals of account-based marketing vs demand generation?
The primary goal of ABM is to nurture and convert key accounts - as simple as that.
ABM is all about quality over quantity, focusing on a select group of high-value prospects with the ultimate aim of guiding these accounts through the sales funnel while increasing the chances of conversion and long-term loyalty.
In contrast, demand generation is about building a strong brand presence and creating a steady flow of new leads that can be nurtured through more targeted marketing efforts.
Therefore, the goal is to cast a wide net to attract a broad audience and generate as many leads as possible by educating potential customers about your brand and its value.
As a result, each of these strategies contributes differently to the overall sales pipeline.
ABM drives high-value conversions by focusing intensely on specific accounts most likely to generate significant revenue. This makes ABM particularly effective for businesses targeting large enterprises or key clients with complex sales cycles.
On the other hand, demand generation fills the top of the funnel with many leads, providing a broader base of potential customers to work with. This is essential for businesses looking to rapidly grow their customer base, increase brand visibility across a wide market, or expand to new markets.
What tactics are used in account-based marketing vs demand generation?
When it comes to ABM, this approach relies on highly personalized and targeted tactics that focus on building relationships with specific high-value accounts, such as:
- Personalized emails - Email campaigns are a big part of ABM, as tailored emails are a tested and tried strategy for approaching and engaging high-value accounts. To ensure optimal results, don’t rely on basic personalization (personal name, company name, job role, etc.) but go beyond by addressing their individual interests, pain points, needs, etc., in the email copy.
- Tailored content - Distribute customized case studies and whitepapers to key accounts, ensuring that they are relevant to the accounts’ needs and challenges. For instance, if a key account visits your website and spends most time on a page explaining a particular feature, you can send them a case study breaking down how a similar company achieved excellent results by leveraging that product feature.
3. Direct engagement - This includes activities designed to foster deep connections with key decision-makers through direct contact, such as calls, one-on-one meetings, exclusive webinars or workshops, etc.
4. Account-specific marketing campaigns - They aim to engage multiple stakeholders within a single account through various touchpoints, including email, social media, direct engagement, and more, to create a holistic and tailored experience that will resonate with these accounts.
In contrast, demand generation uses strategies that aim to attract a large audience and generate a steady stream of leads, including:
- Content marketing - Blogs, ebooks, how-to videos, webinars, and similar educational and valuable content are the cornerstone of demand generation, as they help raise brand awareness, establish thought leadership, and build trust with a wide range of potential customers.
2. SEO - SEO increases the visibility of your content (and website in general) in search engine results, helping drive organic traffic to your website.
3. Social media campaigns - These help reach a wider audience, create interest in your offering, and engage them enough to give your brand a second thought when they reach the consideration stage.
4. Paid ads - PPC and social media ads designed to capture attention and drive traffic to landing pages are also widely used.
Practical examples are the best way to understand how these strategies might look in real life.
ABM strategy
Salesloft’s partnership with Reachdesk is an example of a highly successful ABM strategy that involved directly engaging high-value accounts through personalized and relevant gifts.
For instance, in the earlier stages of the buyer’s journey, Salesloft would offer prospects a free coffee voucher to book a meeting.
At later stages, account executives would send free lunch vouchers to prospects during a demo or as a follow-up after a demo meeting.
As they gained more information about their prospects, Salesloft’s team became even more personal, gifting unique presents like pop culture memorabilia.
Although this approach may sound unconventional, the results speak for themselves—Salesloft got 60x more ROI than before leveraging this personalized strategy.
Demand generation strategy
Pump’s success story is an excellent example of how a good demand-generation strategy can lead to excellent results.
The startup invested heavily in various demand-generation tactics, such as social media campaigns, paid ads, content, etc. As a result, their website started gaining serious traction.
However, the company fell short of capturing the demand it generated, as its team could not identify the potential leads that landed on the website.
That’s when they implemented Warmly, a website traffic identifier that enabled them to capture potential leads successfully and identify those most likely to convert right now.
Ultimately, this holistic approach resulted in closing a $20k deal in the first week of using Warmly.
How do measurement and metrics differ between ABM and demand generation?
Knowing which metrics to track - and how - is crucial for accurately measuring the performance and efficiency of your ABM and demand gen campaigns.
When it comes to ABM, since the focus is on deeply engaging and converting specific high-value accounts, the metrics are centered around the quality and depth of interactions with those accounts.
Therefore, some key ABM metrics include:
- Account engagement, which tracks how actively the target account is interacting with your content, website, emails, events, and other marketing efforts.
- Deal progression, which measures how many of these high-value accounts moved through the sales funnel, going from initial engagement to closing the deal.
- Pipeline velocity, which is the speed at which accounts move through the pipeline, helps identify bottlenecks and especially efficient strategies.
On the other hand, demand generation is focused on attracting a broad audience and generating a large volume of leads, so its KPIs are more quantitative.
Some common metrics include:
- Lead generation rate, which tracks the number of new leads entering the pipeline.
- Conversion rate, which measures how effectively these leads are being converted into customers.
- Brand impressions, which show how often people come across your brand in daily life.
These metrics reflect the fundamental differences in strategy:
While ABM is about precision and depth with a few key accounts, demand generation is all about scale and reach across a wider market.
Which strategy is better for your business: ABM or demand generation?
There’s no simple answer to this question, as it depends on various factors, including your goals, target audience, business type, etc.
Yet, there are certain cases where one strategy is almost certainly a better choice than the other.
For example, businesses targeting smaller, defined sets of high-value accounts, such as enterprise-level B2B companies, often prefer ABM.
The reasoning is simple here: When your business success primarily relies on deep and lasting relationships with a few key clients, ABM’s personalized and narrowed-down approach is probably a smarter call.
On the other hand, demand generation might be more suitable if your company operates in a market where volume is crucial, such as B2C or SaaS businesses that target a broad audience.
So, go for demand generation if you’re looking to build brand awareness and generate a large volume of leads that can be nurtured over time.
However, sometimes, combining ABM and demand generation can yield the best results.
For example, a business might use demand generation to build a broad pipeline of leads and then apply ABM tools and tactics to focus on converting the most promising ones.
This hybrid approach allows companies to benefit from demand generation's wide-cast net while leveraging ABM's personalized engagement for high-value targets, resulting in more conversions and ROI across levels.
In the end, each strategy has its perks and limitations, so it’s important to consider both sides of the coin before deciding.
Can ABM and demand generation work together?
In short, yes.
ABM and demand generation can, in fact, excellently complement each other, filling out the gaps left by each and enabling you to reach your TAM from top to bottom.
Namely, demand generation casts a wide net to attract a broad audience, filling the top of the sales funnel with a large pool of potential leads.
Once these leads are identified, ABM can be used to focus on the most promising prospects, providing personalized attention and tailored campaigns to nurture and convert them into paying customers.
This way, you’ll both establish and maintain a broad market presence while avoiding wasting resources on low-quality leads. Instead, you’ll ensure that no opportunities are missed, at the same time focusing on converting high-potential leads into loyal clients.
Caddis Systems is an excellent example of where an integrated approach may take you.
The company used various demand generation tools and techniques, including content marketing, email campaigns, paid ads, and SEO, to increase brand awareness, attract leads, and ultimately drive traffic to its website.
To identify the potential leads who landed there and avoid missing any hot opportunities, Caddis Systems leveraged Warmly, which enabled them to:
- Identify anonymous website visitors at both company and individual levels.
2. Pinpoint the accounts most likely to convert based on how well they fit into their ICP and buyer intent level.
Once its team knew who its hottest accounts were, they could focus their attention on them.
To engage those accounts further, they used:
- Warmly’s Orchestrator, which added them to automated email and LinkedIn outreach sequences consisting of personalized emails and/or LinkedIn messages and connection requests.
- Warmly’s AI Chat, which engaged leads in conversations through contextual messages, offered relevant content, answered questions, booked meetings, and more.
Finally, when the accounts were ripe for a meeting, Caddis Systems’ sales teams used insights Warmly revealed on each account to create tailored pitches that were more likely to resonate with them.
As a result, Caddis Systems experienced 5x the ROI in just a week.
Leverage Warmly and boost your demand gen & ABM efforts
Now that you’re aware of the key differences between ABM and demand generation, their unique approaches, and the techniques they leverage to reach their objectives, you’ll be able to make the right call much more easily.
Both strategies are powerful - not to mention the hybrid approach that delivers the best of both worlds - meaning that your choice ultimately depends on what you aim to achieve.
Regardless of which approach you go for in the end, Warmly can help you ensure that you’ll:
- Capture leads who land on your website.
- Prioritize the hottest accounts.
- Reach accounts most likely to convert while they’re still hot.
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