ABM Strategies For Customer Retention And Better Conversions
In marketing, we’re often balancing account management and new customer acquisition. Generating new business is important, but developing existing accounts can lead to higher long-term revenue.
When we talk about retention strategies, we’re usually focused on groups or segments of our customer base. Account-based marketing takes a more individualized approach to retention. It’s become a valuable strategy for nurturing high-value accounts.
What is Account-Based Marketing (ABM)?
ABM relies on sales and marketing working in tandem to capture and grow accounts. It’s a hyper-personalized approach to account management. It’s enabled by marketing technology and a unified approach from sales, marketing, and executive decision-makers.
ABM needs technology solutions like CRM, PRM, and marketing automation to succeed. PRM meaning partner relationship management, and CRM meaning customer records management. Quality ABM requires a high level of consistent service across all platforms to be effective.
Essentially, you create a targeted strategy to identify, engage with, and then close, your most desirable accounts. It’s a sustained effort that will go through multiple levels as a customer moves down the sales funnel.
Beyond closing a deal, ABM also seeks to further nurture accounts to boost customer retention and lifetime value. You’re looking to give customers a customized experience that’s unique to them. This gives you the opportunity to create lasting relationships with your clients.
The Three Approaches to ABM
There are different levels of ABM. The perfect account-based marketing strategy for your company will depend on factors like individual account value and the number of unique accounts. Roughly speaking, all ABM strategies will fit into one of three broad categories.
Strategic ABM (Large Account)
This is the highest level of account-based marketing in terms of investment per account. This is highly personalized one-to-one account management. Typically, this strategy is used by businesses among a small group of high-value accounts.
Strategic ABM also has the highest potential ROI, as you’re targeting the most valuable accounts only. This kind of one-to-one approach is normally used with existing clients for instant engagement, to grow accounts and create higher lifetime value.
ABM Lite (Named Account)
ABM lite focuses on customer segments in small groups. It involves customized marketing based on common factors rather than fully individualized marketing. ABM Lite is used in the acquisition phase and for upselling existing accounts.
Programmatic ABM (Targeted Demand Generation)
The lowest level of investment and personalization for ABM. This is a blanket strategy focused on bringing in new accounts and moving them down the sales funnel. Programmatic ABM uses software insights to offer light personalization at scale.
How ABM Benefits Sales & Marketing Strategies
It’s true that ABM is most beneficial for businesses that focus on large accounts with long-term sales potential. That doesn’t mean that other businesses can’t benefit from the personalized marketing that ABM offers, though.
When you focus your product marketing efforts on a small group of accounts, you also narrow your resource allocation. Marketing and sales work closely together for ABM. This allows for tightly focused resource management, directed at your highest revenue-generating accounts.
Clear Acquisition Cost & ROI
The level of ROI you get from an ABM strategy is very easy to analyze. Marketing resources are directed at a small number of accounts. That means it’s a simple matter to compare the revenue returns from those accounts.
Customer Satisfaction & Retention
Customer satisfaction is highly dependent on the customer experience. Personalizing your marketing and sales interactions is a good step toward providing a high-level customer experience. 84% of customers say that being treated as more than a number is key to winning their business.
As you continue to deliver personalized service throughout the customer lifecycle, you nurture this experience. That will help you to retain accounts, as well as have a knock-on effect on your customer success initiatives, referral marketing program, strategy for customer feedback, and so on.
How to Implement an ABM Strategy
How you Implement your ABM strategy will depend on your business, your clients, and your market. There are some key questions you need to ask before you start testing your strategy. Let’s start with how you establish your ABM approach.
Establish Your Starting Point
First, think about your service. How difficult is it to explain, and what is the value? If it’s highly complex, or a large investment, such as SAP ERP integration software, then the level of personalization you need to offer increases. That will affect how well you need to understand your customer’s objectives and challenges.
Next, consider your clients. Are they large companies, or small startups? Are certain clients more strategically important than others? The size of a client’s business will affect how many decision-makers you need to engage with to nurture an account.
Of course, this also affects the level of marketing and staff resources you dedicate to each account. Larger businesses with more stakeholders may need multiple contacts within your business, and so on.
You may find yourself in a situation where certain accounts hold value beyond just their revenue potential. For example, if a client’s business is seen as an industry leader amongst internet phone service providers, then even a small deal could expand your reach within that market.
In that case, an account-based marketing approach would be justifiable. Even if the initial business didn’t meet the minimum account value. The strategic value should also be considered when you’re identifying ABM target accounts.
You also need to consider your market and your company’s position within it. How is your business perceived? Who are your main competitors? If you’re a new business up against industry leaders, then you’ll need a long-term strategy that focuses on developing relationships.
Test Your User Base With a Pilot Scheme
If you’re unsure of whether ABM fits with your customer base, then running a test program can give you more definitive answers. This lets you take a small sample of your customer base and trial your new marketing approach.
You can use the information gained from the trial to optimize your resource allocation. For example, if you’re using ABM for new account acquisitions, you can use the pilot to determine your optimal acquisition spend.
Identify Your Key Accounts
Your testing should tell you the scale of your ABM strategy, and the number of accounts you’ll be looking to target. You then need to determine what those accounts look like. Narrow down an ideal account profile. This will likely be a similar profile to your ideal buyer persona.
Remember that this can depend on factors other than just the account value. Expanding strategic partnerships or growing your business reputation may also be important.
To build a pool of these potential accounts from your customers, you’ll need to use data from your CRM system. If you want to use your AB marketing to target new accounts, you’ll also need to perform further research.
Data from your CRM system, your POS systems, and your order tracking software, can all come in useful here. You can use existing customer data to help identify and target new accounts.
Using predictive behavioral modeling, you can target new customers that show similar behaviors to your ideal accounts. You can also use more traditional criteria-based account identification if you don’t want to go for a tech-heavy solution.
Analyze Your Customers
You need to do more than identify your target accounts. Once you have those accounts, you’ll need to perform data analysis to determine the best strategy for personalizing your marketing. Exactly how much analysis you need will depend on the level of your ABM tactics.
Let’s say you’re running a programmatic ABM campaign that targets a larger group of new accounts. You won’t be able to source the kind of in-depth information required to deeply personalize their content.
That means your analysis would need to focus on your ideal account profile. Determine the common pain points and objectives that these accounts share. Then, you would focus your marketing on addressing those common factors.
If you’re pursuing a one-to-one strategic ABM deal, though, you need a different approach. You need to analyze your client based on individual factors. That means both knowing them as a business and knowing the actual decision makers you’re going to be dealing with.
There are several key questions you ended to answer at this stage,
- What are your client’s short-term & long-term goals?
- What are their main strengths or USPs?
- What are their most significant challenges?
- What is their technology stack?
- What is the reporting structure and who are the decision-makers?
- What is their brand image?
- What values and social issues do they talk about?
This means you’ll need more than hard data to get your answers. A lot of this information will be gained through networking, reading client blogs, and conferences. The main objective here is to find ways you can make deeper connections with your client.
Nurture Accounts With a Clear Goal in Mind
When you’ve identified your accounts and you’re ready to start developing your strategy, keep in mind your objectives. You should have a clear goal for the accounts you’re nurturing. Whether this is revenue growth or strategic partnership, this will inform your marketing tactics.
Consider questions like what is partnership marketing going to achieve, whether licensing deals would be viable, and so on. Differing objectives will need different levels of customer care and marketing persuasion.
Account-based marketing can be used for more than just pursuing high-value accounts. It can be used as a means of building business relationships. In a crowded market, standing out for your personalized service can be an essential edge.
It doesn’t matter if you want to get a freelance recruiter agreement signed or you want to close a big-money deal. Either way, knowing who you are dealing with and where their priorities lie will help you achieve your goals.