Gavin Dimmock, Vice President and GM of EMEA for Terminus, looks back at the history of Account-Based Marketing.
If you want to know how, when and why Account-Based Marketing (ABM) emerged as a popular marketing strategy, then you’re in the right place. Many folks think that Account-Based Marketing is a modern concept. However, ABM has been around for longer than people realize – it just wasn’t always called ABM! In one way or another, B2B companies have always had target account lists of their top prospects that receive special attention from sales and marketing. You know, the ideal, dream clients. This tactic has been called “integrated marketing” in the past. So, chances are that you’ve already attempted some ABM in your career. At some point, things shifted and it became officially known as “ABM.” Let’s talk about that shift!
How ABM got its start in the 90s and early 2000s
Sometime in the 90s, it began dawning on B2B companies that they needed to mimic B2C companies. Why? Because B2C companies were providing powerful and personalized brand experiences to their audiences. Sounds like a no-brainer now right? We now know more than ever before that personalization, including tailored messaging and experiences, is key to good business. No one wants to feel like just another brick in the wall. We’re only human, after all – emotion and feeling connected play a big role in buying a product or service.
Fast forward to 2004 when ITSMA coined the term “ABM,” although it took a whole decade before that phrase would be adopted as mainstream. Well, exactly a decade later in 2014, Terminus was founded to help marketers focus on creating revenue with best-fit accounts. Around that time, “account-based marketing” received enough global search traffic to show up on Google Trends. On the flip side, in 2015, global search traffic for “lead generation” hit an all-time low. Coincidence? We think not.
Since then, the technology that empowers B2B marketers to provide targeted, personalized campaigns to the right audiences has significantly advanced at an impressive speed. That alone is a major indicator of its value! Soon enough, the term “ABM” will fade into the background and just become synonymous with “B2B marketing,” similar to how “digital marketing” has become known as regular marketing today.
There’s an important distinction to make between ABM and “inbound marketing,” which has been the standard B2B marketing strategy up until the 2010s. Unlike inbound marketing, ABM is not a lead generation strategy. The focus is entirely different. Sure, it generates some leads as a by-product. However, at its core ABM is about creating focused awareness and engagement with a segment of future customers and working closely with sales teams to create opportunities. Think of it this way: lead generation is like casting a wide net in hopes of catching some small and large fish together. ABM is like obsessively learning all about the biggest fish and getting really good at catching them in the process.
Recent ABM trends (2020 - Present)
Skip ahead to 2020, and an even bigger rush to ABM occurred. Terminus’ 2019 State of ABM report found that 23 per cent of respondents had no active ABM program. In 2020’s report that number dropped to just 5.8 per cent. A huge dip in just one year! An overwhelming majority – 94.2 per cent of respondents – currently say they have an ABM program. Of those with an active ABM program, 7.9 per cent were in an experimental pilot phase and 43 per cent rated their experience with ABM as “early.”
As a vendor of an account-based platform, we experienced this too. When COVID-19 hit, we received a flurry of inbound activity from companies who decided it was finally time to get into ABM. Was 2020 the year that ABM went from a component of a marketing program to a commonplace revenue-generation strategy? It sure seems like it, and there’s a good reason why too. COVID-19 presented new, unique challenges for many companies, and revenue teams had to promptly learn to do more with less. ABM helped them become smarter and more targeted to acquire new or retain existing customers while their resources shrank.
In 2021, the world has finally caught up to account-based methodologies, with many more CROs purchasing ABM platforms to help their sales teams. Partnerships between sales and marketing teams to create opportunities has finally become the rally cry. We’re finally reaching the “sales and marketing alignment” we’ve always dreamed of, thanks to ABM!
Shifting from “lead generation” to “revenue generation”
Account-based approaches have always been about efficient revenue growth by focusing marketing efforts on just the best-fit accounts. And, yes, while lead generation is a part of an ABM program, it’s a much smaller piece of the pie. The majority of ABM efforts should focus on account engagement and creating opportunities with your target accounts efficiently and creatively.
Companies that are new to their ABM journey haven’t quite reached that conclusion yet, with 42 per cent of respondents looking to ABM as a lead generation strategy. This trend is understandable, given that lead generation has been etched into marketers’ brains as the holy grail for many decades. More mature ABM programs avoid lead generation as a goal and align themselves overwhelmingly to new business generation and customer retention, respectively, with lead gen only representing 10 per cent of their top three KPIs (key performance indicators). So, it’s time to stop measuring leads and start thinking in terms of accounts.
ABM is powering a modern revenue revolution
Every year, we’re seeing the same trend: as account-based programs become deeply woven into a company’s sales and marketing strategy, those same programs become the main source of revenue. In 2020, the results were clear as day. A whopping 78 per cent of companies’ demand-generation resources were focused on ABM. And, the results are worth the effort – almost 80 per cent of new opportunities come through these programs and 73 per cent of overall revenue is attributed to ABM. ‘Early ABM’ companies are even seeing a major impact, generating approximately a third of their revenue from account-based programs.
With the correlation between the large influx of newborn account-based programs and the revenue performance achieved by later maturity programs, it’s safe to say that B2B marketing has finally shifted and will reshape modern revenue-generating strategies. We are so excited to soon release our 2021 report to see just how much more of a shift has happened towards Account-Based Marketing in the past two years alone. While you wait, check out our “Blueprint to ABM ebook” to get started with your own ABM program today!