ABM Benchmark Research

Engagio published a research report (opt-in required) that focused on the strategies and tactics of successful Account Based Marketing organizations and the highlights of the ABM Benchmark Research have been summarized below.

ABM Benchmark Research – ABM Key Takeaways

Account based strategies should deliver desired business outcomes, not vanity metrics. Account Based Marketing (ABM) is not a campaign or technology purchase. It is a delivering key board-level metrics. Respondents in the ABM survey indicate that account based marketing improves:

customer lifetime value (80%)
win rates (86%)
delivers higher ROI (76%)

versus a traditional go-to-market approach

In general, for every five accounts targeted, account based organizations create a new sales opportunity. Compared to a traditional volume-based approach, an account based marketing strategy is extremely efficient at creating sales pipeline. This efficiency lets account based organizations focus on the most valuable portions of their addressable market and deliver critical business metrics at scale.

Account based budgets are rapidly expanding, with companies increasing spend by 41% in 2019. Due to early successes, organizations are doubling down on 2019 account based marketing investments. ABM budgets are focused on expanding current programs and extending account based into new segments.

ABM Benchmark Research – ABM Best Practices

ABM technology investments will increase to support scaling account based efforts.

Today’s programs often rely on manual or technology-enabled processes with limited scalability. As organizations move from ABM pilots to repeatable, scalable programs, technology investments in account based platforms, data sources, and account insights are required to achieve expanding expectations.

An account based strategy requires dedicated leadership from program inception.

More than two-thirds (69%) of top-performing ABM organizations now have a dedicated account based marketing leader. The ABM market has been penetrated—70% of those who started their account based marketing initiatives in the last six months have dedicated leaders. In contrast, only 58% of companies that missed their account based marketing objectives have dedicated leadership.

Organizations with a strong Ideal Customer Profile (ICP) achieve 68% higher account win rates.

The ICP identifies the characteristics of accounts that are more likely to become valuable customers. The ICP is a critical element of an ABM strategy that separates top-performing ABM organizations from their peers. More than 80% of the most successful account based organizations believe they have a strong ICP versus 42% of other organizations.

Organizations only pursue 38% of their target accounts at one time.

The majority (78%) of leading account based marketing organizations have implemented intentional account selection processes in order to consistently select and prioritize accounts in a repeatable way. This is a critical process to master, particularly for organizations with more than 100 target accounts.

Successful account based execution uses existing marketing and sales development tactics.

One of the biggest barriers to launching ABM is the concern that a completely new set of tactics are required. In actuality, the majority of tactics are already used in most organizations. Respondents report that their top five ABM tactics are SDR outreach, digital advertising, direct mail, marketing email, and events. Coordinated execution—not the specific tactics used—is the key change required to develop and execute an ABM strategy.

Account based is more than just marketing.

Successful account based marketing strategy requires a coordinated effort across all customer-facing functions including marketing, sales development, and sales. When marketers ranked the most important tactics, they selected SDR outreach—not traditional marketing tactics—by a wide margin.

ABM Benchmark Research – ABM Market Overview

ABM GTM delivers key results that traditional GTM can’t.

Most organizations initially adopt an ABM strategy to improve critical business results, such as pipeline efficiency, retention, expansion, and customer lifetime value.
Most organizations we surveyed saw some improvement right away (e.g. increased engagement in target accounts) and realized improvement over time for other results (e.g. increases to ACV and LTV).
Comparing account based to a traditional go-to-market (GTM) approach, respondents overwhelmingly indicated an account based approach is superior. Even sales cycle, the least likely result to improve, was better for 65% of respondents.
The results also highlight the measurement challenges organizations face, particularly in the first year of ABM adoption. In the first year, 49% of companies were not able to say if their ABM initiatives delivered a better ROI, a figure that dropped to only 8% for companies with more than 24 months of account based experience.
Orchestration, alignment, and target account list identification are leading success factors
Orchestration—coordinating efforts across sales and marketing—is a hallmark of effective execution, but account based has driven organizations to direct those efforts against the right accounts (ICP), and is why organizations are seeing greater success with an ABM strategy.
Defining the Ideal Customer Profile (ICP), which captures the characteristics of the best fit and highest value accounts, was only selected as a top three success factor by 15% of respondents. However, our benchmark shows that the top-performing account based organizations are nearly twice as likely to have
developed a strong ICP.
Organizations frequently look to technology when first implementing an account based approach, but technology was only indicated as a key contributor to success by 11% of respondents.

ABM Benchmark Research – Top ABM Challenges

Scale is the top account based challenge of 2019.

Although most organizations understand the benefits to adopting an account based approach, many still struggle to operationalize a repeatable account based approach. Many organizations initially prove success against a limited set of accounts, and rely on non-scalable approaches to coordinated execution, customization, and measurement.
Successfully scaling account based marketing initiatives requires developing repeatable, scalable, and often technology-enabled approaches to planning, customization, and coordinated execution. While scale is a major challenge today, we expect more organizations will focus on creating a consistent and repeatable approach as account based strategies continue to mature. Key drivers of scale include:
Implementing an account selection and rotation process – This allows an organization to group accounts that can be treated similarly and provides visibility into the content, messaging, and resources that will be required for execution in the coming months and quarters. Tiering the target account list and aligning resources to the tiers – Account based strategy requires intentionally prioritizing how resources are applied. Organizations that don’t align resources against tiers based on expected account value use a one-size-fits-all approach, losing the benefit of intentionally applying resources where they deliver the highest returns.

Account based spending is expanding rapidly, increasing by 41% in 2019.

Account based spend is expected to increase by 41%, likely because organizations of all sizes are seeing positive results from account based efforts overall. In organizations selling enterprise B2B solutions, we expect account based investments to continue to grow significantly. Benchmarks show that companies with target account ACVs above $75K are expecting to increase account based investments by 42% in the next year. As investment continues to shift to account based, we will see enterprise B2B marketing ultimately become account based by definition. As this shift happens, traditional investments in volume-focused marketing activity will fall in these organizations.
The research shows mixed investment plans for organizations with average target account ACVs under $25K, including significant decreases in account based investments at some organizations. Of note, organizations that have experimented in recent years with account based in transactional, low-value markets will reduce the share of marketing budgets dedicated to account based initiatives.

ABM Benchmark Research – ABM Strategy

Account based spend represents more than 20% of marketing budget across all segments.

Much of today’s innovation around account based is being driven by small and mid-market organizations. These companies are quicker to adapt to changes in the market and thus provide insights into where the
market is heading.
In years ahead, expect to see more companies investing 40%+ of marketing budgets on account based marketing initiatives, in line with investments at smaller companies today. This increase will come from the expanded role of account based initiatives, particularly as the account based investment evolves from strategic or enterprise sales segments into mid-market and commercial sales segments at enterprise B2B companies.
As the go-to-market mix evolves, many of the best practices of account based strategy and execution will be adopted as general best practices for enterprise B2B marketing.

New customer acquisition is the primary focus for account based marketing.

Organizations continue to focus the majority of their account based marketing efforts on acquiring new customers, rather than on expanding existing customers (see Figure 6). Moreover, only 4% of respondents leverage account based efforts to support partners.
The largest companies ($1B+ revenue) split their account based focus roughly in half between customers and prospects, while the smallest organizations (<$25M revenue) only invest 18% of account based efforts in current customers.
As organizations grow, investment will shift increasingly to creating the right experience for customers to drive usage, retention, and growth. This shift will cause a significant expansion in the scope of customer marketing leaders in particular, and make them a key stakeholder in the development and execution of account based strategies.

ABM Benchmark Research – ABM Organizational Design

Top-performing account based marketing programs have account based SDRs.

Despite standard sales development best practices that call for SDRs to be segmented into separate inbound and outbound roles, account based SDRs are focused on an assigned set of target accounts and own all outbound touches and inbound follow-up. This allows them to more effectively manage and customize their conversations across multiple contacts in an account.

While the majority (71%) of organizations have adopted this hybrid structure for SDRs that support target accounts, top-performing organizations adopt this structure at even higher rates (83%).

The next step is to have account based SDRs who focus exclusively on target accounts, something that 45% of top-performing account based organizations have put in place. These SDRs do not call any account not on the target list. Account based SDR programs force an increased level of focus on the target accounts. These SDRs must find meetings from within the target accounts, leading to the creation of opportunities that are more likely to close and are of higher value to the organization.

ABM Benchmark Research – ABM Processes

Organizations only pursue 38% of their target account list at one time.

Leading account based organizations have embraced account selection, with 78% establishing an intentional account selection process.
Companies with an account selection process realize 13% higher account win rates than those that do not.
Account selection is the process for selecting a subset of the overall target list that will be actively pursued (the rest of the target list is put on hold in the meantime). Organizations with more than 5,000 target accounts only actively pursue 16% of the list on average at any given time.
Given resource constraints, it is important that organizations establish a process for identifying which accounts to actively target, and rotating accounts from inactive to active and vice versa.
Account selection allows organizations to focus resources where they are most likely to drive the biggest results, grouping accounts for more efficient execution or identifying accounts that are most likely to convert in a specific period of time.
An account selection process often includes a combination of sales input, company data, and intent data. For lists with more than 5,000 accounts, the most important inputs are intent data and company information like industry and technology.
Organizations with more than 1,000 target accounts should generally expect to target more than half of those accounts as part of always-on marketing efforts, and pursue between 10% and 25% a quarter as part of orchestrated outbound programs.

ABM Benchmark Research – ABM Metrics

For every five accounts targeted, ABM organizations create one new sales opportunity.

An account based measurement model focuses on tracking engagement across an entire account, not just on engaging individual leads. It begins with the complete list of target accounts, which represents the addressable market for account based efforts. This list is the basis for calculating conversion at each point in the funnel. These conversion points are as follows

Engaged accounts – The number of target accounts that have reached a meaningful level of engagement, as defined by the engagement score. (Engaged Account Rate)

Opportunity accounts – The number of accounts with one or more new opportunities. (Opportunity Rate)

Closed-win accounts – The number of target accounts with a new closed-won opportunity. (Account Win rate)

Even within the target account list, metrics vary between prospective customers (net-new) and existing customers (expansion). Organizations will typically see higher account engagement rates, opportunity rates, and account win rates with customer accounts then with prospect accounts.

When compared to a traditional funnel, which often includes a high volume of unqualified prospects, an account based funnel is extremely efficient. This efficiency allows organizations to focus resources on just a portion of their addressable market, and ultimately deliver significant pipeline and revenue impact.