Most B2B businesses prescribe to the waterfall approach of marketing. The common funnel. That is, a little bit of prospects drop off at each stage of the funnel. From click to lead, lead to MQL, MQL to opportunity, and opportunity to deal.
It’s at the basis of most everything we do, and has been for many decades, from media to content. According to Forrester, the waterfall marketing funnel looks like this for the average company:
This works, to a degree, especially for companies that DON'T go after enterprise. But it’s a game of odds that works because you're constantly picking off the lowest hanging fruit. However, another way to think about this approach is that the 99% of marketing effort and spend is wasted since only 1 out of 100 leads convert to a customer.
The problem with inbound marketing is you can’t control for who. Anyone can download that ebook. Anyone can click on that search ad. And that’s fine if you have a large purchasing base, for example B2C and even B2B companies with a lower average deal price. If that’s you, check out pipeline marketing, but for many B2B companies that are doing enterprise marketing, a more targeted approach is necessary.
As your average deal price increases, the potential number of customers decreases. For some companies that only target the Fortune 500, it can be a pretty small group of potential customers. In fact, you may even have every potential customer and person identified.
By shifting some budget to account-based marketing, you’re not optimizing for improving the 1% of marketing that works. You’re optimizing for the 99% and that can have a huge impact, especially if your deal sizes are larger. If you’re not familiar with account-based marketing, it’s the idea that you only engage companies who are ideal users of your product.
Utopia for enterprise B2B marketing should be 100% account based. It's not realistic for most companies, but in the most idyllic sense, having 100% of marketing budget go to only the companies that would buy your product is a best case scenario.
However, it's important to note that for most companies, a mix of demand AND account marketing is required. This blog post is inbound marketing after all. A lot of that comes down to scalability of account based marketing and -- sometimes -- you get your targeting just a little off and might be missing potential customers.
For companies doing (or want to do) some account based marketing, they should take some lessons from the #FlipMyFunnel movement.
We’ve looked at #FlipMyFunnel before, but to recap, it’s about focused B2B marketing. There are 4 main components:
Identify: Deeply understanding your target customer profile. This can be based on a number of criteria from the technologies they use, to their industries.
Expand: Building not only the list of companies that fit that criteria but also the roles and people as well.
Engage: The actual demand part of account-based marketing where proactive advertising can create awareness within these known accounts across offline and online channels.
Advocate: Your best customers come from referrals and recommendations, so make sure to continue taking a 1:1 approach to customer engagement as well.
Once you’ve built an account-based marketing engine, you’re going to need it to measure revenue for optimization, and that’s where account-based attribution comes into play. Arguably, companies doing account-based marketing need attribution even more than those that are not, since they’re driving marketing touchpoints on a small subset of customers.
This post has been updated to clarify some points made after a reading a response from David Crane