When executing an ABM strategy, less is more.  Too many accounts and it dilutes the purpose entirely, and too few accounts represent a missed opportunity. 


abm-catching-big-account-720The concept of lifetime value is the lead domino in account selection. The rule of thumb for account selection is that a deal in an ABM account must be worth at least 2 times what a typical deal is worth. This 2x benchmark is the Mason-Dixon line on whether or not account-based marketing is worth it.


Simply stated, when evaluating a stratified set of accounts, the ABM accounts have a value to the organization worth more than 2 times the average sale.


Evaluate ABM at a deeper level by downloading our 10th annual workbook, How to Make Your Number in 2017.  Turn to the marketing strategy section and turn to page 214.


While the deal size needs to be at least 2x, the total lifetime value is often significantly higher.  This is primarily because these top accounts are more likely to need more products than a customer that perhaps may stumble across one offering but not really be a perfect fit. High lifetime value accounts are also more likely to find value in a multi-year contract, which by definition is going to extend the lifetime value.


ABM approaches place the focus of sales and marketing on total lifetime value versus a single deal. If you’re deploying a land and expand strategy, you might develop an account over a long time period. Three years from today the account is generating a lot of revenue for you but the original transaction might have been modest at best. The key here is stay focused on lifetime value, apply ABM in situations where multi-year contracts are valuable and where multiple products can be bought.


Account-based marketing can help companies who have reached the limit on the traditional demand gen and lead management efforts.  Now that you have a rule of thumb to work from, review best practices for prioritization.


Prioritization of Accounts


The next step in putting the ABM plan into action is prioritizing accounts.  This requires you to develop a good understanding of revenue potential per account, including white space analysis within the existing account base.


Prioritizing accounts is typically identified by a combination of factors.  These factors may include revenue potential and propensity to buy.   The propensity to buy (PtB) formulas will include the predictors such as company size, industry and special factors that represent demand drivers for your products.  An example of a special factor could include FBI cyber crime data for security software.


The end result is to prioritize accounts from top to bottom, best to worst, based on a set of criteria that delivers the highest lifetime value (LTV).


For the prioritized accounts, contact records for each buyer and those who influence the decision must be developed.  This involves database management and contact management to go wide and deep within account-based marketing accounts.  The emerging best practice is to obtain the deeper contact records by offering content, training and events that are customized to the account and pull in contacts who opt-in for more.


Validating that ABM is Right for Your Company


The hype of account based marketing is strong enough to convince companies to dive into ABM before validating the fit.  This final article segment focuses on helping you validate account based marketing as a fit for your company.


If you live and die by the big deal, growing revenues faster than your industry and your competitors requires a shift to account based marketing. Demand generation and lead management does not work for companies with business models dependent on a small number of accounts but who spend a lot. Waiting for dream accounts to come to you will result in you missing your revenue targets.


For those considering whether or not account-based marketing is for them, you should ask yourself these questions:

  • Is the sales cycle long, complex, involving many stakeholders, departments, and decision makers?
  • Is the sales team required to go wide and deep in their accounts in building many relationships, or is this a situation where they sell to a single decision maker?
  • Will you make, or miss, the revenue goal based on a few big deals throughout the year?


If you answered yes to one or more of these, then account based marketing (ABM) is likely a fit for you.  Companies with more of a transaction sale defined as less than two months or so, are not a good fit. ABM is usually best applied when you’re in a long, complex sales cycle.


Account-based marketing should be targeted to serve named accounts.  These may also be referred to as Key Accounts or Strategic Accounts.  


If you want to go deeper, download the How to Make Your Number in 2017 workbook.  It’s the guide marketing leaders leverage to consistently contribute revenue growth, year after year, and is your ticket to a great 2017.



Randall LaVeau

Leverages the SBI Benchmarking methodology to help companies make the number.
Learn more about Randall LaVeau >

Randall has over 10 years of experience developing scalable sales and marketing programs that range from demand generation to website optimization and sales effectiveness. He has created, coordinated and executed lead generation plans, programs and campaigns for new customer acquisition and existing customer retention. Additionally, Randall developed and managed advanced integrated marketing plans, translating innovative concepts into actionable strategy to enhance brand and product positioning and drive revenue. Randall’s skills include marketing strategy, lead generation, persona development, inside sales team development, sales coaching and sales enablement.

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