Account Based Marketing Funnels: The Fatal Flaw and How You Can Fix It
If you’re in sales or marketing, you’ve probably heard of this new marketing philosophy called “Account Based Marketing” or ABM, but what does that mean?
Why can’t I (as a marketer) just throw as many leads over the “wall” to the sales team as possible?
Simple… It’s just not working like it used to, and smart marketers are changing with the times.
So in this article, we’ll break down what ABM is, how you measure it, what the fatal flaw is, and how you can fix it.
What is Account Based Marketing?
So, before we can talk about funnels and marketing mixes, let’s define what exactly ABM or Account Based Marketing is.
Account Based Marketing (ABM) is a common term for marketing activities that are orchestrated around a group of buyers at targeted high-valued accounts.
Another way to say that is, focusing your marketing initiatives on targeted audiences and specific customer accounts and leveraging marketing technologies to serve the right marketing messages to the right target accounts at the right time.
Basically, laser focusing your marketing dollars for higher ROI.
Most often, marketing strategies at b2b companies will typically focus their marketing efforts towards a broad approach to lead generation with the goal of capturing as many leads as possible.
The inherent issue with this approach is that the funnel gets smaller towards the bottom, so the vast majority of b2b leads — over 99%, according to Forrester Research — never become customers.
While it is important to construct a diverse marketing mix, including tactics that cast a wide net and focus on inbound marketing, b2b marketers who include an ABM program into that mix are able to focus their marketing efforts on personalized marketing and penetrate higher value individual accounts.
What is an Account Based Marketing Funnel?
There are many ways to visualize this approach, but a graphic from “Flip My Funnel” (Developed in 2015 by Terminus’ CMO and Co-Founder Sangram Vajre – FlipMyFunnel.com) illustrates it best.
Sophisticated marketing and sales teams no longer think about the conversion of a single lead through stages in the pipeline.
Rather, they strategically use firmographic data and business intelligence to help them prioritize high-value accounts. Additionally, they construct ABM campaigns which utilize “first touch” attribution to build and track engagement with multiple stakeholders until the final senior decision makers at the right accounts are talking to your sales team.
What frameworks exist for marketing funnels?
One of the most comprehensive models has been developed by SiriusDecisions – the Demand Unit Waterfall.
Their original Demand Waterfall (see below) has been a go-to resource for b2b marketers and sales leaders since it was created in 2006.
The original version of the waterfall defined a set of stages in the buying process that sales and marketing teams could organize around from Inquiry to Close. Metrics were simple to track in CRM and many Marketing Automation products (such as Marketo or LeadRocket) and board decks were built around the workflow defined in the waterfall.
What is the “Demand Unit Waterfall?”
In 2017, SiriusDecisions reinvented the Demand Waterfall and renamed it the Demand Unit Waterfall to fit with the changes in buyer behavior that we are all experiencing in the market. Buyers are more educated, proactive, and in the market earlier.
Marketing and sales teams are adopting ABM strategies when constructing their marketing campaigns and now have the technology to target high-value key accounts and learn about their activities in the early stages of the sales cycle.
Checkout Datahug’s New eBook
B2B Sales Operation PlaybookLearn more
Buying is also more complex. More and more stakeholders are involved in the buying side. It’s not uncommon for multiple sales, marketing, IT and finance people to be involved in the purchase of a product or service, rather than a centralized IT or procurement manager.
The new waterfall starts with a targeted Account-Based approach where all “Demand Units” (more on that later) are identified up front for marketing and sales outreach. It then follows the usual engagement, qualification, and sales process steps.
A Demand Unit is a group of buyers in an organization responsible for purchasing a product. They have two characteristics: there are multiple people in the group, and there may be multiple groups within an organization or account.
“Demand units are defined as a buying group that has been organized to address a need the organization is challenged with. Demand units – not accounts – are usually the true targets that marketing (and product and sales) should have in mind when thinking about buyers. Buyer, needs and solution must match a demand unit to exist.” – Source: Siriusdecisions
What is the problem with Demand Units and ABM Funnels?
The first problem with implementing this approach is that CRM systems like Salesforce and Microsoft Dynamics are optimized around the old waterfall approach. It’s very easy to create a Lead and convert that onto an existing Account and Opportunity.
But, there is no easy way to systematically identify target audiences at high-value accounts and track their engagement throughout the sales cycle. Salespeople are notorious for not attaching the relevant additional contacts in the buying group to Opportunities in CRM. And Marketing teams are usually happy enough to track the source of an individual Lead and use that in their attribution models.
This means it’s very hard to make the Demand Unit Waterfall or any ABM Funnel work in an organization and it’s impossible to get actionable metrics with unrealistically high levels of CRM adoption and discipline.
So what’s the solution?
Enter Datahug. For years, companies have been able to load Leads into CRM and convert them onto specific Accounts, you end up with a lot of Contacts in the system without any real context as to why they are there.
Datahug automatically tracks who your salespeople are engaging with at their target companies, scores them for engagement, and adds them into CRM.
Recently, we’ve introduced functionality to match these Contacts to Opportunities, so that you can see, throughout a sales cycle, who your salesperson is actually is actually engaging with and how well engaged they are. Think of it as an automated way to establish and track the members of your buying group.
What does this mean for marketing?
Marketing now has a view of all the members of buying groups on all their historical deals. You can run regression analysis to see what job titles pop up on deals consistently, and what personas are typically not engaged in the deals that they are losing.
Utilizing marketing technologies, you can now develop an action plan around engagement of additional and multiple stakeholders for each of the deals in your pipeline. You can quickly see where it is worth investing in persona-based content, and what campaigns are actually helping move deals through the pipeline.
As contacts appear on the Opportunity (passively created by Datahug), you can initiate an additional email or digital campaigns to ensure they have the content they need to make a decision. And you can tailor your list building and demand generation campaigns to target all influential personas within your buying group.
What does this mean for sales?
Understanding who you typically need to engage when closing a deal enables you to create a real-time early-warning system for your pipeline.
As a manager, you can quickly sense-check if your sales team has engaged enough stakeholders, or if the right people are involved.
You can get away from the common situation where deals get all the way through your pipeline without having the appropriate people involved in the buying side.
This is known as being “single-threaded,” and it is probably the single biggest deal killer that we hear about from our customers.
You can also use that data captured historically to impress on your sales team the importance of engaging all decision makers on a deal at your next QBR (Quarterly Business Review).
Food for thought: Selling Groups
While buying groups and the concept of having multiple stakeholders on the buyer’s side is not a completely new topic, many organizations lose sight of what effort and engagement are required on their side to close a deal.
Datahug provides a similar view of who on your team is engaging with each of the stakeholders on the deals in your pipeline. It often takes an Account Executive, a Sales Engineer, a Customer Success Manager, a lawyer, and an executive to get a deal over the line. Capturing this information can help you adequately staff your sales team and add to your warning system for deals that lack the signs of closing or need help before it’s too late.
For more information, click here to talk to one of our team.