EDITOR’S NOTE: This article is being republished with permission from MarTech is Marketing.
You’re probably familiar with the Pareto Principle, also known as the 80/20 rule, which suggests that 80% of your profits come from just 20% of your customers, often referred to as your “best” customers. These customers’ value can be illuminated by their Customer Lifetime Value (CLV).
Now, let’s consider: do you have a clear picture of who your next best customers will be? These are the ones who will eventually replace your current top customers as they phase out or potentially enhance your profitability. I suggest implementing targeted strategies to identify and nurture these future top customers, even before they officially become clients.
The most efficient and effective way is Account Based Marketing or ABM. It requires resources, and it delivers payback. In short – it makes good sense.
Let’s peel back the ABM onion
ABM is a very precise. targeted, personalized, and measurable process focusing on a specific set of high-value customers-to-be by creating and immersing them in a personalized customer experience. It’s a strategy that’s all about the acquisition of revenue and profit. Let’s peal back the onion.
Here’s a word cloud, or a pastiche of three letter acronyms that careen around marketing. The ones you need to know right now are:
- ABM: Account based marketing.
- ICP: Ideal Customer Profile (not insane clown posse). It’s a data picture of your best customers.
- TAM: Total addressable market. Your ICP is likely a small circle inside this ballpark.
- CLV: Customer lifetime value. It is the metric that means money. How long does the customer relationship last and how profitable has it been? The objective: happier customers that stay longer and buy more.
The uncomfortable truth is that it requires the close coordination of marketing and sales (and soon Customer Success) to create and maintain the increasingly personalized customer experience. The applicable 3 letter acronym is EEW.
Your ICP is ABM’s GPS
Your ICP is a broad-stroke profile of your best customers. This is the beginning of separating the wheat from the chaff in your TAM. It is the model that ABM prospecting will begin pursuing.
Not every interested prospect is going to turn into a long-term customer. Your TAM has a subset of your ICP. It also has a subset of prospects that we call FaM (Fog a Mirror). Interestingly, given the push for sales at any cost in immature organizations, many companies wind up with quite a few FaMs on the books. The ICP is the prompt you put in your ABM sat nav.
There are three levels to a successful ICP
- The first is in broad strokes: firmographics (vertical, revenue, # of employees, location, etc.). Interestingly, a customer of ours found that by digging a bit here, the percentage of budget allocated to HR was a clear indicator that a company was really in the ICP.
- The second level lays out the preconditions, or the reasons why they may benefit from becoming a customer (e.g., targeted companies with larger legal departments will benefit from our software).
- The third level takes an educated guess at what titles to target and why (e.g., SME or subject matter expert, a key advisor to the decision making process) .
Personalization, or more specifically the ability to personalize is a key concept within ABM. This ability to personalize depends on the information we are able to gather through analysis, and increasingly from two-way communications based on trust. We may intuit that the SME in a targeted company needs detailed information. We need to learn the specific concerns and use cases for personalization to become a differentiator. We want to focus deeply on these companies and executives.
Dear Santa
The chart below illustrates the arc of personalization within ABM
On the far left, with only our ICP to keep us warm, the ability to personalize is generally “Dear Santa,” because we really don’t know much more. We can begin to offer more specific content based on assumptions, and trying to earn engagement.
We construct a preliminary consideration or buying journey, and we try to use content marketing to populate that consideration journey with what folks need to move on to the next step and eventually engage with sales.
The next step is qualitative research to generate specific and in-depth personas? Who are the people who are making the decisions and what are their personal and professional concerns and information needs?
Then we engage and have real conversations. We probe and learn, and begin to create the customer experience, personalized to the company, the customer, the buying team. Let’s not forget that B2B has always been, and always will be, personal.
Now, here’s where marketing and sales have to collaborate and coordinate. to deliver this increasingly personalized experience. They need to share intelligence and collaborate on strategies, tactics and implementation to understand and satisfy the prospect’s drivers and to be able to articulate solutions in the way they describe their challenges.
As if it wasn’t bad enough that you have to talk to those annoying customers, now marketing has to hold hands, share, and collaborate with sales?
The successful integration of marketing and sales is the topic for another day. But I’ll give you three hints:
- Management must walk the talk.
- There must be shared measurement.
- There must be shared compensation.
Of course, as we move closer to conversion to customer, you should begin an even deeper immersion in the personalized customer experience by introducing the Customer Success team.
The end game
I was part of a team doing NPS (Net Promoter Score) research, but with a strong qualitative component. Not only do we ask would you recommend Company A, but we spend most of our time probing why.
I was interviewing the C-suite decision maker of one of the sponsoring company’s best customers. I asked him, “What is the most important benefit you receive as part of being a customer?”
His answer was short and direct, “Our salesman. He’s part of our team and helps us to solve problems. He knows what we need and goes out and gets it.”
That is where you want to be. That is where ABM can bring you. ABM is a more efficient and productive use of resources and generates the highest ROI of all marketing strategies. Find, invest and create your next, best customers.
Check out these related videos/blogs from the webinar 3 Plays to Boost Marketing Performance Now:
- The B2B Marketing Strategy Everyone Misses but You Can’t Afford To, by Gordon Johnson
- Email Marketing: 4 Proven Steps to Increase Your ROI, by Barbara Sanner
About the Author
International author, lecturer and consultant, Scott Hornstein has worked with clients in all phases of marketing strategy, research, and implementation. He has worked with companies large and small to build profitability, by improving marketing performance, and reengineering the customer experience to boost satisfaction, referrals, and customer lifetime value.
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