The other day I read a book on account-based marketing (ABM), entitled ABM is B2B, and I must say I disliked it. Capital D disliked.
My Thoughts on the Book: ABM is B2B
Why? It struck me as the kind of buzzword-laden, hype-filled, superficial-case-study-driven, strawman-arguing, compound-adjective-using [1] marketing book that seems to deliberately complexify marketing, perhaps in an attempt – as marketers sometimes do – to perpetuate the idea that marketing is a dark art best left to wizards and gurus and basically everyone else should, well, GTFO and leave us alone as we blaze the trail to ABM in the name of alignment.
A marketing book written in marketing copy style. For marketers. Sentence fragments. Big claims. Lots of benefits. Testimonials (-ish). Few features. Only after finishing the book, did it really sink in that the book was a sequel [2]. Perhaps that was the problem. I’ll never know.
I must confess the book irked me before I could open the cover. Let me get this off my chest: ABM is not B2B. ABM means account-based marketing. B2B means business-to-business [3]. They’re not the same. QED. Thanks, I’m here all week.
Perhaps “ABM is B2B” is an attempt to generate a pithy metaphor like “the medium is the message” (McLuhan), “chaos is a friend of mine“ (Dylan), or “advertising is the rattling of a stick inside a swill bucket” (Orwell). But it doesn’t even work as a metaphor. It’s like saying “fruit are apples.” No. Apples are fruit. Just as ABM is one type of B2B marketing.
But when the authors are cofounders of an ABM company, I suppose every marketing problem looks like an ABM problem [4]. When your only tool’s a hammer, every problem looks like a nail.
I was also irked at the outset because — let’s give credit where credit’s due — ABM itself has been so effectively marketed at the C, VC, and board levels. It reminds me of a cartoon from long ago where an executive is talking to their assistant:
“It’s clear that everyone needs a relational database. Please go find out what a relational database is.”
Many of the CEOs I work with are in the same situation. The board knows they need ABM. They know they need ABM. But no one’s quite sure what ABM is, and nobody wants to admit it. Hey, I’m a former billion-dollar company CMO and I’m not sure. So I bought the book to help. It didn’t.
Let’s have a taste:
And now, with new data, surveys, and customer stories we’ve witnessed, we can see what’s possible when we look at ABM as B2B. In turn, companies that are finding their way and jumping in with their own programs finally can plot where they are on their ABM journey. We call it the B2B Maturity Curve. The curve is simple, yet dynamic. Ask any company if they would prefer to be average or great with their marketing, and you know what they’d say. But they’re not all where they want to be yet. Within this curve is a roadmap outlining the movement from status quo to B2B 2.0 across every key component of ABM marketing, sales, and customer success, making it abundantly clear that most organizations haven’t reached full maturity.
Does that actually say anything?
Nevertheless, there are a lot concepts, quotes, and ideas that I like within the book. A few examples:
- The value of marketing is defined by sales. I wouldn’t say it quite that way, but yes.
- Some accounts deserve champagne, others sparkling water. Yes. As a matter of both company and go-to-market (GTM) strategy, we need to segment the market and then target certain segments [5]. Champagne, to me, is usually part of a long-term, slow nurture program.
- Your silos should burn to the ground. I don’t like the passive voice, but yes, sales, marketing, and customer success should all work together closely. You should burn your silos down.
- Counting leads for leads’ sake (a so-called vanity metric) is stupid. Yes. But only stupid marketers did it. Strawman. [6].
The book is like a stew made with tasty ingredients that don’t come together into a dish. Overall, I have three issues with the book:
- ABM is not B2B. ABM is ABM, one type of B2B marketing appropriate in some situations as a function of company and sales strategy. This blows the book up on the launchpad for me.
- Marketing can’t be more aligned to ABM than sales. You’re either aligned to sales or you’re not. If sales is all-in on ABM, great. If sales is not, then marketing can’t be all-in — and still be aligned with sales. If forced to choose among alignment targets, marketing should pick sales every time. Not ABM idol worship. Another showstopper.
- It borders on extremism. The book sometimes preaches what I might call fundamentalist ABM [7] – e.g., MQLs are bad, you should get rid of them as a concept and never think about them again. No, they aren’t. When ignorant marketers celebrate MQL volume without caring about conversion, that’s bad. But you don’t need ABM to fix that; you can do so in other ways.
Enough about the book. Let’s talk about ABM. Or should I say B2B? (I’m so confused.)
My Thoughts on Account-Based Marketing
Here’s my favorite quote on ABM, from a CRO friend:
“If what you mean by ABM is that we should start picking our customers instead of them picking us, then I am in favor.”
Here’s what I often see going wrong with ABM in startups:
- The board wants it because they want to be helpful, even if they’re not quite sure what it is.
- The CEO wants it because, well, the board wants it and more focus sounds like a good idea.
- The CRO doesn’t really want it (think: don’t fence me in) but grew up in sales and is savvy enough to nod their head in all the right places during discussions.
- The CMO wants it because the CEO does, it’s a cool marketing buzzword, and a good thing to have on the resume.
What gets implemented is a hybrid where every department does a little ABM. Salesops whips up an ideal customer profile (ICP), usually not terribly mathematically [8], and a target account list that’s often way too long. Marketing does some ABM-style programs, such as selective website customization, personalized direct mail, and ad retargeting. SDRs perform target account research and account-focused outbound. Sales assigns “focus accounts,” perhaps 10 to 30 per salesrep, so each rep has both a territory and a list of of focus accounts.
What happens? Everybody gets a little taste of ABM and not much changes. Those focus accounts? Well, if my territory is New Jersey plus 20 focus accounts, while my manager might bug me once in a while for account plans, if the territory is producing inbound leads and I’m hitting my numbers, well those focus accounts aren’t going to get much focus.
In fact, only when the territory isn’t producing leads will the focus accounts get focus. How? When the rep complains to the CRO in a forecast review about in-bound lead volume, the CRO gets to say: “you’re on the hook for generating 20% of your pipeline so get on phone and bang away on those focus accounts.” It’s a built-in protection system for the CRO who, per Kellogg’s first rule of sales management [9], knows they need one.
But are we really picking our customers? When I ran MarkLogic (where we had only about 30 reps) we had one rep whose territory was one account (NSA). On my first customer visit at Salesforce, I visited an account (Qualcomm) that was also the rep’s only account. That’s focus. New Jersey plus 20 “focus” accounts? Not so much. There’s tipping your hat to the ABM gods as a demonstration of political astuteness and then there’s actually picking your customers.
This is a high-class problem. In good markets you can build to $10M, $50M, $100M or more in a purely horizontal way, riding the back of a new, general-interest category. In fact, if you’re riding your way to $500M right now on the back of hot category, there’s a strong argument you don’t need ABM yet and you might grow faster without it. ABM is not a virtue unto itself. It’s just another way to grow revenue.
In bad markets you can’t even get to $10M on the back of a hot category (because definitionally, there isn’t one). This focuses you solving specific problems for customers, usually in specific industries. ABM comes naturally in these situations as you are unknowingly already executing it as a company-level strategy. ABM might tighten your focus (e.g., on key accounts within the vertical) and your execution (e.g., integrated cross-channel campaigns).
The second reason companies execute focus strategies early in their evolution is product completion. If your enterprise software product is MVP-level, and you have four huge customers — a bank, a pharma, a megatech, and a government agency — you are likely to get figuratively drawn-and-quartered by your customers as each pulls you in a different product requirements direction. A more strategic, chasm crossing approach would be to focus on one of those industries as a beachhead, accumulating customers with more homogenous requirements, and then expanding into adjacent markets via a bowling alley strategy.
At some point, though, most companies — even those who grew up in hot markets — decide that they can grow faster and do bigger deals with an account-focused strategy. Usually this is done in conjunction with building a channel strategy and rolls out as something like: we’re going to focus our enterprise direct sales force on accounts bigger than $2B and give the rest to channels [10]. As part of that, we’re going to focus each enterprise rep on somewhere between 5 and 30 accounts. No territory plus focus accounts. Just 5 to 30 accounts as your territory, period.
After focus, the thing I like best about ABM is its in-built reality check. Traditional marketing funnel metrics (e.g.,. MQL to SAL conversion rates) are typically not cohort-based and, more importantly, assume a linear sales flow that simply isn’t the reality in enterprise software. As I’ve often said in meetings:
People, we’re not selling toothbrushes here. There’s no simple linear flow from ad-click to landing-page to trial to purchase [11]. These are complex transactions that happen over the course of months involving multiple constituents in different roles (e.g., user, business buyer, approver). The full cycle is typically measured in quarters, engaged contacts in dozens, and touches by the score.
I love ABM because it constantly reminds you of that truth, to step back and look bigger picture at the engagement progress across target accounts and not just at MQLs and SALs. That is, however, not to say that we shouldn’t look at MQLs and SALs; we just need to do so intelligently. Moreover, at every ops review, we should have a slide [13] that looks back at recently closed deals and remind ourselves how much time, how many people, and many touches were involved in closing that deal.
I’ll summarize my views on ABM here:
- Many startups get pushed to do ABM too early for the wrong reasons. If you don’t feel the need to do ABM, I’d argue that you shouldn’t.
- ABM is, however, a muscle that develops slowly so you should probably start your ABM program about 2 years before you think you’ll need it.
- The best way to start at ABM is not by asking everyone to do a little, but by asking a select few to do a lot. Create a small dedicated strategic accounts team focused on the customers you want to pick and consisting of, e.g., 3 salesreps, 2 sales consultants, 2 SDRs, 2-3 CSMs, and one marketer. Measure that team not by your regular functional, funnel metrics but first by ARR [13] and then by an ABM scorecard. If that doesn’t work, fix it. If it does work, expand it.
In the end, traditional marketing is hanging a sign to attract customers; ABM is stalking customers. (Think: you don’t know it, but we’re your destiny.)
ABM shouldn’t be conceptualized as account-based marketing. It’s account-based everything. Or, better put, account-based go-to-market. There. ABM should be ABGTM.
Someone should write a book on that.
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Notes
[1] The attempted humor here is to accuse the book of abusing compound adjectives while simultaneously abusing compound adjectives. (Think: “I unequivocally deplore people who use highfalutin language.”)
[2] Despite many embedded references to their first book, which I disregarded as cross-sell attempts rather than saw as harbingers of possible sequel disease — where the authors have already said what they wanted to say and are effectively just saying it again, fancier, two-dot-oh-ier.
[3] The old term for B2B marketing was industrial marketing, to separate marketing to businesses from marketing to consumers.
[4] The authors Sangram Vajre and Eric Spett are the co-founders of Terminus, an ABM (their title tag says ABM, not B2B!) marketing software company that has raised over $120M in VC to date.
[5] In ancient times we were taught the acronym STP: segment, target, position. I still like it.
[6] This is one of several strawman arguments in the book. Long, long ago competent marketers stopped celebrating leads for leads’ sake. (Apologies for not gender-neutralizing strawman, but I think strawperson doesn’t work. Ideas appreciated.)
[7] The first time I saw methodology fundamentalism was with Solution Selling. The book preached that actively evaluating prospects were likely agenda-biased by another vendor and ergo that finding upstream prospects (in pain, but before starting evaluation) produced better leads. While I get the concept (and it’s an interesting one), I never took it literally — but our salesops people did. In our initial implementation they actually scored prospects with active evaluations who met BANT criteria as the lowest quality leads! (Think: “oh, they’re evaluating, don’t call them back. Already gone!”) That’s methodology fundamentalism triumphing at the expense of common sense.
[8] For an early-stage company an ideal customer profile (ICP) must be aspirational. For a growth-stage company it should be the result of a regression: identify customers who look like our successful customers. Which begs interesting questions (that I need to blog on later) about what “look like” and “successful” mean.
[9] Sales managers are some of the biggest hard-asses on the planet because they spend their careers managing salespeople, some of the most demanding employees on the planet.
[10] You might tier your sales structure here as well. For example, $2B+ accounts to a field-based enterprise team, $1B to $2B to a hub-based, mid-market team, and <$1B to channels.
[11] You can view Quip’s 30 day no-questions-asked return policy as an in-built trial.
[12] Based on a detailed quarterly study of a handful of representative accounts, perhaps by segment.
[13] While it won’t happen immediately, let’s not forget the goal isn’t “to do ABM” for ABM’s sake, but to generate higher sales productivity. If, over time, we don’t see that — well, why are we doing this again?
