Why B2B Companies Need Account-Based Marketing
Proving how account-based marketing is transformational to your organization can be done using data. Good data enhances your credibility for making the case for account-based marketing; numbers support your words. Bad data can be detrimental to your marketing efforts.
The right data to support your company’s revenue goals is essential for account-based marketing.
You can use data from your current lead generation efforts. Show the amount of money your team spent on marketing and a potential return on investment (ROI). Data demonstrating why your team needs account-based marketing should include the following items:
- Leads generated year-to-date (YTD): The number of leads that marketing generated over the past year; it can be presented as the number of leads generated monthly or quarterly.
- Revenue from leads generated by marketing: If your company had $1 million in new revenue this year, how much of it came from new leads that marketing brought in? If you have a marketing automation system, a report can show the lead source tied to revenue.
- Revenue from existing customers: While reviewing your revenue, you can determine how much came from either your current client base or new leads generated by marketing. You’ll compare year-to-date new revenue against your current annual recurring revenue (ARR).
The goal is to demonstrate that lead-based marketing is extremely inefficient. The data should show that marketing isn’t focused on the right business metric: growing revenue for your company. If your marketing team is focused on creating new leads for sales, and those leads don’t turn into revenue, then it’s a waste of resources that could have been allocated to other activities.
Measuring leads is no longer enough
Instead of trying to get new leads, focus on the best-fit accounts. Leads are ridiculously easy to get these days. Everyone already has a ton of contacts in their database. You can buy a list of leads, go to LinkedIn, or use tons of tools giving you the leads you want. Forget the leads; if they don’t produce revenue, it doesn’t matter how many leads you get.
Salespeople don’t close leads. They close accounts. It’s the accounts that turn into customers for your company’s Accounts Receivable ledger to bill for using your product or service. You don’t get income from a lead. Your company makes revenue from an account.
Maximizing your marketing efforts
Marketing is an investment. Your company allocates time, money, and resources to marketing because it’s an essential part of promoting your company’s product or service and building your brand’s presence. The purpose of marketing is to create new revenue opportunities. Account-based marketing takes your marketing efforts to a new level. You can track how much your marketing team invested per account, then report on the ROI associated with those accounts by associating your marketing efforts at the account level.
These strategies can maximize your marketing efforts using revenue as your primary metric:
- Aligning sales and marketing: Before account-based marketing, the marketing team was focused on leads; the sales team was solely focused on revenue. With account-based marketing, the marketing and sales teams agree to find the right accounts that will grow revenue. This helps develop a strategy of marketing activities and campaigns that target those accounts.
- Building credibility: With lead-based marketing, often the leads generated were useless. As a marketer, I’ve heard the horror stories from salespeople about how the leads marketing gives them aren’t worth anything. By shifting the marketing team’s focus to the sales pipeline, you’re increasing credibility with your sales team. The first step is to help the executive stakeholders in your company agree that something must fundamentally change.
- Creating business value: In your company’s annual financial statements, there isn’t a line item for the number of leads generated. You only see financial information about the revenue and profitability of your company. Focusing on revenue as a key performance indicator (KPI) illustrates the marketing team’s value to the business. Every CEO, CFO, and CSO understands that KPI. If you speak the same language, you have a seat at the table.