This year, 72% of companies surveyed increased their ABM budget, according to a study from the ITSMA and ABM Leadership Alliance. The rapid success of ABM is clearly driving demand for increased investment.
But, making the shift to Account Based Marketing comes with questions of how to best fund this important initiative.
How should a B2B marketing leader think about budgeting for ABM?
What kind of budget does ABM require?
We know this is a common challenge for many B2B marketing leaders, so the team here at Engagio has put together this brief resource unpacking this critical question.
Let’s break it down:
Allocate existing budget dollars to ABM.
In that same study by the ITSMA and ABM Leadership Alliance, respondents revealed that 26% of their marketing budget is dedicated to ABM. That’s one thing that many don’t realize – building an effective ABM program doesn’t always require a larger budget. You can succeed by using your current tech stack more wisely.
The best way to reallocate budget to ABM is by taking it away from any budget spend that isn’t generating leads, opps, or revenue. That’s why having attribution tools is imperative for any modern marketer.
The act of selecting target accounts for ABM serves to focus your existing efforts to those accounts most likely to deliver more value to you (either through net-new account penetration or existing account expansion). Either way, ABM offers an opportunity to get more out of your existing marketing budget dollars by wasting less time, resources and effort filling the funnel with prospects that aren’t associated with any target account.
For example, many ABM experts recommend reallocating existing lead-based line items to your ABM strategy. For example, if you’re sending your marketing dollars on list purchases and programmatic ads, you may want to think about redistributing those resources on ABM programs instead.
Our friends at Demandbase also reiterate this effect:
- Sponsored events – before ABM, you’re running lots of events with a small budget for each. After ABM, you run fewer events (more targeted) with more budget for each.
- Field marketing – before ABM, you’re running low-touch events across the country. After ABM, you increase high-touch events in key territories.
- Advertising – before ABM, your ads may be untargeted. After ABM, you focus your ad campaigns toward a specific set of accounts.
- Content syndication – before ABM, you’re focused on lead volume with low conversion rates. After ABM, your costs decrease as you see higher conversion rates from target accounts.
Getting more budget to do ABM the right way.
Selling ABM internally can be tough. One way to advocate for an ABM strategy is to ask for an experimental budget for a limited period of time. This can take some of the risk out of the equation, rather than asking a big budget (often an ambiguous number) to roll ABM out. This way, you’re able to get budget and you’re held accountable (which every single function must be anyway).
Note: for this model to work, marketing leaders need to have bought into the merits of an account-based strategy.
Quick reminder, a recent survey by Altera Group found:
- 56% of participants said ABM provided a significant benefit to attracting new clients
- 84% said ABM provided a significant benefit retaining and expanding client relationships
- 97% said ABM had a higher ROI than other marketing strategies
It’s equally critical for your team to have all the necessary ABM tools to succeed. Even if you’ve proven some quick wins early in your ABM journey, you’ll need technology to scale. To build an ABM technology stack, start with your gameplan – technology should enable strategy, not serve as a replacement for a lack of strategy.
When requesting budget for a tool like Engagio, we recommend articulating our capabilities in the context of executing an ABM strategy:
- Establishing a foundation – matching leads and activities (in Marketo, for example) to accounts in Salesforce
- Creating engagement – run account-based plays from Marketing and Sales
- Measuring impact – understanding which accounts are the most engaged, and which ABM programs are effective at driving business results
Avoid common ABM budgeting mistakes
We’ve learned a lot about what kinds of ABM budgeting mistakes to avoid.
Don’t plan for ABM in a silo.
Jennifer Dimas, VP of Integrated Marketing & Business Operations at Plex, explains how her team determines where to place investments for maximum impact.
First, she approaches her budget with the same framework used by the company’s CMO, starting with goal-setting and focus. Her objective is to align ABM goals to departmental go-to-market goals, by asking questions such as:
- What are sales bookings targets?
- What are targets for new logo business vs customer-focused sales teams?
- Which products and services would be delivered during the year? How will that impact our ability to serve target accounts?
- What are expectations for pipeline creation from marketing / sales / partners?
A similar strategy, is to integrate the budget for ABM into other pieces of the marketing budget. For example, propose that personalization capabilities be integrated into a new website redesign, or use a target account list to help improve an already planned direct mail campaign.
Don’t over-invest in one area of the funnel
We really like how Dimas also describes the need to strike a careful balance between creating and maintaining engagement in the company’s addressable market, and the need to provide more value to the accounts that are already engaged with Plex, considering a major technological change to their business.
This type of ABM deal nurturing can be a great way to maintain a relationship with potential buyers and help them move down the funnel.
For helpful comparison, Dimas spent 20% converting inquiries to qualified prospects with programs such as field events and direct mail pieces. Only 8% of budget was spent on deals in play, as they ran a blog series and email campaign to help keep pipeline accounts engaged.
Don’t stop measuring and realigning programs against goals
No ABM plan is perfect. As Dimas writes, “we’ve been successful in some areas and less in others. The key is to measure and collaborate.” Her team measures success against targets on a weekly basis. They check in with some sales leaders every two weeks and others monthly.
The key here is that they are never surprising their partners, and always open to change. That mindset is critical to fostering collaboration and alignment between Dimas’ team in marketing and the rest of the organization. Read her full post for more insight.
Don’t go it alone
We know sales and marketing alignment is a major component of ABM, so consider splitting the bill. Sharing the cost of an account-based marketing tool with sales re-frames the purchase as a sales enablement process, not only a marketing initiative.
“At Demandbase, we’ve seen sales and marketing teams effectively partner together to invest in sales enablement tools like account insights and sales intelligence, which can help both Marketing and Sales build and iterate on their target account lists and deliver meaningful information about their key contacts.”
Ready to get started with ABM?
ABM offers the best ROI for your limited marketing dollars. Implementing can seem daunting, so find everything you need to get up and running with ABM in the Engagio ABM Starter Kit.
What have you spent less in, to invest more in this critical strategy?
The post How You Should Budget for ABM and Mistakes You Must Avoid appeared first on Engagio.