Go to them, or let them come to you? Account-based marketing and inbound marketing represent two very different approaches to gaining customers. But which one will deliver the best results?
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What is account-based marketing (ABM)?
Account-based marketing proactively targets potential customers using personal communication and lead-nurturing in a more direct way. ABM really begins with the selection of the types of companies that you wish to target. An account-based marketing approach would look at commonalities of your best customers and map out other companies that share these features.
This often leads to the creation of a targeted account list – a hit list of key companies that your organization wants to target to the exclusion of others. This focused approach is often combined with a higher level of personalization of the content that you send out to these target companies. Channels might include phone outreach, programmatic display, direct mail, and highly targeted email, landing pages or social content.
What is inbound marketing?
Inbound marketing is much broader and aims to attract customers from a variety of demographics. This approach is based on a commitment to offering value in the form of engaging and useful content marketing. Inbound marketers create or curate content that answers the questions that their target audience needs to answer in order to solve their problems. Unsurprisingly, in a B2B context, these problems line up to the solutions that the marketer is trying to sell.
Targeting with this type of approach is based around identifying the right type of company by understanding their challenges and becoming a resource for the prospect to use, in the process identifying those companies and decision makers that interact with you as a lead. By being present and helpful to the right type of decision makers, inbound marketing helps you identify and engage prospects with a pressing need. Channels typically include SEO, social media, blog content and email nurture.
Which approach is right for you?
The choice between inbound or account-based marketing can feel like being stuck between a rock and a hard place; how do you know which strategy will work best for you?
If your offering is based on a smaller number of customers each making a substantial purchase and entering into a long-term relationship – for example, a new cloud hosting solution, sold with a servicing contract – account-based marketing gives you the opportunity to understand your customer deeply and build strong connections from the first contact with your brand.
If your product is highly specialized or custom-made for each client, account-based marketing gives you the opportunity to understand your customers better and build a lasting relationship; a tactic that is much more likely to work for larger purchases. In fact, 80% of marketers told us they have seen a higher average deal size from ABM accounts vs non-ABM accounts.
However, inbound marketing is able to reach a broad range of potential customers and personas from different sectors by providing different types of content that helps to move prospects through the sales funnel. This strategy is best suited to businesses who have a wider market appeal and are able to sell at scale; for example, those who develop SaaS products.
What resources do you need for ABM?
An account-based approach means focusing your resources on a smaller number of leads, each with a relatively high probability of conversion. As a result, each prospect receives a much larger share of your effort compared with inbound marketing.
For this reason, the value and success of account-based marketing is highly dependent on your ability to identify the right people to target. Before any contact is made, you need to spend time understanding your market and getting to know the key players within it. You’ll then need to create customized, tailored content to appeal to each one.
You also need to hire and retain skilled account managers, or outsource your marketing operation to a team who are capable of qualifying leads, and then nurture profitable relationships with them once they’re on board.
Find out how to run an account-based marketing campaign in 2020, with this guide.
Is inbound marketing more cost-effective?
Inbound marketing is a passive model with a broader audience, and therefore a lower cost per interaction than ABM, which initially sounds like the most cost effective option, however, 88% of marketers have seen an improvement in conversion rates where an ABM strategy is involved.
Although you may not need a team of account executives manning phones or working trade show circuits, the inbound approach still requires considerable research and preparation on a macro level.
Rather than tailoring your approach to an individual business and its needs, you’re looking for the messaging and approach that will resonate with as many potential customers as possible.
To do that you need a sophisticated understanding of your market as a whole, and an ability to analyze it on an ongoing basis. Social listening and feedback should be used to make sure campaigns are current, relevant and effective. Unlike ABM, inbound marketing is not specifically focused on long-term, mutual business relationships, so you will be finding and onboarding new customers on a constant basis. This means you will need to take a continuing iterative approach to your campaigns and strategy to stay on top of prospect churn and be heard.
Riaz Kanani, CEO and founder of Radiate B2B, talks about how the popularity of inbound marketing means that an increasing level of personalization is required to cut through and be heard in a crowded market.
This isn’t restricted to inbound tactics, and it’s becoming increasingly necessary to include personalization techniques in all types of marketing strategies. While inbound requires personalization to be effective, ABM is built with personalization in mind and almost half (49%) of ABM marketers are already using personalization technologies to deliver their campaigns. With 69% of B2B buyers expecting an ‘Amazon-like’ experience with personalized recommendations, only 27% say companies are meeting those standards.
A combined approach
Although account-based and inbound marketing are very different, it is possible to create a strategy that combines the best of both.
Kassandra Coulombe, Sales and Project Manager at Boston Digital, highlights the problems faced by businesses who choose to use one method over the other instead of combining them to yield powerful results.
A popular approach for a hybrid strategy is to use inbound marketing to draw in potential leads, and then use an account-based method to nurture and develop those that are likely to be high-value, enabling businesses to benefit from a large audience and raised brand awareness, while still providing a personal touch and bespoke service to their most promising leads.
Whichever approach you take, the customer should always be at the center of your strategy. Remaining relevant to – and driven by – your customers’ needs is the underlying value of any successful marketing operation.