Retention with ABM means using Account-Based Marketing for cross-sell, upsell and protection. But why do so many businesses come around to ABM solely for new business acquisition?
Read on to find out more about the full scope of Account-Based Marketing.
What is ABM?
ABM, or Account-Based Marketing, is a strategic marketing approach that treats your key accounts as a market of one. Although key-account marketing is nothing new to the sales profession, ABM is only now common parlance in B2B marketing teams up and down the land. Using a combination of research, personalisation and lead management techniques, ABM ‘nurtures’ leads along the sales funnel. ABM is a more-effective approach to demand generation with larger deal sizes, higher conversion rates and response rates.
What is customer retention?
Customer retention is the marketing strategy of keeping customers over the long-term. Customers that spend money on your products or services are prioritised to increase their spend (also known as wallet share) and longevity. Ultimately, the logic is that acquiring a new customer costs on average 6x more than retaining an existing customer. Even better, every 1% increase in c-sat lowers future COS by 3% according to the Journal of Marketing. So, why isn’t this a major driver behind ABM?
According to Gartner, over three quarters of buyers weigh-up moving to a new provider rather than staying put. There is a lot of equity in reminding current customers of the success of what they have or presenting options that improve on what they have. Ultimately, this approach to ABM can prompt the conversation about renewal.
Using ABM for customer retention
By definition, ABM is a highly-personalised approach to marketing lead generation. It uses high-quality content aimed at well-understood accounts and personas. The idea is that a highly-tailored approach, similar to a one-on-one conversation, is much more personalised and speaks to the individual and their needs.
Clearly, if you are interacting in this way with a contact and they are moving through the sales funnel, you are deepening the relationship. If they are an existing customer, you can use a similar approach to cement the relationship and reliance on your products or services. More often than not, there are substantial cross-sell and upsell opportunities left on the table, usually due to a lack of industry-specific market research. Think Beyond were nominated for a 3000% ABM programme where we unlocked significant opportunities on existing accounts.
Why is ABM so focused on acquisition?
To cut to the chase, an investment in ABM is often justified solely because of the need to generate new pipeline. The business case and targets mainly centre on this need. However, if sales and marketing are not as effective as you believe, there may be substantial growth available closer to home.
It is no surprise to hear that most ABM ‘specialists’ focus on new business also. ABM is still a shiny new concept to some businesses or previous implementations have failed. In fact, BCG say that “For many, ABM has proven difficult to implement, and initial efforts have frequently failed. That’s because ABM is usually marketing-led, without sufficient buy-in.”
Why not just go straight to ABE or ABX?
Account-Based Engagement, also known as Account-Based Experience, goes a level further. A major hurdle to implementing and succeeding with ABM is sales and marketing congruence or alignment. Without the two teams rowing in sync, a failed ABM programme will fall at the feet of marketing. But wait, ABE and ABX also require full alignment with the service department.
In truth, many B2B businesses have such a big challenge to implement ABM that adding an ‘E’ or ‘X’ is just too much. For some organisations who place customer experience (CX) at the heart of their approach, ABX makes a lot of sense. In fact, when you put ABM and CX together, the main benefit is retention. In summary, ABX is too often overlooked when large business with high-value, multi-year contracts see this as essential.
ABM and CX for customer retention and wallet share
To conclude, you have seen how ABM focuses down on a handful of key accounts and treats them as a market of one. Furthermore, you have seen how retention is more cost-effective than acquisition. CX helps to generate loyalty and also lowers customer churn. Is ABE (or ABX) really that far away?
Think Beyond is a marketing consultancy with a difference. Run by marketers for marketers with expertise in B2B and B2C. Our lead gen techniques are borne of career success and a proven track record. Isn’t it time to focus on retention?
If you would like to discuss ABM or CX, please email firstname.lastname@example.org.
Finally, why not take 5 and read some of our articles on leads and sales.