The Inevitable Convergence of ABM and Classic Demand Gen Marketing

For the past few years, Forrester Research has been arguing that account-based marketing and "classic" demand generation marketing are converging. In 2019, several Forrester analysts went so far as to predict that the term "ABM" would disappear by 2024.

Forrester's recent ABM research confirms that the convergence of account-based marketing and lead-based demand generation is beginning to occur. In the 2022 State of ABM Survey, Forrester asked survey participants about the current state of the relationship between their ABM and demand generation efforts and about how they wanted the relationship to change in the future.

Eighty-two percent of the survey respondents said their "desired future state" is to have ABM and demand generation efforts that are broadly aligned (sharing people, processes and tools) or fully aligned (combined in a single function). That was up from 54% of respondents in the 2020 edition of the survey.

The evolution of account-based marketing has actually foreshadowed its convergence with classic B2B demand generation. When ITSMA (the Information Technology Services Marketing Association) introduced the concept of account-based marketing in 2003, it defined ABM as, "treating individual accounts as markets in their own right."

As originally conceived, therefore, account-based marketing was not intended to replace a company's demand generation strategy or tactics for most customers or prospects. Instead, ABM was designed to be a "special" approach to marketing that would be used with a small number of the company's most strategic, high-value customers or prospects.

Within a few years, however, many companies began expanding their ABM programs to encompass a broader range of customers and prospects. In its 2016 Account-Based Marketing Benchmarking Survey, ITSMA identified three types or "flavors" of ABM.

• One-to-One ABM - "Marketer works with key account teams to develop and implement highly customized sales and marketing programs for individual accounts; typically with 5-50 strategic accounts."
• One-to-Few ABM - "Marketer works with specific sales teams to create customized campaigns for small groups or clusters of accounts with similar business attributes or imperatives . . . usually 5-15 accounts per cluster."
• One-to-Many ABM - "Marketers work with sales to target priority accounts at scale, using technology to support issue-based campaigns with personalization; typically hundreds or more named accounts."

Collectively, these three types of ABM can cover a wide swath of the target market at most B2B companies, and the reality is, there is little difference between one-to-many ABM and modern, well-designed demand generation programs. They use similar marketing tactics and channels (digital advertising, email marketing, webinars, etc.), and they typically employ similar levels of targeting and personalization.

In the 2021 ABM Benchmark Study by ITSMA and the ABM Leadership Alliance, about half (48%) of the survey respondents said they are using one-to-many ABM. Given this level of usage and the commonalities mentioned above, it shouldn't be surprising that ABM and demand generation are converging.

Technology Convergence Is Well Underway

The convergence is already well underway in the marketing technology space. Several providers of B2B marketing automation software have added features to make their solutions more capable of supporting account-based marketing programs, while some of the leading providers of ABM software have added capabilities (such as native email) that support classic demand generation programs.

These developments are likely to accelerate the convergence of ABM and demand generation by making it possible for marketers to manage the combined function within a single technology platform.

What Convergence Doesn't Change

The convergence of account-based marketing and classic demand generation marketing will have a significant impact on how B2B companies organize and manage their demand generation operations. But it's also important to recognize that this convergence will not change the basic recipe for effective demand generation.

Account-based marketing is a powerful approach to demand generation because it is based on two fundamental principles of B2B commerce. First, many B2B buying decisions are made by buying groups, not by individuals, and ABM recognizes this fact.

Second, not all customers or potential customers are equally valuable, and the three varieties of ABM enable B2B companies to align their marketing and sales efforts - and the related investments - with the estimated value of each customer or prospect. Marketing and sales professionals can use highly effective, but resource-intensive, one-to-one ABM programs with a small number of their most valuable customers and prospects, while using lower-cost one-to-many ABM tactics for those customers and prospects that are desirable, but have lower potential value.

Image courtesy of XoMEoX via Flickr (CC).