Sunday, January 22, 2023

[Book Review] A Must-Read Guide To Igniting Account-Based Growth

Source:  Kogan Page

The rapid adoption of account-based marketing (ABM) ranks as one of the most significant developments in B2B marketing of the past two decades. The popularity and use of ABM have been growing steadily since it was introduced by the Information Technology Services Marketing Association (ITSMA) in 2003.

Numerous studies have shown that ABM can deliver superior marketing results, and this track record of success has led a growing number of B2B companies to adopt an account-centered approach in other customer-facing business functions, such as business development, sales, and customer success/customer service.

It's easy to find ebooks, white papers, articles and blog posts that discuss this "account-based everything" model, but these materials aren't comprehensive. Therefore, they don't provide company leaders a sound road map for implementing an account-based everything strategy.

A new book by Bev Burgess and Tim Shercliff fills this critical need. Account-Based Growth:  Unlocking Sustainable Value Through Extraordinary Customer Focus (Kogan Page, 2022) provides a rigorous and comprehensive description of how to implement an account-centered growth strategy. Bev Burgess and Tim Shercliff are the co-founders of Inflexion Group, a UK-based consulting firm that helps clients implement account-based growth strategies.

Both authors have impressive professional credentials, but Bev Burgess can speak with particular authority on the topic of account-based strategies and programs. She served as a Senior Vice President of ITSMA and led its ABM practice for many years. In 2017, she co-authored A Practitioner's Guide to Account-Based Marketing, which was the first (and, in my view, the best) full-length book about ABM. 

What's In the Book

Account-Based Growth is structured in four parts.

Part One (Chapters 1-2)

In Chapter 1, Burgess and Shercliff state the business case for making account-based growth a key component of a company's overall growth strategy. That business case is largely reliant on the 80/20 rule, which holds that 80% of a company's revenue is generated by just 20% of its customers. The authors also explain that the 80/20 rule is fractal, which means that, in many cases, 3% or less of a company's customers will produce over half of its total revenue.

In Chapter 2, the authors describe how account-based growth programs are working in practice. This chapter is based primarily on a survey of 65 B2B organizations that Burgess and Shercliff conducted for the book.

Part Two (Chapters 3-6)

Part Two of Account Based Growth discusses four elements that are essential for an effective account-based growth strategy. These are:

  • Account prioritization and revenue allocation (Chapter 3)
  • Integrated account business planning (Chapter 4)
  • Managing data, technology and operations (Chapter 5)
  • Leadership, culture and change (Chapter 6)
Part Three (Chapters 7-10)
Part Three examines the roles that a company's customer-facing functions need to play in an effective account-based growth program. Chapter 7 discusses account management and sales, Chapter 8 covers account-based marketing, and Chapter 9 addresses customer success. In Chapter 10, Burgess and Shercliff discuss how a company's senior executives can more effective engage with their most important customers.
Part Four (Chapter 11)
Part Four contains an assessment tool that will enable readers to benchmark their company's position on the key criteria for a successful account-based growth strategy.
My Take
Account-Based Growth is an important book that should be required reading for any B2B business leader who has some responsibility for revenue growth. The book is well organized, and the authors include several interviews ("Viewpoints") and case studies that provide real-world insights about account-based growth in action. In addition, the authors' writing is clear, which makes the book easy to read, even thought it takes a rigorous approach to its subject.
Burgess and Shercliff contend that ". . . companies should take a more aligned view of how they manage, sell to, market to, provide customer success and deliver services to and leverage their executive relationships for their customers, particularly the three per cent or so that are driving half their profitable revenue." Then, the authors provide detained instructions for how companies can design and implement such an account-centered business strategy.
The essence of the strategy described in Account-Based Growth is to identify the "vital few" customers that produce most of your company's revenue and profit, and then design, fund and implement coordinated marketing, sales, customer success/customer service and executive engagement programs that are specifically tailored for these most valuable customers.
In a very real sense, therefore, the strategy advocated by Burgess and Shercliff is a customer experience management strategy that is focused on a company's most significant customers.
The adoption of this strategy will represent a major change for many B2B companies, and therefore it will present several significant challenges. For example, the first essential step in implementing the strategy is identifying which of your customers are contributing most of your company's revenue and profit.
In the survey conducted by Burgess and Shercliff, more than 90% of the respondents reported having a "top account" management program. When the survey participants were asked what criteria they use to select accounts for their program, 87% of the respondents said the future growth potential of the account, and 76% said the current revenue from the account. But only 45% of the respondents indicated that they track gross profit at the account level, and only 20% reported tracking net profit by account.
Having an accurate picture of customer profitability is critically important for an effective account-based growth strategy. As Burgess and Shercliff write, "Without this information, decisions about how much to invest in these top accounts and where to allocate resources are being made in the dark."
Getting an accurate picture of customer profitability is challenging for most companies because of flaws in the costing system that most companies use. It's possible to reduce the distortions created by these flaws, and because of the importance of this issue, I'll discuss the solution in a future post.
The challenges that come with the account-based growth strategy advanced by Bev Burgess and Tim Shercliff aren't insignificant. But that strategy can also be a powerful driver of profitable growth under the right conditions. If the 80/20 rule applies to your business, Account-Based Growth is a must read.

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