The Story of ABM
Over the past two-plus decades, account-based marketing (ABM) has evolved from a niche marketing discipline used mainly by large IT services firms to become a core component of marketing at many B2B companies.
The Information Technology Services Marketing Association (ITSMA) (now part of Momentum) coined the term "account-based marketing" in 2003, and ABM soon became a central focus of its research and consulting.
ITSMA defines account-based marketing as ". . . a strategic approach to designing and executing highly-targeted and personalized marketing programs to drive business growth and impact with specific, named accounts." [Source]
The popularity of account-based marketing has grown dramatically because B2B marketers perceive that ABM is highly effective. In the 2023 Global State of Account-Based Marketing survey by ITSMA and ABM Leadership Alliance, 81% of the respondents said ABM programs deliver a higher return on investment than "traditional marketing initiatives."
As originally conceived, ABM was viewed as a special approach to marketing that would be used with a company's most valuable customers. Within a few years, however, the successes achieved by early ABM adopters prompted marketers to look for ways to scale account-based marketing so that it could be cost-effectively used with a broader range of accounts.
In its 2016 Account-Based Marketing Benchmarking Survey, ITSMA documented the rise of three distinct types of ABM - strategic ABM (a/k/a one-to-one ABM), ABM Lite (a/k/a one-to-few ABM), and programmatic ABM (a/k/a one-to-many ABM).
This three-part framework has become the standard way to describe account-based marketing, but the reality today is that one-to-few and one-to-many ABM aren't materially different from state-of-the-art conventional outbound B2B demand generation marketing.
This is not true for strategic ABM, which embodies a very different marketing approach. With strategic ABM, marketing activities and programs are components of a multi-faceted management plan for a single customer account, and they are customized for that account.
Strategic ABM Still Rules
While one-to-few and one-to-many ABM have broadened the reach of account-based marketing, the linchpin of any successful ABM initiative is still strategic ABM.
Strategic ABM remains the most widely-used type of account-based marketing, and most ABM thought leaders and practitioners agree that strategic ABM - if done well - will generate a higher ROI than one-to-few or one-to-many ABM. Put simply, it's hard to have a high-performing ABM program if don't master strategic ABM.
The functional centerpiece of a successful strategic ABM initiative is the account management plan. With strategic ABM, a separate plan is developed for each account in the initiative. This is the first distinguishing characteristic of strategic ABM. It's truly one-to-one.
An effective strategic ABM account plan is also distinguished by the process used to develop it and the content it contains.
Developing the Plan(s)
Strategic ABM is often implemented in companies that already have a key account management (KAM) program. Key account programs have existed in some large B2B companies since the late 1950s. Early KAM programs were usually led by a sales executive, and their primary focus was managing sales opportunities.
The discipline of key account management has evolved substantially over the past six decades. Many companies now have well-developed KAM programs that are designed and executed by cross-functional account teams, and led by dedicated, senior-level account managers.
Today, the best KAM programs are focused on identifying longer-term growth opportunities in the account and maintaining the long-term health of the customer relationship, as well as on shorter-term sales opportunities.
In these circumstances, strategic ABM is essentially synonymous with key account management. A marketer becomes a member of the account management teams (usually no more than 5) and brings marketing expertise to the formulation of the account management plans. ABM activities are fully integrated into the account management plan so that the company has a single, cohesive strategy and plan for each key account.
Content of the Plan(s)
An effective strategic ABM/KAM account management plan is essentially a full-fledged business plan that is focused on an individual customer. The objective of the account planning process is to formulate a strategy and set of actions that will (a) protect the current revenue you are earning from the customer, and (b) enable you to grow the revenue you earn from the customer.
I used the term "business plan" intentionally because an effective strategic ABM/KAM plan is similar to the kind of business plan you would develop for any strategic move, such as the introduction of a new product or service, or an adjacent market expansion.
You can easily find dozens of business plan templates by performing a simple Google search. The framework that I've found works well for an account management plan contains six major components.
Customer Description
The objective of this portion of the plan is to provide a comprehensive picture of the customer's business operations, competitive position, organizational structure, and financial performance.
This portion of the plan should describe:
- The market(s) the customer serves and the economic attractiveness and growth potential of those markets
- The products and/or services the customer offers
- The types of individuals and/or organizations the customer primarily serves
- The customer's principal competitors
- The customer's current and recent financial performance
- The customer's business strategy and strategic priorities
- Any recent or planned structural changes (expansions or contractions)
- The customer's senior leadership team
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