Demand generation has been a focal point of marketing initiatives over the past few years, but there's another approach gaining significant traction: account-based marketing (ABM). While ABM is not new, it has garnered attention for its substantial benefits, especially in the realm of targeted marketing campaigns. This article will delve into the nuances between these two strategies, helping you decide which is best suited for your business objectives.
Account-Based Marketing and Demand Generation: What's the Difference?
So, how are these two marketing tactics defined, and how does a marketer determine which one to use? Think of it as fishing with a spear (account-based marketing) versus fishing with a net (demand generation marketing). Both methods have their merits, and understanding the differences is crucial to precisely targeting your audience and meeting your business objectives.
Demand generation captures as many leads as possible
A demand generation strategy aims to generate new leads from individuals at target companies. Typically, these individuals are decision-makers and influencers within the company, often holding positions that allow them to influence purchasing decisions. Demand generation focuses on casting a wide net to attract as many potential leads as possible.
Key Characteristics of Demand Generation
Wide Reach: Utilises multichannel approaches, including email marketing, social media, content marketing, and more, to capture a broad audience.
Lead Scoring: Leads generated are measured and scored based on predetermined metrics of a marketing qualified lead (MQL). This helps in identifying which leads are more likely to convert.
CRM Integration: Lead responses are captured in the company’s CRM or marketing automation system, allowing for data-driven decisions about the next steps.
Nurturing Process: Each lead is nurtured throughout the process, generating even more demand for the product or service.
Hand-off to Sales: Marketing eventually hands off the lead to the sales team once the MQL number is high enough. The campaign is considered a success if it reaches an acceptable MQL.
The Demand Generation Sales Funnel
The demand generation sales funnel starts with attracting a large number of potential leads. These leads go through a series of stages where they are nurtured and scored. The stages typically include:
Awareness: Capturing interest through various channels.
Interest: Engaging with content and beginning to show intent.
Consideration: Evaluating solutions and comparing options.
Conversion: Making a purchase decision and becoming a customer.
Throughout these stages, marketing efforts are tailored to move leads down the funnel, eventually leading to a hand-off to the sales team for final conversion.
Account-Based Marketing: A Collaborative Approach
Account-based marketing takes a more targeted approach compared to traditional lead generation. ABM is like "fishing with a spear," where marketers focus on specific accounts identified as potential buyers and long-term customers. This approach helps shorten sales cycles, boost revenue, and improve the customer experience through personalised engagements.
Key Characteristics of Account-Based Marketing
Targeted Accounts: Focuses on high-value accounts that are identified through rigorous research and data analysis.
Customised Messaging: Messages and marketing assets are tailored to the specific needs and pain points of each account, leading to highly personalized content.
Collaboration: Extensive collaboration between Sales and Marketing ensures that customers are nurtured properly and messaging is consistent across all communications.
Long-Term Relationships: Nurtures accounts for long-term relationships, aiming for bigger revenue and faster sales cycles.
The Account-Based Marketing Funnel
The ABM funnel is more streamlined and focused compared to the demand generation funnel. The stages include:
Identification: Selecting high-value accounts based on specific criteria.
Engagement: Customising and delivering personalised messages to these accounts.
Advocacy: Building and maintaining relationships with key stakeholders within the accounts.
Conversion: Turning these relationships into sales opportunities and eventually into loyal customers.
In ABM, the relationship-building ideally continues long-term, with sales opportunities increasing as the relationship matures. The sales cycle is dramatically decreased due to the nurturing of the relationship through targeted marketing campaigns.
Lead Gen or ABM: Which Will It Be?
The approach you take to increase sales and revenue will depend on your business objectives and the support available within your organisation. Sometimes a wide net campaign will serve your need to create awareness, especially if your small business cannot accommodate the need to align Sales and Marketing.
Reviewing the Basics of Each Strategy
Account-Based Marketing
Customises messages and assets to be account-specific: ABM focuses on tailoring marketing efforts to the unique needs and pain points of each account.
Focuses on an account as a whole unit: Rather than targeting individuals, ABM targets entire accounts, considering the input and influence of multiple stakeholders within the organisation.
Processes input from several people in the organisation to determine proclivity to purchase: ABM strategies consider the collective influence of different decision-makers within an account.
Extensive collaboration between Sales and Marketing: Successful ABM requires a high level of coordination between Sales and Marketing teams to ensure consistent messaging and nurturing of accounts.
Nurtures accounts for long-term relationships: The focus is on building and maintaining long-term relationships with high-value accounts.
Demand Generation
Input from multiple channels: Demand generation utilises various marketing channels to attract leads, including email, social media, content marketing, and more.
Focuses on single buyers: Unlike ABM, demand generation typically targets individual leads rather than entire accounts.
Creates persona-specific content: Marketing efforts are tailored to specific buyer personas, addressing their unique needs and pain points.
Gauges individual’s interest: Lead scoring helps identify which leads are more likely to convert based on their engagement and behaviour.
Primary relationship with Sales: Once leads are qualified, they are handed off to the sales team for further nurturing and conversion.
Prospects fall into various tracks based on the customer journey: Leads are segmented and nurtured based on their stage in the buying journey.
Marketing vs Lead Generation: The Key Differences
In the debate of marketing vs lead generation, it's essential to understand that marketing encompasses a broad range of activities aimed at promoting a product or service, while lead generation is a specific subset focused on attracting and converting prospects. Both ABM and traditional lead generation campaigns fall under the marketing umbrella but serve different purposes and use distinct methodologies.
It may seem that ABM should be your go-to strategy, but Demand Generation has its place, especially when used as a complementary tactic. Demand Generation uses a broad approach to capture as many leads as possible, while ABM takes a more direct approach, targeting known prospects.
Driving Profit with Account-Based Marketing
The main reason why ABM has caught the imagination of the marketing community is simple: it’s proven to deliver results. With it comes the ability to deliver more meaningful and relevant messages that are tailored to a precise audience. But then you already knew that. What you possibly don’t know so well are the key factors behind a successful ABM programme, or the main pitfalls to avoid. At least until you opened this ebook…
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