Account-Based Marketing (ABM) targets specific high-value accounts with personalised engagement, while traditional marketing casts a wider net to attract a broad audience. Both have their strengths, but ABM often reports higher ROI due to its focused approach, while traditional marketing is easier to scale and cost-effective for brand awareness.
The Ultimate Guide to Account Based Marketing (ABM)
Key Takeaways:
- ABM: Higher ROI (84% of businesses report success), better sales alignment, and improved customer retention.
- Traditional Marketing: Lower cost per lead, broader reach, and easier scalability.
- Hybrid Approach: Combines the strengths of both for balanced results.
Quick Comparison:
Aspect | ABM | Traditional Marketing |
ROI Performance | Higher (84% report improved ROI) | Lower due to broad targeting |
Target Audience | Specific high-value accounts | Broad market segments |
Scalability | Limited due to resource intensity | Highly scalable |
Customer Retention | Strong focus on retention | Less emphasis on retention |
Resource Requirements | High (personalisation and research) | Lower overall |
The right choice depends on your business goals and resources. For high-value sales and retention, ABM excels. For brand awareness and quick scalability, traditional marketing works better. A hybrid approach can help balance short-term and long-term goals effectively.
1. ABM Performance Metrics
Account-Based Marketing (ABM) success hinges on tracking metrics that focus on quality rather than quantity. By prioritising meaningful interactions over raw numbers, businesses can better assess and refine their ABM strategies.
Key ABM Metrics
- Account Engagement Score: Monitor how target accounts interact with your brand. This includes website visits, time spent on site, content downloads, email replies, social media activity, and event participation.
- Pipeline Velocity: Evaluate how quickly target accounts move through your sales pipeline. This metric highlights the impact of your tailored approach and aids in revenue forecasting.
- Marketing-Influenced Customer Percentage: Identify the share of new customers who interacted with your ABM campaigns before converting. This highlights the direct role of marketing in driving revenue.
Calculating ROI for ABM
To determine the return on investment (ROI) from ABM efforts, use the following formula:
Component | Formula |
Total Cost | Marketing spend + Sales resources + Account engagement activities |
Revenue | Direct revenue from ABM accounts |
ROI | (Revenue - Total Cost) / Total Cost × 100 |
This formula illustrates how ABM can deliver strong returns when executed effectively.
Performance Insights
Research confirms the value of ABM. For instance, 84% of companies report improved ROI through ABM, while 40% of marketers note stronger alignment between marketing and sales efforts.
Best Practices for Measurement
Use a CRM system integrated with marketing automation tools to track account-level engagement with precision. Focus on the depth and quality of interactions rather than superficial metrics. Regularly reviewing these insights can help identify trends and fine-tune your strategy for better results. This approach strengthens relationships with target accounts, leading to higher conversion rates and long-term success.
2. Standard Marketing Performance Metrics
B2B marketing traditionally relies on broad metrics to evaluate campaign performance and generate leads.
Core Performance Indicators
These metrics focus on tracking volume and efficiency throughout the marketing funnel. Key indicators include:
Metric | Description | Calculation Method |
Cost Per Lead (CPL) | The expense incurred to acquire each lead | Total campaign cost ÷ Number of leads |
Campaign Conversion Rate | The percentage of prospects turning into leads | (Converted leads ÷ Total prospects) × 100 |
Sales Volume | Total revenue generated from marketing campaigns | Sum of all sales attributed to the campaign |
Customer Lifetime Value | The total revenue a customer is expected to generate | Average purchase value × Purchase frequency × Customer lifespan |
Tools for Measurement
CRM systems have simplified how marketing performance is tracked. They offer a strong return on investment, with studies showing an average return of £8.71 for every pound spent, up from £5.60 in 2011. These tools provide a solid foundation for advanced campaign analysis and better decision-making.
Real-World Success Example
Xeikon's case study highlights how traditional B2B marketing metrics can deliver results. Their multi-channel campaign, which included direct mail, email, and teleprospecting, achieved:
- 300% ROI
- 1,000 identified prospects
- 140 qualified leads
- 14% response rate for direct mail and email efforts
Improving Performance
Using the insights gathered from these metrics, businesses can refine their campaigns and boost profitability. Integrated CRM systems allow companies to:
- Monitor revenue growth
- Analyse the efficiency of sales cycles
- Assess campaign results
- Measure customer satisfaction
Strengths and Limitations
To fully understand the differences between ABM (Account-Based Marketing) and traditional marketing, it’s important to look at their strengths and challenges side by side. Below is a comparison based on key metrics:
Aspect | Account-Based Marketing | Traditional Marketing |
ROI Performance | 84% of businesses report higher ROI compared to other campaigns. | Lower ROI due to a broader, less targeted strategy. |
Resource Requirements | Demands significant investment in research and personalisation. | Requires fewer resources overall. |
Target Audience | Focuses on specific, high-value accounts. | Aims to reach broad market segments. |
Sales Alignment | 82% of marketers report improved sales–marketing collaboration. | Sales alignment is not a primary focus. |
Customer Retention | 84% report better retention and growth within existing accounts. | Retention is not as directly addressed. |
Scalability | Limited scalability due to its resource-heavy, targeted nature. | Easier to scale across multiple channels. |
Key Advantages of ABM
ABM has proven to deliver clear benefits. For example, 77% of marketers reported revenue growth through ABM. Additionally, 73% of customers now expect tailored engagement, highlighting the importance of personalisation in today’s market.
Strengths of Traditional Marketing
Traditional marketing excels at reaching larger audiences quickly. It’s particularly effective for businesses with diverse product lines, multiple customer segments, or those aiming for fast market entry. This approach works well when research budgets are tight or when broad exposure is a priority.
Implementation Factors
LinkedIn highlights the importance of team alignment, with 89% of marketers supporting ABM platforms to strengthen collaboration between sales and marketing teams. This alignment is especially crucial for ABM success.
Resource Allocation Differences
Traditional marketing typically requires less effort per campaign, making it more cost-effective in terms of resources. On the other hand, ABM’s targeted strategy demands more investment in research and personalisation. However, this approach often leads to higher returns by eliminating wasted efforts and focusing on high-value accounts.
Ultimately, the choice between ABM and traditional marketing depends on your organisation’s goals and resources. Many companies combine both strategies to balance their advantages and address their challenges effectively.
Making the Right Choice
Research from ITSMA shows that 87% of marketers who tracked ROI ranked ABM as their top investment. Deciding between ABM and traditional marketing comes down to your business goals and the resources you have available. Let’s break down how these factors influence ROI for each approach.
ROI Insights by Business Goals
Business Objective | Best Approach | ROI Impact |
High-value enterprise sales | ABM | 84% of businesses report higher ROI with ABM |
Brand awareness | Traditional Marketing | Lower cost-per-lead and broader market reach |
Customer retention | ABM | 84% of marketers report better retention and relationship growth |
Market expansion | Hybrid approach | Merges broad reach with targeted, personalised engagement |
These insights help clarify how your goals can shape your marketing strategy. Next, let’s consider how resources factor into this decision.
Choosing Based on Resources
Your available resources are a critical factor. For businesses with limited budgets or teams, traditional marketing offers a simpler and more accessible entry point. On the other hand, companies targeting high-value accounts often see 96% of B2B marketers reporting better engagement rates with ABM.
How to Measure Success
- Traditional marketing focuses on broad metrics like cost per lead and campaign reach. Around 46% of marketers find these metrics effective.
- ABM, however, uses account-specific metrics and engagement rates. This approach aligns with the 73% of customers who expect companies to understand their unique needs.
Balancing Present and Future Needs
As customer expectations grow, your strategy should address both short-term ROI and long-term goals. A hybrid approach combines the best of both worlds: traditional marketing builds initial awareness, while ABM focuses on nurturing high-value accounts. With 71% of marketers facing growing challenges in meeting expectations, personalisation and targeted engagement will continue to drive ROI.
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