On a recent call about account-based marketing (ABM), it occurred to me that accounts given the marketing “white glove” treatment were typically large accounts managed by a direct sales force. So I asked myself the (somewhat provocative) question: Isn’t every account worthy of this same service?
It should be noted that companies leveraging SaaS as their primary business model generate more than 65% of their revenue from existing accounts, with at least 25% of that revenue coming from upsell and cross sell initiatives. With that in mind, I believe that every account warrants the same attention that top accounts (those that drive the majority of revenue for the provider today) receive.
While a true ABM approach is indeed costly for the vendor/partner to maintain, the cost of losing a customer is greater. In fact, it costs five times as much to attract a new customer than to keep an existing one satisfied, according to Gartner. Talking in software numbers: The average price of a acquiring a midsized cloud ERP customer is generally about $40,000. It’s easy to see how quickly these numbers can add up when customer management is not performing at a high level.
Taking an account-first mentality for every account is key. It will drive retention with your customers today, and also ensure that every customer organization is treated with the unique attention they deserve, regardless if they buy $40,000 or $40 million worth of software each year.
The challenge, of course, is that it’s expensive to maintain an account-first approach. It requires a strong and highly focused customer management team that works closely with the accounts. The team needs to focus not only on service and support post-sale, but also on maintaining a joint marketing plan that ensures regular touch points and helps the customer continue to get value from the solution.
A customer-first approach requires in-depth knowledge of the account to ensure that marketing is an ongoing exercise and not simply there to make the sale or get the account to be a reference for the vendor.
With cloud requiring a shift to subscription-based pricing, a high-touch model, while key, has to morph to scale. The goal has to be to give customers the right attention, at the right time, based on purchase patterns and needs. You can’t afford not to do this: Lifetime value is critical to be profitable in the cloud. Losing a customer early means not only losing acquisition costs but also losing a lifetime revenue stream.
What are some ways to scale ABM practices?
- Change your approach: Given the high cost of maintaining an ABM approach, the key to success is to start with a shift in mentality within the provider organization. Customer-first requires a change in mindset from specific customers to all customers. It’s about servicing them in the right ways at the right times—all the time, depending on their unique needs. Much like a marriage, account-based marketing is a long-term relationship. It doesn’t end if your spouse loses their job or resume only when they win the lottery.
- Be present: Maintain regular contact with accounts in order to continue to bring them value. This can be done in many ways: sharing best practices of a customer they can relate to, educating and informing them on industry trends to help them maintain a competitive edge, or even inviting them to webinars or events.
- Focus on customer service: The buying journey for the customer never ends, nor does their relationship with you. Even if a costly, high-touch model may not be for every customer, it’s key to pick some scalable activities that you can do for as many accounts as possible in order to stay top-of-mind. Include them in regular customer councils with industry peers or assign a marketing relationship manager to their account. At any given point in time, it’s your role to know what their challenges are via a trusted advisor relationship. Don’t wait until they cancel their contract to reach out — it’s too late. (You wouldn’t wait until your spouse is dating your best friend before working on your marriage, would you?)
- Extend ABM to your ecosystem: Not all accounts are direct, so it’s important to extend your best practices to partners. In many cases, they are the front-line to the customer. Thus they should have the same access to customer relationship activities that you offer as well. This is especially true for small and mid-sized accounts, a key growth segment for all regions. Help your partners understand and leverage the activities that you offer to large accounts direct sales services. You’ll win and retain accounts in new market segments faster and build a happier partner and customer base.
There is no better time than now to develop and execute an ABM approach based on a long-term trusted relationship. An ABM focus drives recurring revenue and lowers the cost of sales. The challenge is balancing the costs across all accounts with a level of service that can be delivered in a feasible manner. While this may sound daunting, it’s not if you stick to a plan, and most importantly, stay in touch in the right ways with clients. The result will be a long-term happy partnership for years to come.
Want more marketing strategies that get results in the digital economy? See The Future Of Marketing Is Contextual.