Account Based Marketing

Imagine yourself in charge of a multi-million dollar business, negotiating contracts with multiple vendors for supplies, computer hardware, and software.

One of your favorite vendors introduces you to several additional services that can update your existing systems and provide you with equipment and software specifically tailored to your planned expansion. As these goods and services match your exact business needs, you choose to enter into a contract with that vendor.

Instead of targeting the largest group of customers possible, account-based marketing targets a single major customer (usually an existing customer, but sometimes a new prospect), treating a single “key account” as a complete market to conduct market research and developing sales strategies with. When account-based marketing strategies are enacted effectively, they can result in huge contracts—as it did with Northrop Grumman, which landed a $2 billion contract with the Virginia Information Technologies Agency in 2003.

• Businesses look to existing suppliers to offer innovations; on average, decision-makers expect to be contacted five times a year about new services
• Seventy-eight percent of decision-makers agree that marketing approaches made by new suppliers are poorly targeted
• Eighty-one percent of them are more likely to read a communication containing personalized content

Who employs account- based Marketing?

Account-based marketing approaches typically benefit the information technology industry the most. Purchasing decisions surrounding computing and telecommunications systems require extensive research, planning, and cooperation, causing businesses to develop comprehensive contracts with each other.

Other types of companies who gain advantages from this approach include:

• Chemical companies
• Engineering and construction companies (which often market to government agencies)
• NGOs (non-governmental organizations) engaged in social and economic development

For what types of customers is account based marketing effective?

Account-based marketing strategies are generally directed toward large firms purchasing high commitment items or services—either in terms of volume, or in terms of future relationship.

Information technology purchases fit this ideally, as computing and telecommunications systems must be updated frequently to take advantage of new technology and software. Account-based marketing aims to both up-sell and cross-sell products and services to such firms, and establish a framework for future sales to the firm as it grows. 

Since account-based marketing tactics hope to increase the volume of business with a specific company, it represents a high-stakes investment. Selecting the right accounts will increase a company's chances of success when implementing marketing strategies. Ideally, the key account should be a firm that shares a significant interest with the company, has an established track record with finances, and has a demonstrated interest in pursuing a long-term business relationship.

How is account based marketing campaign developed?

Effective account-based marketing involves gathering data, developing relationship/mutual awareness with the target company, and coordinating with marketing and sales teams in their outreach efforts.

First, the marketing team must identify their top accounts, and rank them according to potential for increased business. What do the accounts value? How can the company provide that value? What are the costs?

When the teams decide on a target account, market researchers identify that account's needs, the account's past decisions, and what marketing tactics they've been susceptible to.

Advocating for their company, marketers map their capabilities and potential offerings to the target account. Wherever possible, should involve the account’s own executives in selecting plans based upon both available and potential offerings.

Leveraging this information, account-based marketing teams support sales by developing content specific to the target account. All communications—e-mails, presentations, face-to-face meetings—are tailored to fit this client. 

Finally, the marketing department reviews the campaign with established metrics—because “if it can’t be measured, it’s not marketing”—and adapt the ongoing campaign accordingly. Many purchasing decisions at larger firms go through several levels, and take months to complete. The data that’s compiled will also be used in future campaigns, drawing lessons for approaching other accounts, and scaling approaches accordingly.

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