Why GTM Teams Struggle with Selecting and Prioritizing Key Accounts for ABM

ABM, done right, should provide companies with a compounding growth engine that lands and expands their best customers and drives account profitability. When you hit the core the right way, that’s when win rates go up, stage progression accelerates, sales cycles go faster, and deal sizes increase.  When you build relationships and align with your core, you increase retention, drive customer lifetime value, and expand with your core as you provide greater value to them.

However, GTM teams are challenged with defining their ICP. They struggle with selecting, segmenting, and prioritizing accounts for ABM. More than 1/3 of respondents to Foundry’s bench-marking study said that creating a target account list and prioritizing accounts for ABM campaigns are their two biggest challenges. However, we feel the number of teams that are challenged in this area is much higher, as more than 2/3 of ABM programs under-perform in driving revenue growth.

ABM is ONLY effective if you focus on the right opportunities — but most GTM teams cannot identify their ICP for their efforts to succeed.

When you embrace ABM, you make an explicit decision to focus on specific accounts at the expense of others. If you pick the wrong accounts, you will be wasting resources, and you may even be baking in failure. However, most teams are not looking at the data to understand how and why target accounts are engaging across the buyer’s journey and customer lifecycle. They are not combining 3rd party intent data, historical performance data, and technological data that gives you the context on what key accounts are leveraging today and where they are in the innovation cycle to leverage the solution you can offer. This can help GTM teams select accounts that are early in the process so you can create a buying vision vs. react to predefined needs. This data, combined with account intelligence where you understand the “why” behind the company’s seeking, should inform accounts to target, the buyers/influencers to engage, messaging, and content. Elizabeth Ronco at Madison Logic discussed this in the podcast below:

And, most teams are not looking at the data to uncover where they provide differentiating value, where they make the biggest impact and where they can drive the greatest ARR growth.

Client Example:

OpenWorks (a facility management service provider) did not have a defined ICP where there was a reason for the facility management firm to be a must have vs. a nice to have. They focused on industry, number of sites, and size of location vs. looking for where there is true differentiation, so it’s not just about cleaning the floors, bathrooms, etc.

In looking at where they have the biggest deal sizes and the most sites, we noticed that these accounts make facility management decisions at a regional or corporate level and not the local level (a key characteristic). Yet, teams focused sales and marketing resources on accounts where decisions were made at a local level, even though there was a long road to getting regional and national pilots that way.

In looking at accounts where there were win-backs, we learned that the clients returned because the “new provider” that offered greater cost savings took a blanket approach and put their operation at risk of a shutdown by regulatory agencies. On the other hand, OpenWorks will streamline best practices across all locations BUT will consider individual site needs and requirements.

So instead of focusing on the industry, we focused on subsets like food manufacturers, healthcare manufacturers, and 3PLs/4PLs that have different types of locations with their own nuances (including different temperature zones) and cannot afford to take a blanket approach to commercial cleaning as it adds operational, financial, and governmental regulatory risk. And, within those subsets, we looked for companies that were expanding their supply chain operations and were making investments in getting to market faster, We also focused on companies where there were facility regulatory violations and warnings.

Now, it’s no longer just about cleaning. It’s not just about the activities that will be completed where accounts can compare SOWs and choose the company that can offer the most at the lowest price. It’s about removing risk from the operations so products can go to market fast. It’s about removing risk from the P&L. By getting the ICP right, they were able to create content and messaging that would reframe their prospects thoughts on facility management and how their approach impacts the supply chain, operations, and finance. They were able to create commercial insights and stories that show how only OpenWorks can solve their target accounts’ supply chain issues with their facility management approach. They were able to create content, messaging, and experiences that show how OpenWorks can play a strong role in their target accounts’ strategic priorities –which opens higher-level conversations than pain points that speak to local site facility managers.

And, more importantly….OpenWorks:

  • Increased sales efficiency as they focused on accounts that would most likely move forward with a regional or national deal.
  • Aligned with the strategic priorities of key organizations and enabled a higher-level conversation where they were no longer directed to speak to lower-level decision-makers, who would ultimately say no.
  • Designed and orchestrated account experiences that would allow them to win, protect, and expand key accounts.
  • Drove more, larger wins that stopped the QoQ and YoY revenue misses and accelerated them toward beating their goal of $1B in market share by 2030. If they continue to evolve and optimize their ABM program and ICP, they can reach their goal by 2027 (3 years ahead of schedule).

Most GTM teams focus on accounts that they can close fast now – and not the ones that can provide the greatest revenue growth.

Many GTM teams forget that ABM should not just impact the pipeline and ARR. The goal should be to drive NRR growth and greater customer lifetime value. As a result, when creating their ICP and selecting accounts, they aren’t looking at the characteristics of those companies that are providing the greatest revenue growth over the long term vs. diminishing returns. They don’t understand:

  • How well the customers they acquired fit the solution set for the challenges sales, marketing, and customer success teams are trying to solve.
  • How well they’ve adopted the solution based on internal hurdles.
  • Their willingness to change and engage with the solution.
  • How well they’ve abstracted value from the solution set that was promised to them.
  • The relationship that teams currently have with the accounts (i.e., tactical partner vs. strategic partner) and the potential for future growth.

Your existing customers should guide your ICP and the accounts you target. However, many GTM teams are not taking a close enough look at their customer accounts. They aren’t using RevOps to guide teams on the ICP and the accounts that should be selected – and then selecting and qualifying/disqualifying accounts as a team. In many cases, it’s sales driven and they’re picking their wish lists or the accounts that they think can be the quickest and easiest wins.

Client Example:

Even though DAT Freight and Analytics had as clients 13 enterprises on Gartner’s top 25 supply chain list, most of their pipeline and clients consisted of low-value deals with organizations that thought of their solution as a nice-to-have vs. must-have. Before investing in our ABM readiness program, DAT was defining their ICP by industry, freight spending, and where they thought they could have the quickest win.

They weren’t segmenting their existing customers to uncover their “best fit” and identify characteristics of those high-value accounts that were using their platform on a regular basis (making it a must-have) vs. monthly, quarterly, or yearly basis (making it a nice to have.) They weren’t looking into how and why the DAT platform was being integrated into the daily programs of the most frequent users and how they were utilizing the platform differently than the others. They didn’t look into the supply chain maturity of those accounts that used them regularly. They weren’t looking into the characteristics of those on Gartner’s list of top 25 supply chains and uncovering their strategies to see the role they can play within the strategic organization that would make them a must-have.

They were missing the customer insights that would build an ICP where DAT would be embedded within their target accounts supply chain organization, be used on a regular basis and not churn when budgets get cut. Because teams saw DAT as nice to have and used it on an occasional basis, DAT struggled to retain clients when the economy turned. They struggled to drive GRR (retention revenue) and NRR (expansion revenue),

Now, by having the right ICP – and the right messaging, content, and experiences for these ICP accounts, DAT will be able to impact their bottom line for both the near term and the long term as they will be able to protect and grow the revenues, they acquire with their ABM program.

Many GTM teams fail to uncover their active ICP to get accounts to revenue

Too many teams still think about ABM as a way to source the pipeline. But that’s what account-based demand gen motions are for. ABM should be used to get accounts to revenue – and existing accounts to greater revenue growth.

So, to be part of ABM, which should be a 1:1 program:

  1. Accounts should show intent and reach a certain engagement threshold that GTM teams align on to prove that they are worthy of spending the time and resources with an ABM program.
  2. GTM teams should have a differentiated, relevant story to share.
  3. Have a strategic priority in place where you can play a strongly differentiated role or have a key critical event. It’s the strategic priority and key critical event that makes a company a part of your active ICP as they are actively seeking to do something or solve a particular business problem.

Leff Bonney, behavioral scientist and Research Director at B2B DecisionLabs (a Corporate Visions company) led a research study to learn what segmentation criteria are most effective for predicting buying behaviors and, ultimately, opportunity wins and losses. The researchers analyzed 111 past deals and surveyed those past buyers to determine which steps they took to reach a decision and purchase the vendor’s solution. They compared segmentation factors such as personas – the role or personality of the decision maker, company size, past purchase history, industry verticals, problem profile, strategic priorities, and trigger events. The most accurate predictors of buying behaviors were the problem profile, strategic priorities, and trigger events. When the team analyzed more than 6,000 opportunities at 20 different companies, they found that, universally, problem profiles, strategic priorities, and trigger events are the strongest predictors of the buyer’s journey. The most common segmentation methods—buyer personas, industry verticals, and past purchase history, aren’t the best predictors of buying behaviors.

So, as you build your account lists and prioritize accounts for ABM, remember:

  • ABM is about investing in your future and existing tier 1 customers. Each of those customer investments carries a different weight in risk and returns, just like your financial investments.

 

  • ABM should be a GTM strategy owned cross-functionally rather than something marketing does to create demand for a set of wish list accounts that sales provides. In many cases, sales provides marketing with their wish list where marketing may have 50 accounts that all look different. There is no context nor a real reason behind account selection except that the deal would be very large for sales if, by chance, they were to get the deal. When marketing picks accounts, ABM focuses on sourcing the pipeline. ABM should focus on those tier 1 accounts that are unresponsive to campaigns, those that engaged but went dark, those that are moving slowly in the pipeline, those that have greater potential to get a larger deal size if you can get organizational buy-in, those accounts that are at-risk and those you want to expand. So sales, leadership, marketing, and account teams have to come together and focus on the KPIs and business objectives that they want to impact now before they even select accounts. There needs to be a rhyme and reason behind the accounts that you select, and it should be tied to the KPIs that the team wants to impact now and the business objectives that you want to impact.

 

  • There needs to be a strategic reason behind you targeting accounts. We need to go beyond typical segmentation factors. Segmentation is only successful if it’s actionable—it needs to help your sellers predict and influence your buyer’s decision-making process. If you can predict your buyer’s journey, you can take steps to influence that process to make it faster and easier to close the deal.

 

Click here to learn more about our ABM readiness program that will help you identify the right accounts for your ABM program.

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