Explore the Strategy of 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.
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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.
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.
Source: The Marketing Practice, 2008 Enterprise Decision-Maker Index summary
Other types of companies who gain advantages from this approach include:
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. (See also B2B Marketing)
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. (see also Channel Marketing)
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.
Account-based marketing is all about depth of client engagement, including:
First, the marketing team must identify their top accounts, and rank them according to potential for increased business. What do the acoounts 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. (See also Targeted Marketing)
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.
Marketing Managers may direct account-based marketing to land significant prospects, or increase business with existing clients.
Source: U.S. Bureau of Labor Statistics
What do they do?
Education and experience: Most marketing managers have at least a bachelor’s degree (often in marketing, advertising, or business management) and substantial successful experience in their industry, in marketing, advertising, special promotions, public relations, and/or sales. Some have worked as buyers or purchase agents, and so develop their understanding of corporate marketing from the client’s point of view. Education preparing them for this career includes classes in marketing, market research, statistics, microeconomics, consumer behavior, and business law. Additionally, future marketing managers pursue and complete an internship while in school.
Market Research Analysts gather data about a market segment—or a single account, in the case of account-based marketing—to guide how a company presents its products and/or services to customers.
What do they do?
Education and experience: Market research analysts need at least a bachelor’s degree in market research (or related field, such as statistics or computer science); many jobs also require a master’s degree, particularly for leadership positions or for positions that engage in more technical research. Many analysts complete an internship while in school, and may gain additional experience in jobs which require collecting and analyzing data and writing reports.
Effective account-based marketing tactics rely upon a well-developed knowledge base and set of skills. A marketing degree program helps introduce students to this knowledge, allowing graduates to connect suppliers to customers in a competitive and complex environment.
Fundamentally, marketing involves communicating with people—or, in the case with organizations, specific groups of people with particular needs. Account-based marketing strategies help businesses develop an understanding of the needs of a specific company and its decision makers.
Marketing programs teach you how to acquire useful data to help you understand these customers and their decisions. Such programs will train you in the methods of research, data collection, and statistical analysis, allowing you to paint an accurate picture of a market’s needs, preferences, and habits. This training includes knowledge of statistics, computer science (for modeling data), and social psychology.
Additionally, courses in organizational communication enable you to understand how information moves differently in an organization than it does among individuals and social groups. This knowledge will enable you to more effectively identify clients’ (and prospective clients’) own decision-making processes, and target your communication more effectively.
To learn more about what a marketing school can do for you, request information from schools with degrees in marketing, and investigate what value propositions they offer.