Account-Based Marketing: Our Initial Findings
Growing Customer Centricity Brings New Marketing Focus for Professional Services Firms: Account-Based Marketing Becomes an Increasingly Important Strategy
Through the years, many studies have shown that companies that strategically focus on their customers are more profitable and more likely to exceed financial goals of return on shareholder equity, return on assets, revenue growth and market share growth than their non-customer-centric counterparts. And, most professional services firms would agree that in the recent down economy, customer loyalty was hugely important to the revenue and profitability of their businesses.
But the tremendous growth in customer-centricity occurring in the professional services industry today requires far greater marketing customization and sophistication to be successful. As a long-time client recently told Alterra Group, “As our clients become more sophisticated in their buying, we have to become more sophisticated in our marketing and business development. To be truly relevant in our marketing efforts we have to have a much tighter connection to our customers and prospects and deliver marketing programs that are specific to their needs.”
In the past six months, Alterra Group has studied the rise in account-based marketing in professional services and the operational strategies professional firms are putting in place to capture the greatest ROI from account-level marketing investments. As part of our research, we have spoken to 50 U.S.-based practice leaders, marketers and business development executives (either through one-on-one interviews or via survey) across the management consulting, accounting, law, corporate training and other professional services sectors. In our discussions, we defined account-based marketing (ABM) as the dedication of resources, time and attention to specific accounts and prospects. In other words, each target account is a market of one.
The results of our research are intriguing. For instance, we learned account-based marketing is becoming pervasive in professional services. The vast majority of the executives we polled—87 percent—are involved in ABM initiatives and just over half (52 percent) said client retention and growth is a major factor in ABM’s rise in importance. Our findings are consistent with those of a recent ITSMA survey, which confirmed that generating demand from current accounts was one of the top five priorities of technology services marketers in 2009. The same survey found that introducing new and enhancing existing senior customer engagement programs and events was a top five action being taken in response to the economy.
We also confirmed that the recessionary economy accelerated firms’ interest in the use of account-based marketing. One chief marketing officer at a mid-sized law firm told us his management team didn’t make a strategic decision to invest in ABM. The need arose from the recognition that in the recessionary economy, the firm’s success depended on a handful of accounts. The firm shifted its strategy and resources to focus on preserving and expanding those account relationships. ABM was a natural marketing strategy to accompany this effort.
Regardless of the drivers of a greater focus on customer-centricity, account-based marketing is clearly growing in importance. Eighty-one percent of the companies we researched said ABM will become more important to their organization in the next year. And for good reasons:
- Ninety-seven percent said ABM had a somewhat higher or much higher ROI than other marketing initiatives.
- Eighty-four percent told us that a significant factor in ABM’s growing importance is its higher return on investment than other marketing techniques.
- Eighty-four percent said ABM provided significant benefits to retaining and expanding existing client relationships; thirty-six percent said the impact was major.
- Sixty-five percent said ABM provided significant benefits to attracting new clients; nineteen percent said the impact was major.
Yet despite the substantial benefits that ABM can deliver, adopting the approach is not without its challenges. Indeed, our research found that effectively focusing marketing efforts on individual accounts necessitates a far different approach than professional services marketers have traditionally taken. For instance, it requires deep account and industry knowledge to create account-relevant marketing messages. It also requires a tight linkage between sales, marketing and account teams that doesn’t exist in many professional firms today. Marketing programs must be flexible, adaptive and responsive to changing account needs. And it’s often difficult to balance the need to scale account-based marketing across the firm with the need to maintain a high level of relevance to each particular account.
Alterra Group’s upcoming research report will highlight the operational strategies professional services firms are putting in place for ABM– from team organization and skills to metrics, tools, challenges and success factors. Please ”stay tuned” for more information from Alterra Group on what professional firms are saying about building account-centric marketing programs that result in greater client retention, account revenue growth and improved win rates on strategic pursuits. To discuss this research in more detail, please contact Susan Buddenbaum.