But after decades of human-based, adrenaline-fueled cold calling, we’ve recently entered an entirely new era. An era steered by intelligent, targeted prospecting, tuned by hyper-personalization and driven by data.
Today we’ll be discussing a relatively old business selling model, but thanks to the technological innovations have created quite a buzz around lately - Account-Based Sales.
What all topic we’ll be covering:
- What is Account-Based Sales?
- Why Do Businesses Implement Account-Based Sales Practices?
- What is the Role of Marketing in Account-Based Sales?
- How to Implement Account-Based Sales Strategy?
- How to create your Ideal Customer Profile?
- How to define your Buyer Personas?
- How to prepare your targeted account list?
- How to structure your sales outreach strategy?
- When Should you Implement Account-Based Sales?
- What Factors Determine the Success of Account-Based Sales?
- How to Measure the Success of Account-Based Sales Methodology?
Account-Based Sales has recently exploded as a common practice in sales and marketing circles. In 2016, it was counted as one of the hottest B2B sales trends.
Gartner predicted it will become the default selling framework for most tech vendors that exceed $5 million in annual revenue.
So what exactly is Account-Based Sales?
Account-Based Sales (ABS) is a model that focuses on targeted clients, runs on buyer-centricity, and provides end-to-end, hyper-personalized customer experiences. An account-based model treats every company (an account) as a market of one. Instead of one salesperson targeting a single contact within a company, an entire team is dedicated to targeting multiple stakeholders at the prospective customer’s company.
As part of an account-based strategy, a business identifies a set of target accounts. Then, the sales and marketing departments work together to offer targeted content to contacts within target accounts. This process is used to nurture them through the buyer’s funnel until they ultimately become a customer. The Account-Based Selling model is often used by B2B companies.
So why is there such a dramatic shift towards an account-based model?
Why businesses are adapting to Account-Based Sales?
The account-based selling model has its roots in the 1990s when companies began to realize the need for more personalized marketing. As consumers began to crave more personalized buying experiences, many marketers turned to account-based marketing to meet those needs.
Personalized marketing has been followed for more than a decade now but the personalized approach was not followed in the sales process initially. Among B2B and enterprise companies, salespeople are still largely focused on individual leads. So for B2B businesses, when we move towards the decision-making stage of a sale, the IDC survey shows that the number of people involved in a large technology buying decision has increased from 5 to 7. CEB research shows the same thing in the Harvard Business Review: the number of people now required to formally sign off on large purchases has increased from 5.4 to 6.8, making it hard for sales reps to convince a group of decision-makers for a sale.
Here comes the need for an account-based model, a more focussed, hyper-personalized prospecting approach in sales. A sales rep can no longer follow a lead-based approach to convert a committee of decision-makers into customers. Rather it’s time we start leveraging different technologies across the sales stack and strategically hunt targeted accounts rather than chasing individual leads.
Using ABS, instead of your company’s salespeople targeting one or a few individuals within a prospective customer’s company, an entire sales team is dedicated to prospecting multiple stakeholders at the target company with highly personalized messages.
B2B sales are largely focused on a committee of people, and not on a person to person sale. Therefore, the account-based sales model has been proven quite a success in B2B sales and hence the dramatic shift towards account-based sales.
Before we explore more about Account-Based Sales, it is important to understand the role of marketing in Account-Based Sales?
Successful customer engagement is driven primarily by marketing-related processes. In a typical ABS cross-departmental team, marketers develop content and experiences aimed at guiding prospects towards a purchase. Marketers also analyze and predict prospects’ behavior by studying the results of these account-specific interactions. Marketing is what fuels the emotional incentive to get your prospects to opt-in, download, watch, subscribe, buy, etc.
Now that we've covered the need and importance of ABS, how do you actually map out a successful Account-Based Sales campaign?
How to implement an Account-Based Sales model?
Account-based selling is a multi-touch, multi-channel strategy coordinated across the entire company to pursue a target number of high-value accounts. Generally, marketing and sales work together to close these accounts and customer success delivers a custom onboarding experience. Moving forward, account managers and marketers work collaboratively to upsell and cross-sell these clients. Account-based sales require company-wide buy-in and collaboration between sales reps, marketers, people in customer success, finance, and product development as it aims to deliver a tightly integrated experience across departments during the whole buying process and also after the sale is made.
Here is a comprehensive guide which covers all the necessary steps and checklist you need to cover for implementing account-based selling:
1. Internal Coordination:
When you are implementing an approach that requires resources and work from different departments, naturally the first important thing you worry about is internal alignment. Team orchestration is an essential part of establishing an effective ABS strategy.
Account-based selling is neither a sales nor a marketing initiative - it’s a combined approach that requires cross-departmental collaboration. So it is important that sales and marketing teams work hand in hand and coordinate with each other for the account-based strategy to be successful.
To improve your sales and marketing alignment, here are some tips:
- Operate under the same goals: If your sales and marketing teams are working toward separate goals, they are less likely to be engaged with one another and give them competing initiatives. A common goal gives the two departments the motivation to work together.
- Shared reporting: For working side by side both teams should have a systematic way of operating through the same tools and reporting. If each team has access to separate dashboards, metrics, or even worse - no analytics at all, there will be a big divide between the two departments. Keep everyone on the same page by using shared dashboards and reports.
Once your teams are aligned, you can move on to the next step of the process.
2. Creating your Ideal Customer Profile:
When you are targeting highly personalized accounts and limiting your sales to those particular sales accounts, it’s important to be highly selective with those accounts. You’re putting all of your eggs in a couple of baskets - if you target the wrong company, it’ll have a noticeable impact on your revenue and opportunity cost. Every poor fit your team targets means you miss out on a potential great fit.
That’s why a huge component of ABS is your Ideal Customer Profile (ICP). The ICP defines your most valuable customers and prospects who are also most likely to buy.
An Ideal Customer Profile (ICP) is a fictional profile containing a hypothetical description of the type of company that would realize the most value from your product or solution. A well-defined ICP allows you to identify key accounts and develop messaging to attract them and convert them into buyers.
In order to create your ICP, you must look at a combination of factors surrounding your best customers. First, make a list of your most successful customers. Then, find out characteristics and firmographic data (like no. of employees, revenue, market share, historic growth, etc.) they have in common. Analyze all the factors to make a common profile. Do they come from companies of a certain size? Are they all within the same industry? Do they use other key technologies that integrate with your product or service?
Your ICP can be as detailed or simple as you’d like - but the more specific, the better. Determine which relevant traits your best customers have in common. Then, use this profile to guide your account targeting process.
3. Defining your buyer personas:
Now that you have an idea of what types of accounts to target, you need to identify the key players within those accounts. At this step, you need to establish how to engage with those important contacts. That’s where buyer personas come into play and - often times work hand-in-hand with your ICP.
First, go through your previous deals (both lost and won) that most closely reflect your ICP. Identify the key decision-makers that you engaged with. Analyze the personas of all the key contacts. Which stakeholders tended to have the most influence? Did you usually fail to engage with a certain member of the buying committee? Were there any relationships that ultimately didn't impact the decision?
With this information, you can map out the key contacts within every account and establish buyer personas. Buyer personas are profiles of your ideal buyers. Marketers traditionally use buyer personas to identify and engage with the best prospects, but personas also serve an important purpose in an account-based selling strategy. Consider this, the average B2B purchase involves 6.8 stakeholders. Buyer personas help you understand, not only who the decision-makers are at your target company, but also the dynamics between them, their buying preferences, and much more.
Suppose you're selling marketing and sales automation software. The typical buying committee might include the CMO, the Director of Sales, a sales manager, a marketer, a representative from Sales Ops, and someone from Finance.
For each buyer persona, map out their challenges, objectives, professional goals, and their involvement in the buying process. It's also good to know where they go for information and the best way to reach them (email, phone, at events, etc.).
4. Develop your targeting account list:
Now that you've formulated the types of accounts you'll target, the people within those accounts you'll connect with, you're ready to build an actual account list. Aside from choosing accounts that match your ICP, there is one key consideration you must make during the account targeting process: Account coverage.
Account coverage: Suppose you have prepared the number of target accounts and the number of key stakeholders you engage with from each account. If you have high engagement but only a small amount of accounts, you’ll close deals - but not many of them. On the contrary, if you reach a ton of target accounts but have poor engagement, you’ll struggle to convert them into buyers. So, you want to strive for a high amount of accounts and high account engagement.
It is recommended to create a target account list with different tiers. Your team should allocate a different level of resources, personalization, and attention to each, with the smallest tier receiving the most and the largest tier receiving the least.
Make sure your Sales Development and Sales teams help you select target accounts. They'll play an instrumental role in converting these prospects to customers - if they don't believe an account is a good fit, they're unlikely to truly pursue it.
5. Structure your targeted outreach strategy:
Account-based selling relies on highly targeted, personalized sales outreach - not just in terms of the company but also in terms of each key stakeholder within an account. This includes each contact’s specific job responsibilities, their purchase preferences, and their role within the larger organizational structure.
Although content creation typically falls into the hands of marketers - it’s your job as a sales rep to communicate your needs to the marketing department. What types of collateral do you need to convert more buyers? Are you lacking materials that speak to a certain industry’s needs or pain points? What tone and language do your buyers prefer? All of these considerations must be communicated clearly in order to see success with account-based selling.
The standard ABS team includes members from departments that are typically separate: Sales, Marketing, Customer Support, and Solutions/Implementation.
Here are the primary roles:
- Account executive: Runs internal meetings, shapes the account strategy, acts as the primary liaison with the prospect, and works to become their trusted advisor.
- Sales development representatives: Research the account and update the CRM, create personalized messaging and content designed to build relationships with multiple customer stakeholders.
- Marketer: Develops the overall playbook and messaging strategy, coordinates marketing campaigns, tracks the success of the program.
- Support representative: Keeps the team up-to-date on the account and surfaces issues when they arise.
- Industry marketer (optional): If a company sells to multiple industries, a subject matter expert educates the overall team and makes sure its messaging and strategy are relevant, accurate, and technically sound.
- Product manager (optional): Keeps the team and customer informed on future product updates and changes.
When you should implement Account-Based Sales?
First, before you figure out when to use ABS, be sure you understand when you should not adopt this model. ABS requires more work on the seller’s part, including a high degree of personalization, and takes longer. ABS works best for strategic/complex sales that require multiple levels of buy-in. Low value/high transaction sales tend to not benefit from this model.
If you don’t need this type of sales approach to close deals, why would you do it? Generally speaking, the less buy-in you need for a sale, the less likely you need to adopt an ABS model. However, if you’re selling into enterprises, where more buy-in is required to purchase your product or services, this model works well.
If your average deal size is greater than $50,000, sales expert and author of The Sales Development Playbook, Trish Bertuzzi, highly recommends an account-based approach.
Other than this you should ask yourself the following questions before you decide to shift your approach to Account-Based Sales:
- How ready is your organization to adopt this new sales approach? Do your sales teams have the experience and business acumen to tackle target accounts?
- Do you have both corporate and cultural buy-in?
- When it comes to customer data, do you have sufficient information to build out your ABS strategy?
Is ABS for you?
Because this model is so heavy on resources, it isn't for everyone. Here, we’ll dig deeper into the concept of account-based sales, help you figure out if the model is for you and guide you through how to get started if you discover that it’s a fit for your business.
This highly personalized strategic sales prospecting process is used primarily within B2B sales, as it’s usually too high-touch for B2C products. This model has more emphasis on high-value engagements across a number of platforms than on short-term call-to-actions such as demos.
What sales model you follow should depend on what you sell, the size of your average deal and what types of companies you usually sign as customers.
If you’re selling to small to medium-sized companies where only one or a few stakeholders typically get involved in the deal, you probably can’t - and shouldn’t - justify putting as much manpower and dedication into each prospective customer as the account-based sales model requires.
What Factors Determine the Success of Account-Based Sales?
Account-Based sales success comes down to 5 key factors.
1. Average Selling Price (ASP)
Average Selling Price is defined as the average value of your closed-won deals. Just as you expect a more complex experience when you’re buying a home vs. buying a latte, high-ASP transactions can justify the added complexity of an account-based SDR team. For recurring revenue businesses, dedicated ABSD efforts also increase the cost of customer acquisition (CAC), which puts a greater burden on the value of each customer. The higher the ASP, the more likely you are to see efficient unit economics with an Account-Based Sales approach.
2. Sales Cycle Length
The Sales Cycle Length tells you how long it typically takes your company to close a deal, measured from the first meeting until the contract is booked. Short sales cycles simply don’t allow enough time for multiple people to be involved in deals; otherwise, you risk extending the time-to-close and frustrating your customers. On the other hand, longer sales cycles require the nurturing and multi-stakeholder outreach provided by ABSD. These deals go forwards, backward, and sideways. Account-specific content from both marketing and sales development provides much-needed air cover for your overburdened AE.
3. Market Maturity
Market Maturity refers to the level of awareness for products and services similar to yours. Are you solving completely new problems or competing against entrenched incumbents? As a rule of thumb, the more novel your solution, the more resources you need to invest to properly educate your buyers about how you solve their pain. People are not proactively searching for solutions like yours, because solutions like yours have not traditionally existed. Account-Based Selling is a powerful channel for educating these markets. On the other end of the spectrum are commoditized markets, where buyers are most likely to find you when searching for alternatives to their existing solution, usually seeking a lower cost or modern features.
4. Target Addressable Market (TAM)
The Target Addressable Market is defined as the total universe of companies that could become customers. Your TAM significantly impacts your go-to-market model because it dictates breadth vs. depth. If you take the same approach to engaging 100 accounts as you do to 10,000, you’ll run through your entire market potential in a matter of months. Companies with a smaller, well-defined TAM have to apply surgical precision to their sales outreach efforts, maximizing the conversion rate of any given target. ABS provides such precision. Humans are not nearly as efficient at engaging a massive, distributed market as strategies like digital marketing.
5. Number of Customer Stakeholders / Departments
Closely related to the cycle length, the Number of Customer Stakeholders refers to the number of people involved on the customer side in any given deal. Do IT, a line of business leader, and the CFO all need to say “yes” for the deal to get done? If so, ABS can efficiently deliver your value proposition to each of these stakeholders in their own language, maximizing the chances that they will support, or at least not block, the sale.
How to measure the success of Account-Based Sales?
As your sales team begins to adopt and ramp up on the account-based selling methodology, it is important to track and measure success in order to make necessary changes and continuously improve. A great place to start is to begin actively recording and benchmarking against the following key performance indicators:
- Connect Rate (the number of accounts that engage in a meaningful sales conversation) should average above 35%. For every 100 accounts prospected, at least 35 should engage in a meaningful sales conversation.
- Pass Rate (the number of qualified leads passed to a closing rep) should average above 10%. For every 100 accounts prospected, at least 10 should result in a qualified lead for the sales team to accept or reject into their sales process.
- Pipeline Rate (the number of leads that are accepted into a sales cycle or rejected) should average above 70%.