Is account-based selling a part of your go-to-market strategy?
Why? Why not?
An account-based selling approach to growth could stem from the following reasons.
- Your offering caters to a specific segment of a larger market, e.g., B2B outsourcing companies in the IT services space.
- Your product-led growth is tapering off because of competing products.
- The existing inbound marketing funnel is providing marginal growth.
When you sell to enterprises and check one or more points off the list above, the lead-based approach becomes futile. Through our failures and triumphs of losing and closing deals, we have now learned that it makes more sense to customize our account based selling approach and strategy to convert rather than going through the entire range in a sales funnel.
The Pareto Principle indicates that, in a B2B set-up, about 80% of revenue comes from only 20% of customers. In such a scenario, becoming strategic about the accounts that bring in the most revenue and investing more time, revenue and manpower in engaging and growing them has become imperative.
In the mid-2010s, account-based selling or hyper-segmented selling emerged from the concept of account-based strategy. Even though the idea is comparatively recent, it holds the potential to alter the reality of how organizations buy and sell. In fact, a report by Gartner, 2020 predicts that Account-Based Selling (ABS) will be the basis of sales for most technology vendors, and the volume of this market will exceed $5 billion per year.
Enterprise Sales demands the shift of focus from ‘quantity’ to ‘quality.'
What is Account-Based Selling?
Account-based selling is a strategic ‘hyper-segmented’ sales process that has been developed to pursue a few but high-value accounts rather than several individual leads.
It focuses on enterprise selling in the B2B context to target larger accounts with large deal sizes and non-linear buying journeys. In such purchase processes, an average of 11 stakeholders are involved in the decision-making and ABS tries to incorporate all the key people in the transaction, taking into account their business interests and offering them a consultative, customized solution.
Account Based Selling takes a holistic view and relies on cross-organizational alignment. It involves coming together of the various departments such as Sales, Customer Success, Marketing, Finance, Product, Engineering, and the C-suite within an organization to align on the same goal and strategy. It requires the teams to work together to generate high-value engagements with the people in these accounts across a number of platforms with an approach that is tailored to that account’s need.
It is no longer a numbers game, but a value game with ABS.
Account-Based Selling: KPIs
While transitioning to the account-based methodology, updating and tracking relevant KPIs becomes crucial. Following are some you can start with:
Account Conversion Rate
Conversions are the estimation of the success of your account-based selling strategy. Following are some parameters that you can compare conversion rates with for better comprehension of the impact ABS is having on your organization.
- CAC: Customer Acquisition Costs
- LTV: Customer Lifetime Value
- ACV: Average Contract Value and
- Length of the Average deal
ABS improves engagement with your accounts.
Despite a long nurturing process, you can quantify development by tracking how keenly the right people at an account are engaging with you. Engagement could be anything from if they talk to your sales team, if they are using your products, if they are interacting with you on your socials to if they respond to your marketing efforts.
You can also track success in engagements by channels and figure out what the people in a particular account positively respond to.
Rich, scientific data is one of the most important investments you will make in your account-based strategy. Data quality is built through exhaustive research of your target accounts. You need to understand divisions within your target account and identify the key stakeholders within them. Your data should include their roles and contact information and a built-in mechanism to update this information as and when it changes.
Sales Cycle Length
The sales cycle length is the number of days it takes for a deal to close. It becomes important to measure this in an effort to optimize the process through focus on the needs of the account. In ABS, personalization is the key identifier in achieving that.
White space is the gap between the information you have about the account you are targeting and the information you need to close the deal. Efforts should be made to keep this space as narrow as possible to increase the overall account-based selling effectiveness.
Reduced white space opportunity will help you tailor content and communication that is more accurate and relevant for your accounts. While tracking account-based selling metrics, the focus should be on quality and long-term insight driven customer relationship building and revenue would follow.
Is Account-Based Selling for you?
Now that you know what KPIs you will need to track, let’s dive into if ABS is for you.
Transitioning to an account-based strategy requires significant time, manpower, and investments. You need to pit the following factors against the metrics that are discussed in the above section to evaluate what is best for your organization.
The ABS strategy lets you allocate resources towards targeting larger accounts and close fewer deals but expand your revenue and deal size.
Jon Miller from Engagio talks about the WHO, the WHAT, and the WHERE of account-based sales development to evaluate if it’s worth dipping your feet into.
The WHO describes the accounts you need to go after and the people in those accounts. The more accurately you can understand your buyer, the better- as it may give you a clear understanding of who you are marketing and selling to.
Buyer Personas should include elements like your account’s industry, their firmographics, technographics, their objectives, priorities, challenges, and role of people in that account.
You can also map out the step-by-step process that your buyer personas follow to make a purchase. What are their objectives and the time period over which the purchasing process plays out?
In addition to the accounts, the ‘WHO’ also includes the people in your accounts. The number of people involved in the purchasing decision seems to be rising and therefore targeting every single one of them is crucial to prevent the deal from stalling or falling through when one or more of your contacts changes jobs, goes on leave, gets sick, and so on. This relationship mapping helps you facilitate consensus by helping you identify potential blockers so you can address their concerns beforehand and prevent them from pausing the deal in its tracks.
The ‘WHAT’ part includes a couple of things.
It starts with what you can say to the people in the accounts you are targeting that would be relevant to them and will actually make them engage. The churn rate is low when your communication with your account is clear and consistent and you uphold what you profess.
It also includes what you sell. For example, ABS is a better fit for high-value solutions and subscription-based products than a one-time purchase product.
The ‘What’ also includes the size of the deal. The larger the deal, the more effort you will be able to put into being effective and relevant to that account. Assume it to be a pyramid divided into three sections. At the top of the pyramid, each account is to be treated as the market of one. Here, you need to understand the company and their business, map their buying centers, understand who the people are in these buying centers, and use that insight to create completely customized activities. The second section partly requires such attention while the third can be automated.
The WHERE part includes where you actually reach out and engage with these accounts.
While you are mapping your Buyer Persona, it is also helpful to comprehend where the people in your accounts go for information, what channels they use for communication, and what is the best way and time to get in touch with them.
Nurture the prospect, get them acquainted with who you are, and why are you reaching out while making sure that you don’t go overboard with your contacts or over-communicate.
Benefits of Account-based Selling
Now that you have decided that Account based selling is for you, here are some of the benefits you can look forward to reap once you adopt and engage the account-based selling strategy:
- Adopting Account-based selling for enterprises provides better revenue with respect to Annual Contract Value (ACV) and Lifetime Value (LTV) of an account. TOPO reports a 75% increase in ACV and 150% in LTV with ABS.
- It also increases inter-organizational collaboration.
- Since it is insight-driven, ABS takes the form of consultative selling as opposed to the simple product or service selling.
- It tailors your offering as a solution to the challenges your buyer is facing therefore giving you a competitive advantage amongst other sellers that might be pursuing the buyer.
- ABS leads to high-touch insight driven relationships which have become all the more important in a virtual environment.
- It has the potential to pull down sales barriers, increase the deal size, shorten the sales cycle length and provide greater ROI.
- Account-based selling calls for deeper and broader data-driven relationships with accounts thereby aiding in growth and not just retention of an account.
- The account-centric approach lets you balance your product and solution allowing automation and customization to co-exist.
How to implement Account-based Selling in your Organization?
Now that you recognize the advantages ABS brings, I hope you are ready to implement ABS in your organization.
Educating and enabling your teams to understand why you are doing things differently and how it is going to benefit them and the organization is an important process to get right. This will get everyone on the same page and excited about going in the same direction.
The Implementation part starts with defining the ICP and Buyer Persona of the accounts you would want to target with your account-based strategy. If you wish to target multiple Buyer Personas, you need to have a unique story to tell to those different buyer personas. It has to be specific to each one of them and well-thought-out. Another important thing to consider is the buying journey of your account which is no longer predictable in the context of enterprise selling. Gartner reports that this journey isn’t linear but forms ‘loops’ wherein each buying job gets revisited.
Then, review your existing customers and accounts to check if they fit the template you have fashioned based on the above criteria.
Create a target account list that includes your existing customers as well as new ones where you see the potential. Segment them into tiers and develop strategies in accordance with their Buyer Personas, the industries they are in, and the challenges they are facing. The focus should be on customizing your offering as a solution for their problem.
Your solution should be fashioned through collaboration within your organization and co-creation with your customers. Data should be at the heart of the insights you build your relationships with the accounts on. Involve the key stakeholders and influencers within the account as well as industry bodies for collaborative interactions to create a value-solution.
With account-based selling, the customized solution being offered should evolve based on the feedback from the account. This strategic framework once implemented, should be tracked in real-time for revenue growth, relationship health and lifetime value of an account.
The execution tools for such a solution provide digitized access to all stakeholders and use data-driven, intelligent insights to improve productivity, performance and speed of operations. It links your ABM to ABS and can be customized to your existing sales methodology.
This transition doesn’t happen all of a sudden. You need to test and execute your strategies at a smaller scale to figure out what works, what doesn’t and what your impact can potentially be. It is wise to follow the 'crawl, walk, run and then fly' approach.
This implementation and execution of the ABS model requires a distinguished level of discipline within the organization. The account-based selling strategy is to be documented and choreographed so that people across the departments in your organization know when they are participating, how they are participating or if they are participating.
ABS in its initial stages requires patience and introducing it within organizations, especially within sales divisions, can be taxing when your sales team has been used to playing by the short-term rules of quick revenue generation and being rewarded for it.
To conclude, all I would like to say is research well. Research your buyers, their industries, their challenges, the measures they are currently taking to tackle those challenges and everything in between. Then make an informed choice if ABS is right for you. The benefits of adopting an account-based selling strategy outweighs the initial resistance it generates. In the past couple of years, technology has evolved and buyers have dramatically changed in the way they purchase or interact with us making account-based selling a necessity for enterprises.