Today’s guest article is by Jim O’Gara who is a B2B enterprise software sales executive in Silicon Valley…
“Don’t count the people you reach; reach the people that count” David Ogilvy
Marketing has always been fixated on touch and numbers have always consumed Sales. Not a bad approach for the 20th century but not for this millennium. We can watch shows like Mad Men and think of the consummate sales professionals once churned out by IBM but both are gone with the wind. Technology has changed the way buyers acquire and how vendors have adapted.
- Product and solution knowledge can now be acquired on demand.
- The desk phone is fast becoming a collector’s item.
- Target marketing tools like Marketo, Webinars, and other solutions have turned demand generation, other than for awareness, into focused market development versus scattergun messaging.
- CRM tools have given sales as well as the rest of the company a more complete understanding of the prospect and customer’s needs and history.
- And the shift to the Subscription economy has fundamentally changed both the buying and selling value proposition.
These shifts have also brought changes to the way vendors market, sell, and service companies. And for midmarket and enterprise software sales, account based marketing and sales is now an imperative in recognizing the changed market dynamics and how to maximize on the same.
At some level, Account based marketing and sales is nothing new. Companies like IBM, who largely depend on 3,000-4,000 large customers to drive their quarterly and annual sales, have always relied on focused account based selling. But the basics of this approach, tied to new organizational structures, processes, and technology have made this type of focused account development available to early stage companies and more mature businesses that want to rapidly grow their revenue.
Large account selling in the past was defined by:
- Big-deal account sales executives, who along with some support staff like a sales engineer or a technology subject expert, were the holistic face of the vendor to the customers.
- Information flow to and from the vendor to the customer was done by email, face-to-face conversations and occasionally a conference call.
- Most deals involved long sales cycles, extensive license negotiations, dramatic discounting at the end of the quarter, and finally the “sale”.
- Post sale, the agreements normally had a maintenance rider, some training and detachment by the sales organization. This created a wealth of shelfware.
Today, this has all been replaced.
Account based Marketing and Sales is a focused process and approach to customer acquisition and retention. It relies on a tight alignment and coupling of marketing and sales, as well as a redistribution of the selling organization responsibilities. It defines clear roles for Marketing Response Reps (MRRs), Sales Development Reps (SDRs), Account Executives (AEs), and the customer success and/or customer service teams.
For those familiar with the book, Predictable Revenue, Aaron Ross describes the modern marketing and sales functions as shown below.
This structure allows for specialization and focus with definable metrics for each group. It also clearly defines the responsibilities of the AE. He/she is no longer the only face to the customer. Additionally, the vendor dependency on old fashion “hunters” is reduced. Essentially, this process and division of labor produces better lead generation and lessens the company’s dependency on the sales superstars!
Account based marketing and sales are a process where each of the above functions plays a specific role. No one person carries all the weight.
Again, using the Predictable Revenue definitions tied to the Lead Development diagram below, the flow illustrates how the process works.
The Outbound process for sales development is centered around the “Ideal Customer Profile” (term comes from Predictable Revenue) or Account Based Sales Development or ABSD accounts. Both terms denotes a focus on identifying true potential customers, doing the appropriate research on each account; identifying and verifying target contacts within these accounts, and then and only then begin your outbound email campaign. The common thinking is a 3-stage quick email campaign, to draw out real near term opportunities. Those who respond are qualified and sent to Account Executives (AEs) to further develop or returned to nurture. Note that all this effort, until turnover to an AE is the responsibility of the SDR. Further note, there is no blind cold calling.
The Inbound process is centered on the broader marketing campaigns. All lead generation from these efforts go first to the Marketing Response Reps to support the inquiries and qualify them for true near or long-term interest. If identified with short-term interest, leads are past to the SDR who then folds the lead into a call out campaign.
The key focus then of Account based marketing and sales is really that of:
- Key messaging from the marketing side to a recognizable Target Account Market. While it can reach multiple industries, it’s still focused on prospects that fit an identified profile and not just the size of the account.
- The inbounds from marketing have a much better chance of fitting a targeted customer profile and can help quickly eliminate the professional web attendees or students.
- The Outbound calling process is one of targeting from the start. It’s not a Hoovers list distributed to a bunch of hopeful AE wannabees but a defined approach of targeting by a recognized SDR team noted for their value to the overall process.
- The result is less quantity of leads but a higher percent of qualified leads presented to the sales team (AEs).
Most notably in this process is that the AE is neither center of the relationship nor involved in any cold calling; a skill that most AEs lack. It also negates the old terminology of hunter and farmer.
The AE in this scenario is focused only on engaging with pre-qualified new opportunities that have been developed by MRRs and SDRs. His/her responsibilities are to:
- Assess all SDR presented SQLs for near and or long term value and put them into a forecast revenue model as a commit. Commit and probability timeframes will vary but guidelines need to be in place to focus on the true near term opportunities. Those that do not fit are returned for nurturing.
- Assemble all needed demo’s, evaluations, references, proposals, and subscription agreements for sale completion.
- Work all possible “close” opportunities to completion matched to the forecast.
- Engage customer support and satisfaction teams into the final process for turnover transition and continued nurturing.
- The key here is that the AE is fulfilling the responsibilities he/she is skilled to perform; assessing real opportunities and driving them to closure. Viewing the end-to-end flow as a process or a supply chain puts the proper perspective of the AE in the overall sales lifecycle.
- Account based marketing and sales is a funnel that is more akin to a supply chain.
- I like the above picture best, borrowed from a Slide Share presentation entitled The ABCs of ABM (Account-Based Marketing), since subscription sales are about securing new customers and retaining them as well. Keep in mind that most subscription agreements are 24-36 months in length but the opt out clause in most cases is 12 months. So the initial order is only 33-50% of the total value. Additionally, growing the initial order is as important as the first placement; both in additional functions and additional seats.
- The key to account based selling is really in targeting and the planning!
- Define the ideal customers.
- Use tools to both identify accounts and contacts within those accounts.
- Launch well planned email and follow up campaigns that are uniform.
- Establish clear definitions of value to the vendor (e.g. MEDDIC).
- Ensure timely follow up
- Use legitimate Marketing and CRM systems to track all leads through nurturing, closure or no interest (must be purged from file).
- Finally, respect for each individual function. While it may appear that the AE is the key link in the supply chain, the real success lies in placing the right value and incentives on each segment.