How to Segment Your Target Accounts for ABM using STEM | Punch! ABM

How to Segment Your Target Accounts for ABM using STEM

The Compass to Success

In the current B2B landscape, you’ll be hard pressed to find anyone who hasn’t heard of Account-Based Marketing (ABM), essentially the marketing equivalent of finding out the world isn’t flat; and all the new possibilities that are now available to explore! But just in case… here is a succinct summary of what ABM means at it’s top level.

ABM is a strategic approach shared by Marketing, Sales, and Customer Success that focuses on specific, targeted accounts. It’s all about identifying the accounts that matter most to you and dedicating your time to gathering insight on what keeps them up at night.

Using this understanding you can either give solutions to an account’s specific challenges, or closely align with achieving their goals. It’s about customising and personalising your conversations with accounts to match what their version of value looks like! A customer-centric experience.

A minty fresh approach to customer conversations

Prolonged exposure to the old-fashioned marketing method; throwing muck at the wall to see what sticks, has left a bad taste in the mouth of your current and future customers. Think of ABM as a mouthwash, it’s time to start taking an approach to marketing that focuses on really giving people what they want. That’s just good business really.

ABM hasn’t emerged out of thin air, Sales have always been doing things account-based! That is, to focus on the lowest hanging fruit, the accounts most likely to convert. It’s only now through the progression of Marketing Technology (MarTech) and access to good data, that the account-based door has been opened to Marketing.

Now that we are all familiar with the principle behind ABM, let’s discuss how it can be applied when targeting any size of organisation; scaling your approach to targeted accounts using STEM!

STEM stands for Strategic, Target, Enterprise and Mid-Market; it is essentially a way of categorising the different types of businesses from your target accounts, based on return on investment (ROI) criteria, for example size, budget etc. Therefore, the purpose of STEM is to analyse potential account ROI in order to allocate the appropriate amount of resources. It’s worth noting that when you’re doing ABM to scale, you may need to come up with a ‘lite’ version of your service in order to provide affordable, scalable service to Mid-Market accounts.

Nature makes sense

This may sound a little out there, but tree structure actually represents the entire logic behind STEM. Think of a target account as if it were a tree, the trunk represents the resources you are putting into that account. Have you ever seen a small tree with a massive trunk? Or a massive tree with a small trunk? Probably not. The bigger the tree, the bigger the trunk. The same goes for ABM. The bigger the account, the more time and resources it requires!

So STEM is a method of segmenting your target accounts based on value, in order to allocate your ABM resources effectively. If you’re using STEM bear in mind, ABM is enabled by great data…which is where intent data comes in. After looking at your STEM accounts, your intent data determines the urgency and timing for when to then apply those resources!

Time to make like Jack and cut down the bean…STEM

STEM serves as a template that scales on a case by case basis, what I mean by this is that a small marketing company’s big win strategic accounts, may in fact, fall into the enterprise or target categories of a global marketing firm.

STEM works relative to the size and goals of your business, so you need to put the time into applying it to your own target accounts.

To help you with that, here is an outline of what each category might look like, using an example total addressable market of 700 target accounts.

Let’s take a look!

*Example STEM breakdown of 700 accounts, 5 Strategic, 50 Target, 100 Enterprise, 500+ Mid-Market

Mid-market

Mid-market accounts are where the bulk of your accounts are going to be, in this example let’s say somewhere around the mark of around 500 accounts. You will have a large number of companies here, but will spend less time and resources on these accounts as the size and value of a deal is small. For this reason, the only approach that is scalable for mid-market accounts is 1:Many ABM. There is still a lot of business to be had in the mid-market collectively, but the level of personalisation in your outreach needs to reflect the potential ROI. Depending on the scope of your campaigns, these accounts might not even come into the equation; they may just be inbound opportunities.

Enterprise

Next you have your enterprise accounts, you can still expect a large number of accounts here; somewhere around the 100 mark sounds reasonable. These accounts will have a higher budget and merit more resources accordingly. You may start to use custom personas to better personalise your messaging with specific goals and pain points, as well as expanding the number of key contacts you wish to engage with at each target account. They will have enough of a potential ROI to go after with some resources, but not as much value as the target and strategic accounts. Your budget dictates whether you target these enterprise accounts with a 1:Many or 1:Few approach. Do you have enough budget to allow a 1:Few approach to this many accounts? If the answer is no, then you’d be better placed spending your budget on carrying out an effective 1:Many campaign.

Target

We’re getting down into much smaller, more focused numbers of accounts now; your Target section of, well… the target accounts… will be around about 50 accounts. These accounts will have enough dedicated budget to warrant a considerable amount of resources, with this comes an approach using sub vertical content and web experience with elements of personalisation, themed direct mail and personalised handwritten postcards. A more refined, personalised message and additional efforts across all channels. You should be choosing between either 1:Few or 1:1 ABM as your approach, where you allocate more budget per account. With more budget, you are able to learn more about each target account. A greater understanding of target accounts, allows for greater personalisation which in turn, builds long lasting business relationships and drives revenue.

Strategic

Finally, all that remains are your 5 strategic accounts. They say save the best until last and in this instance that is true. Your strategic accounts are the ones that if landed, would make your year! The pièce de résistance of ABM! These are the accounts you spare no expense to reach. With strategic accounts, there is no strict guideline on how creative you should be (apart from staying within budget). Consider guerrilla marketing, 1:1 content, 1:1 web experience, experiential, higher value direct mail, and research driven handwritten letters and postcards. These methods need to be targeting as many relevant people – within an account – as possible: influencers, internal champions, and decision makers. Actually, even people that you know won’t be decision makers can sometimes be of interest as a way to get your foot in the door! You should be hitting as many influencers from as many angles as possible, get creative and show them why you deserve their business! If you haven’t realised already (I’m sure you have), you need to be implementing 1:1 ABM for your strategic accounts!

Potential ROI should dictate your time and resource!

Account-based marketing is a highly creative and individual way to approach your future and current customers, focusing on the idea that adding value to customers drives revenue. However, increased effort and creativity is costly – it takes time and budget – so you need to be able to segment your accounts based on potential ROI!

So how exactly do you use STEM to segment your target accounts for ABM?

1) Create a list of companies that make up your total addressable market (For help see our blog on Creating Your Ideal Customer Profile)

2) Segment them using STEM (Strategic, Target, Enterprise, Mid-Market)

3) Determine relevant approach based on number of accounts & budget

4) Start creating personalised ABM campaigns that customers can’t resist!


If you have any questions about STEM, please feel free to email us at hello@punchabm.com or comment below and we will get back to you!

THREE TYPES OF ABM.
WHICH IS RIGHT FOR YOU?

One-to-one, one-to-few, one-to-many, programmatic, lite…it’s understandable why account-based marketing can seem daunting at first! But regardless of the ABM terminology being used, the basic principles are the same. Putting more resources into fewer target accounts who are more likely to convert, and provide a greater ROI. Which kind of ABM approach you should adopt depends on a number of factors. In this blog you’ll find out what the 3 types of ABM are, and which is right for your business.

the three types of ABM

So you’ve decided that adopting an ABM strategy is right for your business and that’s definitely a wise choice.

 

It’s understandable that you might have some concerns, running an ABM programme requires a shift of mind-set. It takes sizeable marketing ‘balls’ to shift resources from more typical marketing strategies to account-based marketing.

 

But that’s exactly what organisations are doing – the number of companies with an advanced ABM programme doubled from 2017 to 2018. And why?

 

Simple – because in a recent study, 97% of marketers reported a higher ROI from ABM than other marketing campaigns. Any successful ABM campaign is one that balances these three measures –

 

  • The likelihood of a given target account buying
  • The resources required to acquire them as a customer
  • The potential ROI to your business if they convert

The differences between the 3 types of ABM are driven by a need to align these factors, so let’s look at exactly what each approach involves and what factors should inform your ABM strategy.

One-to-one ABM

The original and probably best known of the 3 types of ABM, and the approach you’re most likely already familiar with.

One-to-one ABM is a strategic approach that treats your most valuable target accounts as their own individual markets. This means engaging with each of them in a specific and bespoke way.

 

A typical one-to-one campaign would involve targeting 5-10 key target accounts, the ones whose business would make your year or even change the direction of your company.

The resources required to engage with each account in a one-to-one ABM campaign are significant. With that in mind, it’s vital that you have deep insight into how likely the target account is to buy. Intent data is a great way to choose your target accounts based on whether they’re starting a buying journey.

 

By focusing on 10 accounts that you know are likely to buy, you can allocate more resources to engaging with each, knowing that they are more likely to convert and provide you with a great ROI.

You should consider one-to-one ABM as your strategy of choice if –

 

  • You can research the accounts in detail and gather detailed insights on how likely they are to buy
  • Your products and solutions are high-value and high-consideration
  • You’re selling into a mature or even saturated market
  • Your opportunity to close rate is high
  • You have clear and genuine points of differentiation from your competitors
  • Each account has a large number of key stakeholders from whom you need buy-in
  • You have the resources available to create content bespoke to each account
  • You have the available people resources to engage and nurture each target account

One-to-few ABM

One-to-few ABM, or ABM Lite as it’s also known, is a way of using the one-to-one ABM principles and applying them at scale to a greater number of target accounts.

For example, you might be dedicating 40 days per month to your top 5 accounts in a one-to-one strategy.

 

If you then wanted to reach out to your top 30 accounts, you most likely wouldn’t be able to scale up the same approach unless you have 240 days worth of resources available to do this. So what’s the answer?

 

Your best strategy would be to focus on small groups of target accounts, rather than individual accounts. These groups can then be treated as their own individual markets, in the same way as individual accounts were with one-to-one ABM.

 

The most common way to organise accounts into groups of 5-10 is by sub-sector. If you’re targeting the retail sector, your sub-sectors might be fashion, groceries, DIY and homeware.

You can then build specific content that will resonate with that sub-sector, identifying trends and solving their challenges.

Consider one-to-few ABM as your strategy of choice if –

 

  • You have a small addressable market of target accounts
  • You’re selling high-value, high consideration solutions or products
  • You have to get buy-in from 3-4 key stakeholders at each account
  • You’re able to gather insights into the challenges facing each target sector
  • You have the resources available to create sector specific content
  • You have the available people resources to engage and nurture each target account
  • Your product or solution has clear points of differentiation from its competition

One-to-many ABM

One-to-many ABM takes the ABM approach and scales it so the principles can be applied to a larger number of target accounts.

 

How many? That’s up to you, as there are no hard and fast rules as to where one-to-few ends and where one-to-many begins.

 

Similarly, you might be wondering where to draw the line between one-to-many ABM and just ‘marketing’? Well you’re not alone, there’s not a clear agreement even among leading practitioners of ABM.

 

It depends on the lifetime value of those accounts to your business, the greater the value, the fewer you should go for.

 

The average number of accounts for a one-to many campaign according to the ITSMA sits at around 100. However you may choose to go for more than this and dedicate fewer resources to each, or use an approach closer to the one-to-few model, and dedicate more resources to engaging with each account.

You should consider one-to-many ABM as a strategy if –

 

  • You want to increase brand awareness whilst also creating engagement at key accounts
  • Your solution is new to market, or the market need educating on its potential
  • There is one or a couple of key stakeholders at each target account
  • You have the available people resources to engage and nurture each target account
  • Your pipeline to close rate is low and could be improved
  • You don’t have access to information on which accounts are starting a buying journey
  • You need some accounts to convert more quickly in order to see ROI sooner

FIVE TIPS FOR ACCOUNT SELECTION

In these times of uncertainty, making the most out of your marketing budget is more important than ever. In Account-Based Marketing you reduce the number of accounts you target significantly and then increase the amount of resources you spend on them. This makes the actual account selection process very important because you can’t afford for an account that receives significant resource to just fall by the wayside. So with that in mind, here a five tips for best practice account selection.

Have you thought about targeting different industries?

People are getting scared and more cautious about taking meetings and calls. So, who is engaging?

 

Some industries are booming at the moment such as:

 

  • Video conferencing technology
  • Project management tools
  • E-learning
  • Ecommerce
  • Gaming

With an influx in demand, they might just be looking for your solution. But for industries heavily effected, you need to rethink your GTM strategy to be as humane as possible; if your solution is something that would be deemed essential to these businesses – keep helping. If it’s more of a luxury, consider targeting different industries where an influx of demand means they might be on the lookout for your solution.

Sales and Marketing, Name a Better Duo

We always talk about the importance of sales and marketing alignment, but it comes into play with regards to account selection as well. A common mistake is allowing one department to select all of the target accounts for a campaign.

 

If the sales team are solely responsible then you run the risk of them giving you all of the ‘problem’ accounts that they have yet to achieve any traction with. As Jamie Hardin, Senior Marketing Manager of ON24 explains “ABM should be viewed as augmenting the current strategy, not a ‘Hail Mary’ initiative on an inactive account.” Similarly, it would be foolish for marketing to be solely responsible without using the information that sales already have on the accounts that they’ve been engaging with.

This could be information on which accounts are reaching a contract renewal date, previous positive conversations with the clients, or even contacts that could have used your services in a previous role at another company.

By combining the information marketing has alongside insights from sales, your account selection can lay the foundation for a successful campaign.

Are you intent on this?

Utilising intent data is the best way to select accounts. This helps you understand which companies are in a buying window based on the websites they’re visiting and the content they’re consuming. However, platforms such as Bombora and Nexus aren’t at everyone’s disposal, which is why a combination of the above tactics gives the next best chance of selecting accounts that are most likely to convert.

 

Account selection is perhaps the biggest factor in the success of an Account-Based Marketing campaign. Good accounts, that fit your ICP and are showing intent are bound to be successful, whereas accounts that aren’t selected on insight and reasoning are likely to fail. There’s never a sure fire way to pick accounts that are destined to convert, but by following these tips you’ll have a solid foundation for your ABM programme.

Do it early!

One of the most consistent mistakes we come across with account selection is doing it too late in the ABM journey. After first defining your ideal customer profile or ICP (link to other blog) and selecting your sector, you should be looking to choose your accounts. Prioritising selection early on in the process will give you ample time to gather insight into them, allowing you to really personalise your message that will resonate with the target DMU.

Make Sure They Fit Your ICP

Using an ICP to frame your account selection ensures that your target accounts are most likely to be a good fit for your business. It also ensures that you don’t fall for those ‘dream’ accounts that you may have put on the list because you want the logo on your website, or you’ve always dreamed of working with. If they aren’t right for the programme, you shouldn’t be targeting them. It’s not about if you want them, as much as it’s about if they want you.

So, you’re thinking about adopting Account-Based Marketing…

Fantastic! But there are three different types of ABM; one-to-many, one-to-few, and one-to-one. So, which one is right for you? Luckily, we have a handy little calculator that will tell you exactly that.