July 23rd, 2024
There is a real discussion in the marketing community, and in particular, between business people and their marketing teams or their marketing service providers, regarding inbound marketing vs. account-based marketing.
Business owners want to know which is more cost effective, which of the two produces more leads, and which can contribute more to their revenue growth and their profitability, as quickly as possible.
Let’s start first by understanding each of these and looking at their history, before we start to evaluate their differences and their effectiveness for small businesses.
In general, “Inbound Marketing”, which is a form of content marketing (often very effective) has been the standard B2B marketing strategy for the last 2 decades. It produces leads for businesses and often, great leads compared to ad placement advertising method. About 80% of business purchasing teams (even consumers, at the same rate) prefer to get company/product information in a series of articles versus an advertisement. Inbound practices produce 54% more leads than traditional outbound advertising/emailing practices. A well proven metric is that Inbound marketers double the average site conversion rate, from around 6% to 12%.
Inbound marketing also produces leads for a business owner on average about 61% lower cost compared to outbound lead generation, while 75% of inbound marketing channels cost less than outbound channels.
Now let’s compare this to account-based marketing.
Account-based marketing (ABM) has been around since 1990s. It started its popularity when PC companies looked at their clients as an account-based relationship and modified their marketing to integrate this into their sales process.
ABM is not a lead generation strategy or method, although it does occasionally generate some leads.
The role of ABM for sales and marketing teams is about creating focused awareness and engaging with potential future customers. This is done effectively when your sales team and marketing department work together to create opportunities in revenue generation and customer acquisition.
In 1990s, B2B companies realized that they need to provide powerful and personalized brand experiences with their customers (in this case, business customers), the same way B2C companies had been doing with consumers.
ABM wasn’t a popular term until 2014 when many companies started to provide the technology tools for B2B companies and marketers to better target, personalize, and facilitate marketing campaigns to the right audiences and it has since accelerated in lightning speed. In the near future, ABM will simply be part of normal “digital marketing” and will be a standard of regular marketing with no advance notice.
So how exactly does ABM work and how can it be adopted by a company to increase its revenue?
ABM essentially is an end-to-end revenue strategy model that allows a business to see its revenue generation as a team based process where marketing, prospecting, lead generation, customer acquisition and post-sales support work together and unite their efforts on pre- and post-sales accounts (customers).
Together this process offers the best possible approach for winning new customers and retaining those customers for increased profitability.
The entire process of account-based marketing happens through data-driven customer targeting, needs analysis, personalized marketing, metrics measurement, and constant quality improvement in optimization of the entire process. Feedback is of course incredibly essential to understand how effective the process is and how to optimize it further.
In one short sentence:
ABM is a smarter, more efficient, better optimized, more targeted approach for sales and marketing teams working together to generate more revenue.
ABM method is being adopted at such a fast pace that soon, it will simply be referred to as “modern B2B digital marketing”.
During 2019-2021, ABM had been adopted by business marketers in an overwhelming number, in fact 94.2% of businesses in 2021 had an ABM program. Most of these marketers have either an “early-stage ABM program”, or an “experimental pilot program”, in either case to evaluate and implement ABM within their marketing plans. Other B2B marketers are implementing processes and technologies or have a working process that they are optimizing. Very few, most certainly the early adopters have their sales and marketing teams fully integrated into an account-based program for their business.
The answer to the question for inbound marketing vs. ABM is simply this:
ABM approach allows a business to get what it wants, with precision in fact, targeting and getting the most ideal customers. Inbound marketing is just a method to bring in leads and potential prospects.
Inbound marketing and ABM, in fact, go hand-in-hand to drive growth, generate leads, and improve sales conversion. ABM is the perfect complement to your inbound marketing strategy.
Together they generate more channels, more data, and more revenue. In the decade of 2020s, it is no longer a priority to generate leads and see most of these leads either not convert, or be lost and never contacted back. A combined inbound marketing and ABM allow targeted and efficient marketing to prospects and existing customers to save both time and marketing funds and better optimize the sales and marketing process and achieve a much more effective revenue growth.
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