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Account Based Marketing vs Lead Generation: Which is Better for B2B?
Reading Time: 7 minutes
When it’s time to choose a marketing strategy for your B2B company, you should never make a blind decision. Why? Because certain strategies work better for different industries! This is certainly the case when it comes to account based marketing vs lead generation.
Although both marketing strategies have been proven to be wildly successful, there are many differences between the two. For instance, account based marketing has certain characteristics that make it extremely compatible with B2B. Meanwhile, lead generation tactics often harvest a higher yield for B2C companies than for B2B.
Why is that? Well, you’re about to find out!
In this article, we’re going to answer all of your questions about account based marketing vs traditional lead generation marketing, including:
- What is account based marketing?
- Why should B2B companies consider account based marketing over traditional lead generation marketing?
- Can lead generation still be fruitful for B2B companies?
- How can you easily transition to account based marketing?
Let’s get started!
What is Account Based Marketing?
Account based marketing, better known by its acronym, ABM, is a marketing technique that targets specific high-value customer accounts through the creation of tailored content and offers. Once the target accounts have been defined, marketing and sales efforts work together to address the specific needs of each account.
In other words, the goal of ABM is to pursue their ideal customer and invest a lot of marketing effort into very specific people or enterprises. As you can see, this marketing strategy is very pinpointed.
What is Traditional Lead Generation Marketing?
Lead generation is one of the primary tools used in inbound marketing, although it is sometimes implemented in outbound marketing strategies as well.
In essence, the ultimate goal of lead generation is to attract ideal prospects to a particular product or service through compelling campaigns (such as the promise of a ‘free e-book’ or ‘exclusive webinar’ that the prospect can access if they give you their email address). Once the prospect has been ‘captured,’ the lead is nurtured over time and slowly sent through the marketing funnel.
Through the strong relationship, you create with the lead during the nurturing process, the hope is to convert them into paying customers and build brand loyalty.
Unlike ABM, lead generation seeks to attract a variety of interested prospects, not just select accounts.
Account Based Marketing vs Lead Generation: The Fishing Analogy
Now let’s compare these marketing styles. To make this comparison, we’re going to use something we like to call “The Fishing Analogy.”
In general, there are 2 types of fishermen: Artisanal Fishermen and Sports Fishermen.
The Artisanal Fisherman
On one hand, artisanal fishermen have a good idea of the type of fish they would like to catch and where to find them. The type of fish they hunt for swim in big schools and are usually easy to find. The artisanal fisherman uses a big chunk of bait to attract the fish to him and then casts a wide net to capture many of them all at once.
Although each individual fish doesn’t bring in a ton of money on its own, the artisanal fisherman is able to net and pull in a lot of them onto his boat.
The Sport Fisherman
On the other hand, sport fishermen have a very specific type of fish they want to catch. Oftentimes, this fish is a prize fish, like a blackfin tuna or a marlin.
The prize fish can be hard to find and catch. In fact, the sport fisherman has to target, study, and pursue the prize fish in order to successfully catch it.
Usually, the fisherman has to use a very specific type of bait and fishing strategy (such as trolling a line) to get the prize fish to bite. However, once the sport fisherman finally catches the prize fish, it will bring in A LOT of money!
You’re probably wondering what this has to do with marketing. Let us explain.
Lead Generation Attracts Schools of Fish
Lead generation is like the artisanal fisherman. It’s a great strategy for companies that have lower priced products or services that are aimed at a larger market. Unlike the sport fisherman, the artisanal fisherman attracts fish to his boat and casts a wide net in hopes of catching many qualified fish. This is similar to the lead generation strategy.
Lead generation creates a generalized chunk of bait (such as a “free e-book”) that attracts many interested prospects into its net and then takes those qualified leads through the sales funnel.
ABM Pursues Prize Fish
Account based marketing is like the sport fisherman. This strategy is a fantastic tactic for companies that have high involvement, high priced products or services that meet the needs of a very specific target. In particular, ABM works well for industries that have a high touch packaged offering made specifically for niche markets, like enterprise accounts.
Unlike the artisanal fisherman, the sport fisherman has to pursue each prize fish and use tailored fishing tactics to catch them. This is similar to the ABM strategy.
Instead of casting a wide net, ABM offers personalized bait that is very enticing to a particular prospect in hopes of landing the perfect catch! Once the prize prospect is lured in, the sales funnel widens as the lead is nurtured down into the funnel.
Is Account Based Marketing Better for B2B?
Now that you understand account based marketing vs lead generation, which one is the best marketing strategy for B2B companies?
The quick answer is ABM. As a matter of fact, when a business owner asks us which strategy is best for their B2B company, we almost always recommend ABM.
However, there are special considerations you must take into account before diving head-first into this strategy. After all, you want to make sure it’s the right fit for you and your team!
Be Mindful of These Considerations
For starters, ABM is most beneficial for businesses that offer high priced and very industry-specific products or services. Plus, if you have a very specific niche market with a set amount of prized fish, then this marketing strategy is for you!
Furthermore, if your offering(s) require a lot of involvement to onboard and implement (example: a complicated SaaS platform), then you should also consider ABM as your go-to marketing solution.
Lastly, if your business is unable to get real support from the marketing operations and sales teams or create high-value, personalized content at the account level, then you might want to avoid ABM. Why? Because this type of marketing takes a lot of time and dedication, so you’ll want all hands on deck! Here’s the good news: You will reap a BIG reward if you implement your strategy properly.
Can B2B Still Benefit from Lead Generation?
Yes, of course! In fact, lead generation is sometimes used in tandem with ABM. It all depends on your business model and what you are selling.
Ask yourself these questions:
- Do you have the additional capital to spend on lead-generation campaigns?
- How big is your audience? Is it worth the investment to try to draw these people in through lead generation?
- Do you have a lead nurture program to push prospects through the marketing funnel (ex. email sequences)?
If it makes sense for you to incorporate lead generation along with your ABM strategy, then go for it!
How to Transition Your Company to an ABM Strategy
Many B2B industries can benefit from this type of marketing strategy. If you think ABM is the right fit for your company, then here’s what you need to know if you want to add this strategy to your marketing mix.
1. Recognize Your Ideal Customer Profile
One of the #1 characteristics of ABM is the ‘ideal customer profile,’ also known as the ICP. Your ICP is the account (or enterprise) that would benefit the most from your product or service.
For example, Khameleon Software offers software designed specifically for project-based businesses, in particular, office furniture dealers. Their ICP would be businesses that operate in the commercial furniture industry, such as Haworth Office Furniture.
Once you know your ICP, you can create tailored content and offers that are personalized to each big account.
2. Align Your Sales and Marketing Departments
Next, you need to ensure your sales and marketing teams are on the same page when it comes to ABM marketing. You will need to target high-value accounts that hold the biggest potential business opportunity.
Since ABM starts with a particular set of accounts (which inverts the typical sales funnel), you will need to have all of your ducks in a row BEFORE you begin to market to these accounts. You will find that your sales team will be heavily involved in this process – more so at the beginning than other marketing strategies may demand.
3. Gather Rich Data on Target Accounts
In this step, you should consider if you want to invest in ABM tools, such as predictive analytics and B2B data enrichment programs. These tools will help you mine rich data from your target accounts and can help you find quantitative business information that will aid in your overall strategy.
Account-based marketing is a fantastic strategy for B2B companies. However, we understand how difficult it can be to put together a strategy that will actually see success. ABM requires a team to plan, execute and launch.
Whether you need help deciding between account-based marketing and lead generation or you’re ready to jump straight into ABM, feel free to consult experts who have launched ABM growth sprints regularly. Contact us for an ABM-free strategy session if you need help.
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