State of ABM Report
The year marketing changed forever
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At the same time, remote working became the de facto work pattern for every B2B company in the world and is still mostly the case today. With buyers now working from home, the many ad vendors who relied on IP-based targeting were suddenly struggling to reach buyers no longer working from an identified workplace. The in-person collaboration and coordination that used to be critical for planning and alignment between marketing, sales, and customer success (CS) teams dramatically changed, forcing marketing leaders to rely more heavily on shared data to keep teams on the same page.
Now in its fifth year, the Terminus State of ABM report has always endeavored to understand the trends and patterns of how teams orient around target accounts to create opportunities and revenue. The report typically focused heavily on tech stacks and adoption trends. This year, however, we saw such a huge influx of practitioners moving to ABM to adapt to new 2020 challenges and keep up with changing baselines. Because of that shift, this year we focused on two main topics:
To say 2020 was unprecedented is both redundant and reductive. It’s the year that B2B marketing changed, likely forever. With a global pandemic still raging at the time of this publication, live events (once the lifeblood of B2B marketing teams) have plummeted to zero, leaving a smoldering crater in marketing budgets. Just how big of a crater? This chunk of budget amounted to 20% for over half of organizations, according to Bizzabo. Moreover, according to the same study, 97% of B2B marketers believed those events had a “major impact” on achieving business outcomes.
1. To highlight the efficiencies achieved by more sophisticated programs, compared to the new entrants to ABM, in order to give the fledgling class of account-based leaders an idea of what to expect. For that reason, we included respondents who indicated that they were in a “pilot” phase with their ABM program–a cohort we have historically removed from our analysis.
2. To understand how COVID impacted marketing budgets and practices. We saw tremendous movement as a result of COVID that we believe will alter the top-level goals of marketing teams permanently.
Table of contents
About the respondents
About ABM Maturity
ABM Adoption Trends
The Account-Based Promised Land
Customer Marketing Has Become a Larger Focus for ABM Programs
Lead Generation Continues To Fade To Obscurity
2020 Trends in ABM Performance Indicators
The Measurements That Matter Most
about the respondents
It bears repeating that while the “M” in ABM stands for Marketing, it’s not a practice siloed to the marketing team alone. It requires executive buy-in and support, sales alignment, and, increasingly, responsibility from CS teams, whose jobs became more difficult in retaining customers this year.
We received 313 responses with 76.8% representing marketing practitioners and another 12.7% representing marketing leadership. Other responses were predominantly from sales, sales leadership, CS, and executive leadership.
Types of Industries
This year we found responses from a broader variety of industries. In 2019, 72% of responses were from people at technology or software companies and, while they still represent the majority of the responses (57%), we saw an increase in responses from other verticals, namely business services and manufacturing.
We also saw a large shift in the size of companies responding to this survey, where companies with 5,001 - 10,000 employees suddenly dominated the responses. While that might be indicative of enterprises adopting ABM practices, it could also just be a function of the audiences of the companies promoting this survey. Regardless, this is the largest data set of larger companies we’ve seen, so bear that in mind as you read this report.
ABOUT ABM MATURITY
about “ABM MATURITY”
Throughout the report, you’ll see data separated by four ABM Maturities: Pilot, Early, Middle, and Late. Based on historical data, we have seen reliable increases in overall revenue performance from the more mature ABM programs. This year we have included individuals in a pilot program in the aggregate analysis. This did slightly skew the data, but we felt it was important to include them to paint a true picture of the current State of ABM.
Definitions of ABM Maturity
“Our sales and marketing teams are fully integrated into our account-based program.”
“ABM is a proven strategy that we are working to optimize.”
“We are currently implementing technologies and processes to further our ABM program.”
“We are in an experimental pilot phase to test ABM at our company.”
Last year we found that 23% of respondents had no active ABM program. This year, that number dropped to just 5.8%. An overwhelming majority — 94.2% of respondents- currently say they’ve got an ABM program. Of those with an active ABM program, 7.9% were in an experimental pilot phase and 43% rated their experience with ABM as “Early”.
As a vendor of an account-based platform, this is anecdotally what we saw as well. When COVID struck, we saw a flurry of inbound activity coming from companies who decided it was finally time to get around to ABM.
1. COVID spurred a rush to ABM
“Rate your experience with ABM.”
2. A continued shift from “leads” to “revenue”
Since its inception, account-based approaches have been about efficient revenue growth by focusing marketing efforts on only the best-fit accounts. While lead generation is a component of an account-based marketing program, it’s only a small part of the equation. The majority of efforts should focus on account engagement and creating opportunities with target account efficiently. Companies early in their ABM journey don’t seem to have reached that conclusion yet, with 42% of respondents looking to ABM as a lead generation strategy .More mature ABM programs eschew lead generation as a goal and align themselves overwhelmingly to new business generation and customer retention respectively, with lead gen only representing 10% of their top 3 KPIs.
“Lead generation” is a top-three performance indicator for only 9% of mature ABM programs.
“What are the top 3 goals for your ABM program?”
Middle Maturity Programs
Early Maturity Programs
Late Maturity Programs
3. Retention is the new acquisition
In 2019, 14% of respondents said that customer retention was a goal of their ABM program and 38% stated that cross-sell/upsell was a goal. This year, 61% said that customer retention and expansion was a part of their ABM program and an additional 14% planning on it with the other 17% wanting to make this a priority. Among respondents who said their ABM program was “mature”, 80% indicated that they have dedicated programs to customer initiatives.
“Do you have an account-based approach to customer marketing, retention, or expansion?”
Perhaps the most interesting, if unsurprising, finding from the 2020 State of ABM Report is how companies are choosing to invest in their account-based program vis-a-vis their overall marketing program. We found that overall marketing budgets fit a bell-curve of change– some programs reducing their overall budget, some increasing it, but most respondents’ budgets stayed the same.
4. Mature ABM programs are resilient
The same is not true for how budget cuts affected ABM programs. We found that companies with a mature ABM program actually increased the amount of investment in their ABM program, even if their overall budget was reduced. This indicates that account-based programs are resilient, even to global pandemics, as a strategy to drive efficient growth.
Year-over-year, we’ve seen the same trend: as account-based programs become more embedded into a company’s sales and marketing strategy, those programs become the main revenue channel for companies. This year, the results are clear as day. "Mature ABM" programs have seen account-based practices embed themselves in most of their revenue generating efforts. More than three-quarters of their demand generation resources are focused on ABM. And the returns accompany the effort as almost 80% of new opportunities come through these programs and 73% of their overall revenue is attributed to ABM.
Even brand new programs are seeing the benefits, with early companies generating approximately one-third of their revenue from their account-based program. If we correlate the large influx of fledgling account-based programs with the revenue performance achieved by later maturity programs, it’s safe to say that the sea change in B2B marketing has finally occurred and will reshape modern B2B go-to-market strategies.
5. 2020 is the year B2B marketing changed forever
For Mature ABM Programs
ABM ADOPTION TRENDS (2018-2020)
Respondents said, “Our ABM program. is mature. Our sales and marketing teams are fully integrated into our account-based program.”
“How would you classify your organization’s stage of ABM implementation?”
Seeing a large influx of marketing programs moving to an account-based program, the number of early- and middle-maturity companies diluted thenumber of teams indicating that they felt their program was “mature.” Said differently, we had a similar number of respondents in each cohort year over year for “middle” and “late” maturity respondents, but the number of “pilot” and “early” responses diminished their overall presence.
However, when asked to rate their program’s maturity on a scale of 1-10, with 1 being “early” and 10 being “mature”, the average score given was 6, indicating that respondents on the whole are trending towards being more mature.
“On a scale of 1-10, where 1 is very early and 10 is very sophisticated, where would you rank your experience with ABM?”
THE ACCOUNT-BASED PROMISED LAND
As account-based programs mature, they become increasingly ubiquitous and synonymous with overall revenue generation strategies. While “pilot” and “early” stage programs focus a minority of their overall demand generation efforts to ABM, “mature” programs make target accounts the focal points for their marketing and sales efforts, producing outsize revenue performance. Late maturity programs dedicate over 2/3rds of their marketing horsepower to an account-centric strategy.
“What percent of your marketing efforts are dedicated to ABM?”
“What percent of your outbound efforts are dedicated to ABM?”
“What percent of your sales opportunities were generated through an ABM approach (as opposed to general inbound/outbound)?”
“What percent of your company’s overall revenue is attributed to ABM?”
CUSTOMER MARKETING HAS BECOME A LARGER FOCUS FOR ABM PROGRAMS
We asked respondents to indicate what the top three goals for their account-based program are and they are nearly identical to the responses we got in 2019 with one exception—customer retention and expansion. Given the adversities beset on companies this year, with 50% of B2B decision makers indicating that budgets have been cut midway through 2020, it’s not surprising to see marketing teams turn their focus to their customer base to retain existing revenue. One surprising finding, however, is that for companies with a mature ABM program in place, 60% of them indicated that customer retention was one of their top three goals– and the second most important goal overall.
“What are the top three
goals of your ABM program?”
2020 Program Goals
Because we had a hunch that customer retention and expansion was going to be important to account-based programs this year, we tested our hypothesis by separating that question from the rest and asked it outright. We found that programs in an experimental pilot phase overwhelmingly reported that they had a customer retention and expansion program in place. A smaller number said they were planning to and we saw zero responses with no plans. This indicates that programs undergoing an account-based transformation may be doing so with the intention of maintaining customer revenue during COVID and economic downturn.
LEAD GENERATION CONTINUES TO FADE TO OBSCURITY
Interestingly, while “lead generation” is a top-three goal for ABM programs of every maturity level younger than “late,” it is far from a top three KPI for assessing the performance of an ABM program. Moreover, reliance on lead generation continues to diminish as a performance indicator, with the exception of “middle maturity” programs among whom 30% said it’s a KPI.
“Is lead generation a KPI for your ABM program?”
2020 TRENDS IN ABM PERFORMANCE INDICATORS
As we look towards how sales and marketing prove success with their ABM program, one thing is clear: the focus continues to tighten on core revenue metrics. Namely, demos/meetings booked,pipeline generated, and the reigning KPI champion: revenue generated. One notable stat is that, for late maturity ABM programs, increasing deal size (LTV/ACV) is a top three KPI, tied with meetings booked. This suggests that when teams get really good at an account-based programs, there is tight alignment between sales and marketing to the point where marketing is actively helping sellers grow their opportunities.
Core Revenue Metrics
On the flipside, teams are feeling increasingly confident in their abilities to measure the performance of their ABM program. On the whole, “increased sales velocity” was the most difficultmetric to analyze, but only at a rate of 30%. The number two response to “are there any KPIs you want to report on but can’t?”: None.
“Are there any KPIs you want to report on but can’t?”
THE MEASUREMENTS THAT MATTER MOST
Just like we saw opportunity and revenue generation become overwhelming success criteria for later stage ABM programs, we’re seeing the same trend occur in their level of confidence overall. Unlike the advent of inbound marketing, where marketing teams worked to generate at-bats for sales teams by simply standing up forms, focusing on SEO and SEM and other demand programs, ABM takes much more time, effort, and collaboration to be successful. While newer entrants might not feel the effects immediately, they should be heartened that if they stick with it, it will pay dividends.
“On a scale of 1-100, with 100 being “supremely confident”, how confident are you in your account-based program?”
What, specifically, is giving teams confidence in their ABM programs? Respondents universally ranked “new business generation” as their number one most effective aspect of their ABM program by a longshot. Coming in at a distant second was “lead generation”, which was tightly clustered with six other aspects. When asked how they knew their ABM program was working, respondents answered with “new business generation” at such an overwhelming amount that the other success indicators barely rate a mention.
Consistent with “new business generation” as the most successful measure of an ABM program, we’re seeing that reflected in the importance of ABM to teams’ overall revenue generation, with exactly 50% of respondents saying that their ABM program is “a major part of our revenue generation strategy” or “involved in every part of our revenue generation strategy.” As you might expect, the more mature an ABM program is, the more revenue it becomes responsible for.
In Gartner’s 2020 CMO Survey, they found that, on average, marketing budgets decreased by about 40%. When you’ve got fewer dollars to spend, no live events to attend, and a newly remote workforce– what happens? It would appear that ABM becomes suddenly more important to a majority of teams. That checks out, because with fewer dollars to bring future customers to you, it makes more sense to use your remaining budget to go after them. Across the board, over 63% of teams indicated that their account-based program either became more important or absolutely critical to their business goals.
How COVID Changed B2B Marketing
Consistent with Gartner’s findings on marketing budgets, COVID-19 impacted nearly half of all respondents’ marketing budgets negatively, with about a third staying unaltered. What’s fascinating, however, is how budget dedicated to account-based programs compares to overall marketing budgets. In earlier maturity programs, the amount of money going towards ABM decreased at the same rate as their overall budget, indicating that they were victims to overall marketing spend cuts.
While the vast majority of overall marketing budgets across the spectrum of ABM majority were either cut or remained the same, the same was not true for the amount dedicated to account-based programs. With the exception of Pilot-level maturities, every other cohort of responses saw their budget put towards account based programs grow—at nearly twice the rate as those whose ABM budgets were cut.
With events no longer an option, companies with an ABM program have been investing more, indicating that they are resilient and reliable revenue channels. Companies with ABM maturities beyond “Pilot” saw their overall budgets reduced by an average of 46%. For these same companies, ABM spend increased by an average of 30%, nearly three times the rate that their overall marketing budgets increased (average of 11%).
While the circumstances behind it are different, we’ve been through economic recessions many times in recent history. And if history is any indication, now is the time to invest more heavily in your brand. At its core, ABM is about unifying revenue teams around smart, targeted brand awareness plays. This surge shows that COVID has precipitated a rush towards efficient brand development that has and will continue to help companies through the tumult of this pandemic and economic turbulence.
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