When you visualize your Total Addressable Market (TAM) in an Account Based Strategy, you may be getting the wrong picture.
In theory, Account Based Marketing (ABM) is a narrowing of the funnel: in exchange for concentrating marketing resources on a limited number of accounts, you trade a higher Cost per Lead (CPL) for the promise of better conversion rates, lower churn, and higher Average Customer Value.
However, in practice, ABM does not mean you have to limit your reach at the top of the funnel. Account based tactics can be used to compliment just about any approach to demand generation.
To get the whole picture, it can be helpful to take a step back and visualize your market.
Target Account List
An account based strategy starts with building a Target Account List.
Your Target Account List should roughly be a function of how many accounts a sales reps can work at a given time. Even if sales reps are not assigned specific accounts, this is a good approximation of a manageable Target Account List.
When you build your Target Account List, ask yourself,
- Which accounts have long-term success?
- Which use cases coincide with your company’s strengths?
- Which customers drive the most revenue?
- Which customers are likely to have success vs. churn?
- Which accounts have the most growth potential?
- Which accounts have the most potential for advocacy or referrals?
The answers to these questions are quantifiable with CRM and marketing automation data. While building a Target Account List is relatively straightforward, it can be time-consuming. For many companies, it takes around 6 months to build and finalize a target account list.
Using a platform such as LeadGenius is one of the ways business can speed this process along. LeadGenius helps B2B companies build Target Account Lists in days, not months.
Your Ideal Customer Profile
Some Account Based Marketing practitioners mistakenly conflate a Target Account List with an Ideal Customer Profile (ICP).
Your ICP is a data-informed segment of your Total Addressable Market (TAM). It should be much broader than your target account list but narrower than your TAM.
A good ICP contains data points that will help you segment for targeting, messaging, and reporting. For example, industry, company size, geographic region, etc.
It’s also important to remember that your Ideal Customer Profile will change over time. Most companies build a product or feature, or structure marketing and sales efforts, with a particular customer in mind; but, of course, there are always surprises when a product is released into the wild.
Your ICP can and should be adjusted as your marketing and sales teams learn more about what’s working for your target accounts. At a minimum you should refresh or add to your ICP(s) quarterly to test hypotheses about your audience, identify trends, and expand into new market segments.
Switching from funnel based demand generation to an Account Based Strategy can be daunting. The good news is that a switch is not necessary.
Marketers interested in leveraging account based tactics do not have to abandon a funnel-based strategy if its working. Getting started with an account based strategy does not mean you have to limit your lead generation, your outbound email, your marketing automation efforts, or anything else that delivers results.
Different lists and segments of your Total Addressable Market can be used to support different functions within your marketing and sales strategy. Just make sure you’re getting the whole picture.