The growing adoption of account-based strategies adds another element as we define how sales and marketing align. In my previous post about the alignment gap, I discussed the foundational importance of sales and marketing collaborating on a common definition of lead qualification. But what happens when revenue teams focus on accounts as well as leads?
Account-based strategy, not ABM
Account-focused organizations are more than just ones with a key account program or sellers handling named accounts. I’m referring to an account-based go-to-market commonly called by an incorrect name: ABM. An account-based strategy is bigger than just marketing and requires partnership with sales. As such, it is another path to how sales and marketing align.
According to Chris Moody, my Gartner colleague and co-author of this post, an account-based strategy is the coordination of valuable, relevant meetings and experiences delivered across all functions that impact the buyer to drive engagement, conversion and retention at a targeted set of accounts. Whew, that’s a long definition. Here’s a shorter one. Cross-functional teams prioritize resources on the accounts most likely to become customers.
An account-based strategy begins with sales and marketing creating an ideal customer profile to prioritize certain accounts. This account-based principle guides sales and marketing efforts throughout the funnel and is partly responsible for the improved conversion rate with account-based strategy over demand generation.
Account-based strategy + demand gen = alignment
An account-based strategy does not replace demand generation, but is an additional way to approach a market. Most organizations that adopt account-based strategies still leverage the tactics of demand generation to fill their pipeline. And this is true for alignment as well. These are two parts of the same process of jointly determining the audience for a vendor’s solution.
Organizations can no longer approach demand generation with a large quantity of leads or outright purchasing massive lists of contacts. Demand generation should start with sales and marketing coming together to build a lead qualification definition to better target lead generation efforts. This improves the quality of leads generated by marketing and passed to sales development and sales.
The initial steps in the two go-to-markets pictured below are lead qualification definition and ideal customer profile. Both sales and marketing should be at the table to complete the process. An organization with both demand gen and account-based strategy teams should get a bigger table, because those perspectives are required in a truly aligned approach.
The figure above is based on the double funnel measurement construct which aligns demand generation stages with account-based strategy stages. The double funnel presents conversion rates of each stage side by side. The paths remain separate and distinct until they reach sales development reps, who qualify both leads and accounts. This is also a way to show how both go-to-markets support sales and marketing alignment stage by stage.
Sales and marketing align stage by stage
The demand gen stages start with sales and marketing coming together to define lead qualification. Leads and marketing-qualified leads already meet the attributes that sales expects when they are handed-off.
- Lead Qualification Definition: The agreed-upon qualification attributes created jointly by sales and marketing including attributes such as demographic and firmographic data, behavior and readiness to buy.
- Leads: Prospects whose information meets data quality checks and have shown interest through behavior or other response to targeted campaigns.
- Marketing Qualified Leads: Prospects who meet firmographic requirements from qualification definition and established behavioral thresholds.
The account-based strategy stages start with sales and marketing agreeing on an ideal customer profile, which determines target accounts. When those accounts engage with the vendor, sellers have already agreed that this account is more likely to become a customer.
- Ideal Customer Profile: A collaborative process between sales and marketing that uses data to determine what the best accounts look like and creates an agreed-upon, buyer-qualifying definition. An ICP is an act of prioritization — not elimination — to create a shared understanding of deals more likely to win, bigger deal sizes and shorter sales cycles.
- Target Accounts: Accounts that are similar to an organization’s best-fit, highest-value customers, and may be prospects or customers.
- Engaged Accounts: Accounts that have engaged with an organization, including marketing, sales development, sales, and customer success. Engagement for a customer incorporates onboarding, rollout, and adoption activities.
Aligning sales and marketing brings together teams as well as process. Defining lead qualification and determining the best fit, highest-value accounts will improve pipeline, but it will also get these two revenue functions agreeing on who they should both pursue.