Thursday March 17, 2016

Inbound Marketing vs Account-Based Marketing: Which is Right for Your Business?

Inbound marketing is an approach that started getting attention in the mid 2000’s and has been increasingly lauded as a leading strategy for businesses to create demand for products and services with its market.

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Just as inbound marketing seems to be settling into a comfortable stage of respectable maturity, its reign as the current favorite marketing trend may be threatened by what many proponents consider a superior approach for B2B companies: account-based marketing (ABM). 

So which – if either – is right for your business? As someone in charge of developing strategies at a marketing agency, I’ve had the chance to get my hands dirty with both. Below are some pros and cons of each, along with some findings and takeaways based on my experiences so far – hopefully, you’ll find this useful as you weigh options for your own strategy.

The Differences Between Inbound Marketing and Account-Based Marketing (ABM)

If you know the differences, feel free to skip to the next section – but if you’re wondering what these two terms mean, read on.

There are many facets, approaches and varying best practices involved in each, but as an introduction, the two strategies can be defined as follows:

Inbound Marketing: Inbound marketing can be thought of as a reaction to traditional forms of marketing. Rather than getting your target audience’s attention by using disruptive tactics like paid advertising, direct mail or outbound sales calls, inbound marketing tactics are designed to bring visitors to you by earning their attention, primarily through valuable, interesting and useful content like articles, white papers, e-books, videos, infographics and so on. According to Hubspot: “By aligning the content you publish with your customer’s interests, you naturally attract inbound traffic that you can then convert, close, and delight over time.”

Account-Based Marketing (ABM): Also known as key account marketing, ABM is a strategy typically used by enterprise level companies that targets specific accounts or types of accounts as individual markets. Unlike inbound marketing, which casts a net for a high volume of inbound traffic and leads and lets sales sort out the good from the bad, ABM aligns marketing with sales to concentrate efforts on key accounts. While an ABM strategy may include some tactical overlap with inbound marketing, it also frequently uses more direct and targeted disruptive tactics.

Pros and Cons of Inbound Marketing

The strategic value of inbound marketing has been well-documented: as competition among brands has multiplied for the shrinking attention-span of an increasingly skeptical audience that has turned largely to online content and social networks for information, entertainment and commerce, the effectiveness of traditional outbound advertising tactics has plummeted. Inbound helps businesses correct this course by letting their audiences use their preferred means of finding information, such as search engines and social media, to arrive at interactive content they find entertaining or educational. As a result, inbound marketers hope, brands will develop awareness, trust and loyalty with these audiences as a result.

Pros of Inbound Marketing:

  • Addresses skepticism facing traditional advertising tactics
  • Customers find you via their preferred means such as search and social media
  • Content is helpful and/or entertaining
  • Communication is interactive
  • Customers develop trust and loyalty

While inbound marketing can drive a lot of traffic and generate volumes of new contacts, you aren’t able to filter exactly who finds and interacts with your content. Maybe your ideal customers will download your white paper, or maybe students, job applicants and competitors will instead. You can optimize your organic and paid search content for your target audience, but anyone can find and click with the right terms. (Note: if your potential customer base is broad – that’s not necessarily a bad thing. 

Furthermore, you’ll need to devote time and resources to generating proprietary new quality content, and that may take some time to be found by enough of your market to start generating ROI. Furthermore, with virtually all industries investing in some level of content marketing, the bar is constantly being raised for what qualifies as “quality” content. 

Cons of Inbound Marketing:

  • Can’t filter out who finds and engages with your content
  • Requires resources to consistently generate new quality content
  • May take some time for market to find content
  • Bar is constantly being raised for the quality of content

Pros and Cons of Account-Based Marketing

For B2B companies with a niche audience and/or doing enterprise selling, a more targeted approach than inbound is usually needed. By using an account-based marketing approach instead, businesses can tailor marketing messages to only those audiences that are ideal and optimize for improving the 1% of marketing that has the biggest impact. This is especially advantageous for companies with high revenue per sale or deal.

ABM can also be an easier sell to the C-suite because ABM and sales should inherently speak the same language and aim for the same goals, as both are geared toward landing target accounts -- rather than having marketing generating leads and handing them off to sales. As a result, reporting and analysis tends to be relatively simple and clear – if engagement and revenue with the target accounts are hitting those goals for growth, the strategy is working.

Pros of ABM:

  • More targeted approach for niche B2B companies
  • Optimize marketing for opportunities presenting the biggest impact
  • Tailor messaging to target
  • Sales and marketing are aligned
  • Reporting and analysis direction is clear 

While ABM has proven to be a powerful marketing tool for many companies, it is still relatively new and the related technologies used in ABM are still evolving. It should also be noted that companies using ABM are often using platforms such as Marketo to measure and automate multi-funnel campaigns and track company-specific IP addresses, so some budget for software will make this strategy more feasible. Finally, it takes time and resources to identify target accounts, learn about their decision makers and influencers, set up tracking and goals, plot out customer journeys for each segment and then build out campaigns and content for each account.

Cons of ABM:

  • New evolving technologies
  • Difficult without platform
  • Time and resources needed for campaign development 

Which is Right for You?

In my own experience, I’ve see inbound marketing generate impressive results and I’ve seen it disappoint.

Where it’s worked, there’s been enough of a qualified audience looking for the types of content we’ve been able to provide. In these instances, as more contacts were generated and more content and nurture workflows developed, we saw powerful momentum that helped improve the quality and quantity of top of funnel contacts, leads and sales meetings.

Where it hasn’t worked, the audience attracted through inbound efforts were simply too broad for the products offered by the client. In the case of this client, after starting with an inbound strategy, we moved to an ABM approach when we found that a strong majority of contacts generated were not qualified. The shift has already helped to clarify the goals, message and value that we want to take to market and when contacts are made, we know for the most part that we’re reaching the right targets.

What I’ve found is that the biggest determining factor comes down to the size and nature of the target audience. If your audience is vast and the revenue per engagement is relatively small, inbound marketing makes a lot of sense. If you offer a specific product or service for a niche audience and landing a couple white whales would make your year, ABM will likely generate better results. It’s also possible to pursue both strategies simultaneously, though that will require substantial resources to pursue, track and assess both effectively. 

Ready to launch your first inbound campain? Download our free checklist for a step-by-step process to get started!

Download Our Free Inbound Campaign Checklist

 

Written by Charlie Nadler | Tags: Strategy

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