In the never-ending quest to find your target customers, the number of approaches you could take is infinite. Where some businesses focus their efforts on reaching the widest range of potential customers as possible, others take a more tactical approach.
Account-Based Selling (ABS) goes a step further, honing in on ideal customers with super accuracy and developing relationships that create reliable revenue streams well into the future. This is by no means a new method, but it is growing in popularity.
Is this sales method right for your company?
What Are Account-Based Sales?
These are sales generated by coordinated multi-channel engagement with high-value accounts. In this strategy, marketing and sales teams work together to pursue ideal customers. The approach is highly personalized, and an ABS team will be assigned to each account. These teams may consist of Account Executives, Customer Success Managers, Sales Development Representatives, etc.
This is in contrast to other sales methods where individual sales reps are assigned to an account each. More value is placed on individual high-quality accounts as opposed to a high number of lower-quality accounts.
Implementing an ABS strategy isn’t for everybody, and adopting one may require a total shift in your sales process and business model.
Consider the following questions in deciding if it makes sense for your business.
Who are your customers?
Whether it makes sense for your company largely depends on who your customers are. Typically, ABS is best for B2B businesses that provide highly-valuable and complex solutions, where a team-selling approach is appropriate, and where leaders can assign multiple sales-related roles.
How many stakeholders are involved in the purchase decisions of your accounts is another important consideration. When multiple stakeholders play a part in the deals you’re making, an ABS approach can be beneficial. In fact, assigning different members of your management and sales teams to their counterparts in the target company may make perfect sense. This takes time and energy on your part, and involves cooperation and buy-in from your potential client.
How big are your deals?
The average size of the deals you make with your customers is highly important. This is because an ABS strategy requires that you dedicate many more resources to each account. You won’t want to waste valuable resources on a single account if the deal size isn’t substantial.
How long is your sales cycle?
In addition to deal size, the length of your sales cycle is important to take into account. Longer, more complex, multi-stage sales cycles lend themselves better to ABS more than those that are shorter.
What are you selling?
The type of product or service you are selling is also relevant when considering whether an ABS approach is right for your business. Subscription-based products are often a good fit for this model, as are solutions comprised of multiple components or combinations of products and services.
Where to Start?
Build a Customer Profile
Account-based sales development is all about the customer. Since you’ll be devoting so much time and energy to customers with this method, a deep understanding of your clients is imperative. You’ll also have to be highly selective with the accounts you take on.
Identifying your Ideal Customer Profile (ICP) is a crucial part of the process. It will provide the framework for defining the clients and prospects who are most valuable and most likely to buy.
Determining your ICP is a detailed process. You’ll need to identify key characteristics of your ideal client, such as:
- Number of employees (for B2B sales)
- Market share
- Historic and predicted growth
- Buying and decision-making processes
The more information, the better. The above is just an example of some of the data you’ll need when creating an effective ICP.
Where the ICP helps you identify which accounts you should target, buyer personas help you target the important people within those accounts.
Winning accounts is all about people, and so is nurturing lasting relationships. On average, B2B sales teams need to convince more than five stakeholders to make a purchase decision. Connecting with these individuals is a must, and using buyer personas to identify them can help get you there. You’ll probably want a different approach to appeal to a sales manager than to a CMO, for example.
Once you’ve identified the key people for an account, make note of their position, the communication methods they prefer, and what information sources they use. You can use this data to tailor your efforts for each person, targeting their specific roles and preferences. You can even determine who within your organization may be best suited to meet with the person you are targeting, and make connecting the two a top priority.
Using Metrics to Assess Performance
Once you have implemented ABS, to know whether it is working for your company, there are some valuable metrics you should monitor.
Customer Acquisition Cost (CAC)
This is the average cost of converting one account. This cost will be significantly greater when implementing ABS, but the extra time and resources put into acquiring customers should pay off in the form of higher profits, longer contracts and opportunities for expansion.
Average Contract Value (ACV) or Annual Contract Value
This is the average amount of sales generated by a customer contract over a given period of time. In some companies, this is looked at on an annual basis, while in others, if your typical contract is for three years or even five years, it will be an average across the length of the contract
Lifetime Value (LTV)
This metric looks at the value generated by each customer over time, and can be in terms of revenue, profit or the rate of return on the upfront monies spent to acquire and launch the relationship.
For example, in order to see whether the increase in CAC is worth the investment, compare the ratio of LTV to CAC. Ideally, you’ll see that the extra energy you’re putting into customers is magnifying the value of your customer relationships.
After you’ve decided that ABS is right for your company, created an Ideal Customer Profile and Buyer Personas, it’s time to actually start the process. And this can be the trickiest part.
If you’re converting to ABS from a high-volume approach, it’s risky to make the change all at once. Instead, consider making a gradual transition. Take it slow and wait until you see results before converting all of your business sales to ABS.
The ABS approach is an opportunity to make stronger connections with your clients as well as grow your business. The personal approach allows you to facilitate the successes of your customers by providing the specific solutions they need.
Making quality sales is about exchanging value; it should be a win-win scenario for both sides, leading to a fruitful lasting relationship.
The beauty of account-based sales is the potential it provides for taking those relationships to the next level. If you’re in the position to provide more for your clients and thus get more in return, account-based sales could be the right move.
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