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Beyond The Hype: Why ABM Is Not Working For Most Companies

Introduction

Account Based Marketing (ABM) has been touted as a game-changer for B2B marketing, promising tremendous results in target prospect engagement, pipeline generation, and bookings. However, recent CMO research from Rocket Scale reveals a starkly different reality: many companies are falling short of their expected results, even after investing heavily in ABM. So, what’s going wrong? In this post, we’ll review the research with CMOs conducted in April 2024 to uncover the challenges that are causing ABM to stumble and uncover strategies to unlock its true potential.

 

The Promise of ABM

CMOs are sold on the dream of ABM, betting big on it as a key driver for their 2024 goals. An impressive 88% of CMOs who participated in the research rank ABM as a Top 5 priority this year, and the other 12% rank ABM as a Top 10 priority.

 

When you prioritize the programs that will help you achieve your Marketing & Sales goals in 2024, where does ABM rank compared to other initiatives?

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All CMO participants hope it will deliver precision-targeted sales and marketing plays on key accounts that will generate increased pipeline and accelerated sales. And that’s not just lip service; these CMOs have backed up their belief with significant investments. 35% of CMOs from companies of all sizes said they were investing between $100k-$200k excluding personnel expenses this year on ABM, with the average budget dedicated to ABM at $122k. And some companies are pouring in over $400k a year. Plus, 23% of companies have dedicated separate ABM teams focused on making it happen.

 

How much budget have you allocated for ABM solutions this year? Do not include people or campaign expenses.

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High Hopes for ABM

Companies are betting big on ABM in 2024 and are counting on it coming through for them in terms of higher engagement, elevated conversion rates, and ultimately increased pipeline and revenue. But here's the kicker—these high hopes have not been realized so far.

 

The Reality Check – ABM Is Not Meeting Expectations

Despite all the enthusiasm and investment in ABM, only 12% of companies reported significant success with their ABM programs. This is a shocking statistic. This means that 88% of companies running ABM programs can not yet show successful results for one of their highest-priority programs for this year. And a program they are counting on to help them achieve this year’s sales and marketing goals.

Most companies are still in the “figuring it out” phase of ABM. Specifically:

  • 41% have started running campaigns but haven’t seen results yet.
  • 12% are running campaigns but with inconclusive outcomes.
  • 18% are still in the deployment process.
  • 12% are still planning and have not yet started implementation.

 

What is the current status of your ABM Program?

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53% of companies are running ABM campaigns with no or inconclusive results. Compare this with just 12% that are running ABM campaigns and getting great results. That is not a good ratio of successful ABM deployments, with just 1 in 4.5 or 22% of CMOs running ABM campaigns claiming success.

An additional 30% of CMOs are still planning or in the deployment process. While ABM is a top priority with lots of resources thrown at it, it’s only hitting the mark for a small fraction of adopters.

 

ABM is Very Tech Industry Focused

The majority of ABM adopters are highly concentrated in the technology industry. 74% of companies running, deploying, or planning to use ABM solutions are in the tech industry. To be fair, technology companies have been early adopters of martech solutions for years, but ABM is not a new solution. So it is surprising to see such a high concentration of ABM buyers in the technology industry. This could indicate the immaturity of ABM solutions.


What industry is your company in?

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Are ABM Programs Targetting the Wrong Market?

One potential explanation for these poor results might be that our CMO Research participants were targeting smaller companies from the SMB, where ABM data and targeting capabilities have typically not been as strong as the Mid-Market and Enterprise. However, we found that most CMOs were targeting multiple markets with their ABM programs and we found no correlation to achieving better results when targeting larger companies from this research. Results were consistently bad across the board.

 

What Size Companies Do You Typically Sell to?

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What’s going on here? Why are companies struggling with ABM?

It would be reasonable to assume that all companies are going through the same growing pains with ABM and that after some initial challenges, the path to success would become clear. However, follow-up conversations with those struggling with ABM showed that they face a wide variety of challenges in implementing ABM, with no quick fix in sight. The challenges were so disparate from company to company, it was almost like each company faced a problem unique to them. Here is where CMOs are struggling to get ABM to fulfill its promise:

 

Getting Started

Many CMOs struggle with the initial setup of the technology and team, which could hamper initial results. CMOs need a solid setup validation for both their tech stack and their teams to make sure they’ve got it right from the get-go. And they also need some basic initial plays that can generate early positive results. Without the right foundation in place and a clear plan for initial campaigns, the program can start on an unstable footing and stumble out of the gate, losing momentum and support.

 

Technology-First Approach

One major pitfall across many companies is the over-reliance on technology to solve the problem. Many companies jump in, thinking the latest ABM software will solve all their problems without a clear strategy on how to use it effectively. It’s like buying an airplane when you have no idea how to fly. ABM is a new GTM process involving people from different departments, data, and technology. All must work in coordination for ABM to be successful. Most CMOs seem to have underestimated how challenging this would be.

 

Unclear Definitions and Goals

There is a lot of confusion surrounding what ABM actually is and how to do it right. The market is flooded with vendors all claiming to have the ultimate ABM solution, which only muddies the waters for those trying to figure it out. Sales and marketing teams are often left scratching their heads, unsure of what ABM means to them, how to do it, or what success even looks like.

 

Team Coordination Challenges

ABM is not a marketing program - it’s about marketing, SDRs, and sales moving together in a highly coordinated motion. If any part of the team is out of sync or not bought in, the whole thing will come to a screeching halt. This cross-departmental coordination can be a real challenge, especially when different team leaders from different departments have different goals.

 

Team Organization and Training

Team organization and training are crucial. Each team needs to figure out how to best organize their ABM effort within their respective teams. Then they need to figure out what skills are required in their marketing, SDR, and sales teams and how to train them effectively. One critical skill is how to work well cross-departmentally with other teams. This may be a new skill for many team members, hampering initial results.

 

Prioritization Process

Each company needs to develop a process for scoring, prioritizing, and acting on signals within the target market that will be key to the success of any ABM program. This is a new motion for most sales and marketing teams and needs to be clearly defined and communicated to all involved.

 

Measurement Issues

Many companies are also struggling with measurement, metrics, and visualization for operators and executives. They’re not sure what success looks like, or what to track and measure. Or how to attribute results directly to their ABM programs as opposed to their standard sales and marketing efforts. They want to show positive results to the executive team to justify the investment but are not sure what to show, or how best to show it.

 


ABM - Are We There Yet?

As a CMO, I started hearing about ABM at least 10 years ago and first started implementing it 8 years ago. However given Rocket Scale’s research in company deployments and campaigns, it appears that we are still very early in the ABM adoption curve. Most companies are still trying to figure it out with few showing positive results. Also, the concentration of ABM adoption in technology companies shows that ABM is a long way from being a mainstream solution for all industries.

 

Does This Mean I Should Ditch ABM?

Don’t expect quick success. Prepare for the long haul. ABM is a complex process that involves multiple departments acting in coordination, enabled by technology and relying on a data-driven approach. This is likely a new motion for all involved and requires a lot of coordination, training, and new skill development. This is not a turn-key solution.

In the next post: what to do to make ABM successful. Without failing first.

 

The Research

A survey of CMOs followed up by in-depth interviews was conducted in April 2024. The survey was offered to a Slack community of CMOs representing a highly diverse mix of companies of all sizes, industries, and geographies. 23 CMOs voluntarily responded. While the sample size was small, these results provide valuable insights into the current experience with ABM. The CMOs who responded had to have some direct experience running ABM programs to quality, and were mostly from companies with under 500 employees. No difference in results was seen due to company size.

 

How Many Employees Does Your Company Have?

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Al Campa is Founder and CEO of Rocket Scale, which advises companies on how to accelerate revenue with powerful go-to-market strategies. He can be reached via www.rocketscale.net.