How do you decide which accounts you should pursue right now, and which can rest for a couple of quarters? What’s the most efficient way to structure your ABM programs so you can maximize results without leaving money on the table?
Whether you run your ABM programs on a quarterly basis or you run dynamic programs that move accounts in and out of your programs daily, you’re more than likely already following some sort of tiering system. And if you’ve got a large TAM and ICP, that tiering system is critical to running efficient programs.
The process for building out account segments and tiers relies largely on the same attributes you use to define your TAM and ICP – firmographic, environmental, and behavioral attributes.
When building your ideal customer profile, you’re looking for all the attributes that your best customers have in common.
But when you’re segmenting account lists, you’re focusing on individual attributes (or groups of attributes) that suggest an account may respond better to particular messaging, products, or features. You can also form a segment based on behavioral signals that suggest a group of accounts has a higher propensity to engage right now. So, account segmenting focuses a bit more on timeliness and relevance, while your ICP is broader in nature – making it more difficult to personalize and scale.
The example below shows how an ICP can include multiple geographic territories, company sizes, and industries, whereas the sample account segment has been refined to target just a single territory, company size, and industry.
Ideal Customer Profile
- Geography: North America, Europe, & APAC
- Size: SMB, Mid-Market, & Enterprise
- Industry: Software, Financial Services, and Healthcare
- Funding: Yes
- ERP: Yes
- Geography: US
- Size: SMB
- Industry: Software
- Funding: Yes
What Is An Account Tier?
Account tiering refers to using technology, data points, and good old-fashioned research to prioritize your dream accounts. Most B2B companies find that a 3-tiered system works best. In this system:
- Tier 1 accounts are perfect ICP fits, similar to your highest value customers. Tier 1 also includes logos with strategic value.
- Tier 2 accounts are strong ICP fits but have a lower lifetime value.
- Tier 3 accounts fit most, but not all, ICP criteria. They’re worth pursuing but typically not worth investing significant resources to win their business.
Not all accounts are created equal. You should allocate more resources to accounts that have the potential to drive the most revenue and/or strategic value for your business.
Unlike segmentation, tiering is not as concerned with slimming down the list of firmographic attributes as it is with identifying accounts based on value.
There are many ways to do this:
- Some companies tier their current customers based on revenue received.
- Others may tier based on the Fortune 500 companies that are a good fit for their solution.
- Others might tier based on a combination of firmographics and behavioral attributes that suggest a company is most likely to be a more valuable customer and behavioral signals suggest a group of accounts have a higher propensity to engage right now.
There’s no perfect recipe for segmentation – it depends on where you feel you’ll see the best results. But keep reading for some tips on how to get started!
How To Segment Your First Account List
According to where you are on your account based sales mission, you probably want to target anywhere from 100 – 1,000 accounts. The number of accounts depends on how many salespeople will be involved, your opportunity and revenue goals, and standard conversion rates.
Your goal should be to achieve greater conversion rates, but you can start with your current baseline.
In general, the earlier you are in your account-based journey, the fewer sales reps you want to have involved in the program. If you’re running a pilot program, it’s critical to lead with a small group of your best sales reps. A small group allows you to stay close to what is happening and enables optimal feedback and communication.
As you expand past your pilot you should bring on a larger test group to see how the program scales with a larger number of salespeople and target accounts. Once you’ve tweaked the program to perform well at scale you can expand across an even larger team. This is the “crawl, walk, run” approach to ABM many of our successful customers leverage when scaling their ABM programs.
Choosing Your Accounts
If you’re conducting a pilot ABM program, you may not have ABM software with advanced targeting data and tools, and that’s okay.
For now, you can use the firmographic data already at your disposal to trim your list down based on the accounts that you believe have the highest chance of success and will respond to similar messaging.
Lists You Will Need:
(Note: these instructions are based on the assumption that you’ve already built out your TAM and ICP. If you haven’t, you can learn how to here.)
Your ICP should likely include a large list of firmographic attributes. If you can cross-reference those data points with the attributes of the accounts that progressed the quickest through your sales cycle, you can further narrow your list to a “sweet spot” of accounts that share qualities with your best, highest-velocity customers.
You will want to be sure that the list you come up with fits within your ICP. Otherwise, you run the risk of targeting a group of accounts that are likely to close quickly but churn early.
As a rule of thumb, you could start by filtering out all the accounts that don’t fit your ICP.
The accounts with the fastest sales cycle were the SMB software companies. This is a good start for where to point your laser, but you probably need to further refine the list. Let’s say you have specific messaging and content for cybersecurity software companies. You could then pick the top 100 SMB cybersecurity software companies in your TAM to enroll in your ABM pilot program.
Getting Buy-In from Sales
Marketing-sales alignment is crucial when building and segmenting your account lists. While you may have done the research to build what you think is a foolproof list, your sales team might have a different perspective based on their experience in the trenches working on these accounts.
So, once you’ve got your list ready, set up a meeting with your sales team (or at the very least, the sales leadership team) to:
- Explain the logic behind the list
- How you created the list
- Ask for feedback
Turn Your Target Accounts into Customers
As you run your first few pilot programs, you’ll want to start looking to scale your program from two perspectives: one that looks at how many accounts you want to target, and one that looks at the types of account data you are (or will be) using.
You’ll also want to start looking into leveraging data enrichment services/platforms to gain more insight into your target accounts.
But for now, you’ve identified and tiered your target accounts. You’ve gotten the A-Okay from your sales team. Now it’s time to engage them with target account marketing!
You can learn more about segmenting and tiering your accounts (along with marketing to them) by downloading our Complete Guide to Account Targeting.