Today, the horizon of B2B selling looks different than it did even just a few years ago. The world has undergone several drastic revolutions in only a few years. Technological innovations, digitalization and workstyle evolutions that were being signaled years ago have today come to fruition. We are a more connected, virtual, and tech savvy business world than ever before. However, one thing remains consistent – when it comes to complex sales, buyers prefer a human touch. As sellers head into a future that feels uncertain, they can at least rest in this certainty – the human seller is as important as ever in complex, B2B sales. And because the human touch is so important, so is account-based selling.
What is Account-Based Selling?
If B2B sales is your domain, you may have already heard about account-based selling (ABS). Not a brand-new concept, account-based sales is a proven B2B sales strategy that is especially effective in large, complex B2B sales motions. And while it’s particularly important to leverage ABS in targeting key accounts, ABS can also impact smaller accounts.
By treating a single account like a market of one and leveraging the entire revenue team and all its resources towards a common goal, sellers can outpace and out innovate their competitors, delivering personalized sales packages, unparalleled insight into the account they are targeting (it’s political structure, decision makers and so on) to establish themselves as trusted advisors to their customers.
Although account-based selling has been around for years, its relevancy continues to grow as buying motions become more complex, and “face-to-face” interactions between buyers and sellers becomes even more critical thanks to video conferencing.
Finally, the sheer number of buyers involved in a large B2B purchasing decision is a significant driver for the increased importance account-based selling can have. Large B2B sales deals are not done one-on-one. At the buyer’s end, they are in fact done by a committee, or buying groups. How many buyers exactly are involved in complex B2B sales? You might be surprised to know that these buying groups typically contain as many as 10 individuals – far more buyers than one seller alone can handle.
In order to tackle the sheer complexity and challenge of winning over a buying group, the seller must also have a team behind them. The seller needs a revenue team. This is where account-based selling really gets interesting.
Account-Based Sales Takes a Revenue Team
One of the top challenges organizations face in transitioning to an account-based sales model is the change in mindset necessary to succeed at account-based selling. One of these mindset shifts is the need for a fully integrated team approach to winning new business. In an account-based selling approach, the differentiation between teams like customer success, sales and marketing is less distinct. In fact, each separate category is part of one greater team – the revenue team.
Account Based Selling – Terms to Know
To begin to understand how this looks in practice, it can be helpful to understand a few different account-based selling terms and acronyms.
- Account-based selling (ABS): covered in this article in depth.
- Account-based marketing (ABM): it takes a lot more than a hero rep to win over a buying group. One function that plays a fundamental role in ensuring sales can win the deals that matter is marketing. Marketing can help produce complex, tailored marketing plans that use precision targeting to make sure their campaigns and content are targeting key accounts.
- Ideal Customer Profile (ICP): The ideal customer profile is one of the core pillars of a successful account-based selling program. In ABS, the ICP is highly specific. It includes a carefully, strategically selected list of target accounts, and the specific details of what makes for an ideal customer. The ideal customer profile is not just any customer profile – it is a profile of the single most important type of customer for your business.
Account-Based Selling Criteria – Is It Right for You?
Account-based selling is not a small investment. It takes company-wide buy-in from the leadership level all the way down to the frontline sales managers and sales reps working the deals to make it work like clockwork. Many leaders, therefore, will want to know whether or not account-based selling is the best sales approach for them.
While account-based selling can be a tremendous strategy for many B2B companies, there are a few scenarios in which it works especially well. Here are a few signs account-based selling is the right strategy for your business.
You Have Large Customers:
ABS is ideal for enterprise-level B2B sales, meaning selling to large customers. As mentioned above, these types of customers tend to have the largest number of stakeholders involved in a buying decision, so a multi-pronged approach where an entire team supports a seller is important.
You Have Small-to-Medium Sized Customers:
Contrary to popular opinion, account-based selling can be just as effective for smaller businesses as it can be for large businesses. In fact, it is often within these accounts, just below the key account or enterprise account status, that most of the untapped potential lies. Business can take advantage of this untapped potential, or whitespace, in order to turn it into new, recurring revenue.
One strategy many ABS practitioners deploy is to take the services, plans and packaging that they’ve seen work for larger customers and use it as an offering for smaller customers. Not only does this amplify a revenue team’s efforts, it helps uncover potential areas of growth within these less developed accounts.
You Have an Ideal Customer Profile
In order to be the most effective at ABS, you need to have a strong idea of who your ideal customer is. If you don’t have this yet, it is impossible to tackle ABS effectively. If, however, you have a strong, precise ideal customer profile in place, and, even better, that ICP has been agreed upon and approved throughout your organization, then jumping into ABS will be an easier challenge for your team.
Account-Based Selling Benefits
Of course, the reason organizations choose to leverage account-based selling is because it helps grow revenue. By putting increased focus on your most strategic accounts, uncovering whitespace where it exists and developing long lasting trusted advisor relationships, you can keep maximum wallet share per account.
Companies that leverage account-based strategies for their revenue team earn more revenue than those that do not. In fact, 89% of respondents to a recent survey found that account-based strategies deliver a higher return on investment (ROI).
Improved Win Rates
With a revenue team behind them, sellers can provide closer, more personalized attention to their customers and win more deals. They’re able to produce an entire, strategic insight into the account and all the complexities within the organization – not just the needs and problems of one stakeholder.
Increased Average Deal Size
While it can be tempting to spend valuable resources on grabbing the low hanging fruit, often the low hanging fruit isn’t the best hanging fruit. Account-based selling seeks to target the best hanging fruit, making sure that you are only landing the best of the best deals from your targeted account list. This ultimately has a large impact on your business, including increasing the average deal size.
Relationships are the key to effective an account-based sales strategy. It’s not just about winning that shiny new deal. In fact, it’s all about building a relationship, and seeking to understand the people and problems involved in an account. By doing this, you will quickly become the trusted advisor to your customers, and be the first person they call for input or advice.
The Account Plan – Putting Strategic Account-Based Selling Into Action
Account-based selling isn’t complete without implementing an account planning process into your day-to-day sales, marketing, and customer service life.
To begin, you’ll want to know a little bit more about what exactly an account plan is. In brief, account planning is the process of mapping out key aspects of a potential customer or key account.
Any given account plan can include valuable information about the prospect or customer, including decision makers, competition, internal influence, unique challenges, the complex political structures hiding within the organization, the potential whitespace within accounts and beyond.
In addition to identifying key challenges, account planning helps establish sales leaders as trusted advisors to their customers. It does this by enabling the entire revenue team to collaborate on a winning strategy together. This strategy is aimed not only at “closing” a deal and moving on to the next one, but at strengthening the relationship with the customer. Achieving this “trusted advisor” status opens the door to future, recurring revenue (that helpful whitespace we talked about earlier).
The Mistake Many Sellers Make
The current approach many sellers take isn’t strategic enough to conquer the competitive B2B buying landscape. Current buying groups and decision makers have become all too well accustomed to these sales strategies that are often lackluster at best.
Often, a seller will take the information they can find at hand and get it into the shape of a proposal as quickly as they can. Once done, they will shoot that proposal over and never stop to consider for a moment what the key pain points of the buyer are. These “lone wolf” sellers are thinking transactionally, not strategically, and not from the perspective of the relationship.
While moving too quickly without analyzing the unique pain points of a given account or buyer can be damaging, this is even worse when there are multiple buyers involved. The odds of surface-level account information being enough to sway an entire buying committee are slim if not impossible. Sellers need deep, deep information and understanding about the inner-workings of an account and every buyer within that account.
Account Planning to Tackle Buying Groups
Instead, an account-based selling approach aims to arm the seller with every possible thing they need in order to build a meaningful relationship with the buyers. They take a moment to stop and think before firing that proposal over.
They ask questions.
Questions like “Who is driving this project? What is the purpose of the project? What pressures are you facing not just as an individual but as a company? Are there other initiatives that you have going on within the organization that I should be aware of?”
If so, the seller seeks to understand the obstacles not only to the project at hand but to the additional initiatives within the organization. Through doing this, they can build a holistic view of the opportunity at hand.
This is where account planning comes in. Through building an effective account plan, the salesperson can uncover those additional opportunities that increase the size of the deal while at the same time flanking against competition.
Review the Account Plan with Sales and Marketing
Finally, being able to see marketing as part of the greater revenue team, not disjointed silos, is imperative for the success of your account-based selling strategy. And it starts at the account plan. By reviewing the account plan together as a team, marketing can see and share how they can create content and campaigns to help the seller achieve ultimate success as a trusted advisor to their customer.
Relationships Matter in Account-Based Selling
When executed effectively, the account plan will help your sellers build better relationships with their customers.
In many cases, account planning will not only help you out maneuver the competition, doing so early on will help your sellers get off on the right foot and become trusted advisors to their customers. That means that when the buyer is looking for a solution, the seller who invested in account planning will be the one to take that call.
Account-Based Selling – Metrics that Matter
As when adopting any new program, metrics are necessary for showing impact. After a year of investing heavily in account-based sales, you are going to want to pay attention to a few metrics to show the value it has delivered to your entire organization. Below are a few metrics you’ll need to track and monitor.
Customer Acquisition Costs (CAC): Larger customer acquisition costs can result from ABS. As more resources are pooled to go after better accounts, so will the costs of acquiring those costs.
Annual Contract Value (ACV) and Lifetime Value (LTV): ACV is the value of a customer’s contract when averaged for every year of the contract while Lifetime Value is an estimate of the average revenue that a customer will generate throughout their lifespan as a customer
Benchmarking these metrics and monitoring how they change over time is necessary to prove the effectiveness of ABS for your organization. Pay attention closely to the ratio of LTV:CAC. LTV should increase without CAC increasing.
Sales Velocity is an Important Metric to Track
Lastly, pay attention to the length of your sales cycle. The velocity is the speed at which your deals move from opportunity to close. While tackling the best accounts will take time, you still may want to calculate sales velocity to ensure you are on the right track. If it is taking longer to close a deal than to build Rome, you could have a problem that needs tweaking. To calculate your sales velocity, use this formula: number of opportunities X Deal Value X Win Rate divided by the length of the sales cycle.
When used correctly, this formula can help organizations forecast revenue for a specific period of time and bolster their sales efforts.
Account Selling – Final Thoughts
Account-based selling can have a revolutionary impact on the ROI of your business efforts. But making the change is anything but easy. Having a proven strategy, methodology and the technology to drive best practices is necessary to help your business thrive as it undergoes this vital pivot towards more revenue, better relationships, and uncovered whitespace.