Knowing how much to spend on Account-Based Marketing (ABM) can be hard to determine. And while a number is desirable, ultimately, the budget you set aside is going to depend on what components you need, whom you are targeting, what agency you are (or are not) using, how big your company is, and the value you place on an ABM program.
Despite this, a Forrester report did put a number to it. They found that the "average ABM budget was around $350,000 (excluding headcount costs). For pilot programs, the budget is understandably lower – averaging about $200,000 – while more mature programs that have proven value have a budget of about $600,000. Very large organizations with established programs can have budgets of up to millions of dollars." Obviously, this is a wide range and one that is expected to increase – that is because of all the various factors mentioned previously.
Breaking down the components of ABM is necessary when trying to determine what you should spend. Important components to consider are:
When you start considering these various components, the cost of subscriptions and staff quickly adds up. A primary contributor to cost is the staff. One company determined that the cost to staff a basic ABM team of eight people for a year would be around $450,000 – but that was in 2019. In today's competitive market, with inflation running rampant, it could easily be double that – without factoring in benefits and payroll taxes.
For many organizations, this is why they opt to hire an experienced ABM agency. An agency also has the ability to accelerate ROI growth because they are a well-oiled machine that can be ready in 3-4 weeks, whereas your newly formed team will likely need 3-6 months to ramp up their campaigns.
While hiring an agency is far more cost-effective in the long run, it is essential to remember that launching ABM campaigns are an investment. Your first month or so will likely be centered around onboarding and other discussions with the agency and not direct ABM campaigns. This ramp-up period is critical because it will set the tone for your campaigns and the partnership with the agency. If all runs smoothly in the first month, the agency should be well-prepared to develop, launch and manage your ABM program with very little oversight by your team.
The cost of licensing the different components of your tack stack will vary based on your size and what software solutions you are using and whether you use an all-in-one solution or several different ones. The agency you use, if you use one, should have the knowledge to help you determine the right tech solution or solutions for your program. However, these are the ranges you can generally expect for licensing:
For small and medium-sized organizations, the cost is going to land on the lower side of the range, while for large enterprises, it will be on the high side of the range. An agency with ABM tech partnerships may be able to provide discounts or solutions that offset some of the costs.
When running 1:Few and 1:1 campaigns, the costs will have an additional consideration – the value of the potential contract with the targeted clients. For instance, if you are targeting Google for a $10.5 million contract, then spending $300,000 just for that campaign may make sense, but if you are targeting a medium-sized business with a contract value of $1 million, then a $30,000 campaign spend would make much more sense.
This is why the Forrester number may be misleading. The amount you spend on your campaigns will depend highly on who you are targeting and your goals. 1:Many and lead generation campaigns will be much easier to put a specific price on when you speak with an agency – whereas moving into the 1:Few and 1:1 campaigns will cost more. This is where your strategy will shift from gaining engagement and brand recognition to specific insights from your ideal client persona (ICP).
While 1:1 and 1:Few may cost more, these campaigns have a higher rate of conversion and a better opportunity for high ROI because they are much more targeted. However, highly targeted means that a greater number of personalized assets are needed to distribute across channels. This means a greater investment in creative and orchestration requirements.
Again, ABM is an investment and is a fantastic way to garner high ROIs, but the foundations must be built first so you can target your ICPs effectively.
The pandemic changed the way we do business as well as the way customers interact with businesses. More and more of our interactions are primarily online. Therefore, the digital and content components of your ABM campaigns are critical.
Omnichannel means just that, many channels, but it is not enough to simply have an ad everywhere; your ad must provide value to the customer and answer questions they may not actually be reaching out to your sales team to ask. According to statistics, omnichannel campaigns are the way of the future:
In addition, statistics show us that buying committees of two people represent only 18% of purchases, while most have five or more people across multiple departments involved in the buying process. Because of this, your campaigns will have to target numerous people where they are looking for your solutions. By extending your ABM campaign across multiple channels, you'll be able to reach the accounts within your ICP with your ad or content tailored to their pain points, dramatically increasing the likelihood that they will follow the ad to your website and move further down the funnel.
The Sirius Decisions' 2019 ABM report states that 99% of companies that implement ABM campaigns experience higher engagement with an 80% win rate. Indeed, ABM has quickly become a strategy of choice for businesses because it is proven to deliver higher account engagement, improved win rates, larger average deal size, and strong ROI. ABM also supports prolonged growth, with 24% of companies implementing ABM seeing an average of 27% growth year-to-year over three years.
However, there is no one-size-fits-all ABM program. As we have discussed, determining if you are seeking brand recognition and engagement or insights is key in determining whether a 1:Many, 1:Few, or 1:1 campaign is best to start with. The key is to understand that buyer needs will change as they progress through the stages of the buyer's journey. You want to be ready with plenty of content to share with the buyer in order to answer their questions as they arise.
The goal of ABM is to do more with less – not create more work for your team. Remember that time is money. When you hire outside experts to get your ABM program off the ground, you experience greater ROI in the long run and much more efficient time-to-value.
Ready to implement an ABM program that brings value to your business? Contact our ABM experts to get started.