082. Modern ABM & Demand Gen: How ABM Strategies Complement Demand Generation

Hello, welcome back to another episode of Boundify's Demand Gen Studio. Um, today we are talking about account-based marketing for B2B and the relationship between ABM and demand gen. People used to frame these as competing strategies, but now with a more modern approach to ABM, teams are starting to realize that they actually work best together. So joining me today, as always, is Emilio Garcia to break down what modern ABM actually looks like, where demand gen fits into the equation, and why teams are blending these motions together. So how are you this morning, Emilio Garcia?

I'm doing great, Miranda. Just geeking out on the fact that you can use your phone as a camera. So pretty impressed with how technology is moving forward. So yeah, let's dive in.

Awesome. So with a more modern approach to account-based marketing, which we'll get into throughout this whole episode of kind of what that looks like. ABN and demand gen really shouldn't operate separately anymore, and the best B2B teams are using demand gen to create awareness and capture intent, and then using ABN to focus their efforts on the accounts that are most likely to convert, matter the most, you know, that they're trying to go after. So to get us started, Why do you think there's been a shift away from treating ABM and demand gen as separate strategies? And I kind of just walk us through what those two look like for B2B.

Yeah, I think that distinction is a fantastic one because I can even roll back to the, the real distinction between marketing and sales. Which is a funny one because I think I mentioned these other episodes. If you go to financial reports of public companies, I'm not saying that every single one of them, but I'm almost sure that most of them and most business, you know, if not schools, at least framing of businesses consider those two functions one thing, right? We even do it ourselves, right? We, our, our function, we follow a little bit of the EOS model. We call it, we call it growth and growth has marketing and sales together. They're, they're just one function. And so people will always ask, well, what is truly the difference between marketing and sales? Beyond the fact that in B2B sales truly is the moment when someone expressed commercial intent and a salesperson or a sales rep starts to drive the conversation, usually to reduce friction. That honestly, that should be the number one priority versus what happens before they start that conversation with a prospect. And it's a meaningful one because if you turn to B2C, a well-run B2C effort, usually the distinction between marketing and sales is meaningless because someone lands into our site, puts something on the cart and buys. And so whatever brought them to the site and whatever helped him or her to buy, there was no human involved. There was no in-between interface where you start shifting from marketing towards sales, right? So what do we exactly mean by, you know, when you say this is a marketing function, this is a sales function? I think that in B2B, the difference is one of the degree of effort, right? So I think when you have a salesperson that is not handling someone coming inbound, but rather trying to make the sale, right? Trying to pitch or present an offer. Basically, you have a person that you want, human trying to impress upon another human, you know, the value of the company, the problems you solve, why you can be trusted, all that. And when you do it at scale, right, when one person or one system tried to reach out to many, many, many buyers, potential buyers at scale, then you gradually transform into, um, marketing what, what a salesperson could do. So I'm using that analogy and this long arc on the answer to say, I think the reason why sometimes they are put against each other is because ABM, in a nutshell, it's a more focused marketing effort. You can actually in some sense call it like, it is kind of like a sales effort with a marketing flavor versus demand generation that in a true sense is more of a marketing motion, um, uh, you know, in, in the, the true sense. And so That I think is the biggest difference and why sometimes they are compared one against the other. But obviously, as we will see, probably they should be seen as something that is complementary and that applies to some scenarios, one or the other. And there's some situations where, you know, you wouldn't use ABM. And, um, and that's what probably we're going to explore today.

Yeah. Yeah. And Marketing teams, especially in B2B, need both scale. They need to be reaching, you know, a large number of people, but they also need precision. And I think ABM really helps bring more of the precision to complement your demand gen strategy that's bringing in this game. So, um, if we're talking about, you know, combining those two strategies and complementing, complementing each other, um, let's start by defining what ABM, account-based marketing, actually looks like today. I think a lot of people hear ABM and think of, um, just like personalized campaigns or ads targeting specific accounts. But what does modern ABM look like?

Yeah, I will start saying that by definition, ABM is like the ultimate segmentation effort, right? If you start from the marketing perspective where you can say, well, my largest segment is my TAM, my total addressable market. And basically when you're trying to say, well, this is my The, the segment of the market that actually I can profitably reach out to, which becomes, I, I forgot the acronym, but something related to SAM or something like that. And then you narrow it down to even a more specific segment that will be one or more ICPs, right? Ideal client profiles, because over your old target market, um, there's some potential clients that will be better, better suited for your offer than not. And then you can even start to zooming in more into specific industries so you can tailor your overall messaging into or positioning into specific messaging for an industry. Well, take that to a stream and say, well, forget about the industries. I have this very small, very important list where— and we will talk about more about that— where there's a justification or a reason to actually make the segment one company. And therefore you're on the marketing side, you all your efforts shift completely because you're talking about creating specific assets, or if you want to call it, customize them to the account level, basically to the company level, instead of saying, well, let me talk about what we have done for this particular industry that you're on. It is— this is what we have done for one of your competitors or someone, another company that is adjacent. And I'm presenting this specifically to you. So from a marketing perspective, for me, ABM is the ultimate segmentation. That's how I will see it. And from a sales perspective, it's a little bit of that as well, right? On the sales world, usually the sales team is not organized in a way for larger organizations where you are trying, everyone is trying to sell to anyone nearly willy-nilly. Usually you start segmenting your regions of sales influence by some criteria. Usually is regions, sometimes is product lines, sometimes it's a grid where you have regions, product lines, and even industries or segments, right? You want the person that knows very well healthcare to be the one that is trying to open business on the healthcare industry because he understands the jargon and all the things that are happening there. So the same, take that to an extreme. And then you have someone that has an account assigned to them and they are responsible for opening, maintaining, and growing the business with that account, usually a very large one. And so from the sales perspective, ABM, which can be called ABS, right? Account-based sales or business development, means that a person has an account or a company assigned to them, usually a is called a target account. Yeah. And that's the basic principle.

Yeah, I, I feel like also the shift of a more modern approach to ABM with all of the tools that we have at our disposal today, it— there's, you know, the, the side of ABM where you're creating a list of companies that are the ideal companies, you know, for you to bring in as customers. But then also with all of the intent data and engagement signals that we can see from websites, then also you have that aspect of ABM where you— they're showing intent and they're, you know, coming to you and engaging with you. And then you in, in response are, are marketing back to them through ABM. Is that true? Do you agree with that?

Yes, it is. And that's where the levels or degrees from pure, if you wanna call ABM, to broader demand generation and or broader inbound marketing or general digital marketing has been fading away. And is being enabled by technology because account-based efforts are not new by any means. They didn't get discovered over the last 20 years. They have existed a long time in business cycles. It's just that when digital was not an option and when web tracking and attribution and all these fantastic things that you can do with automation were not available, you truly only were able to create experiences per account at a very high cost, right? So if you on the sales side, again, you know, you can only call so many companies through the day, right? Or insist on one. So you truly need to have assigned accounts or visit the company, right? The headquarters or go to events where you will try to target a specific company or someone in the buying committee. And the same from the marketing side, right? You will create events or situations or even collateral for a specific company, that will have meant probably print media or sending over something customized or specific physically to the accounts. So you could do so much and the cost of the effort per account was probably so large, then you can only afford to a specific company. And I want to reiterate something very important. ABM is not necessarily only about the size of the company, even when that's an important factor. To be honest, it's about the value of the business itself, of the potential business itself. It's just that usually your larger deal, your larger deals will come from your largest clients, right? So if that's the case, there's a match there. But the whole point of ABM is that you have a contract value so large potentially that it justifies, it justifies increasing the cost of acquisition tremendously by focusing both sales efforts and marketing efforts into just one account. So what technology have done for me, or from my perspective, is that it has dropped the cost of acquisition value. Therefore, now a salesperson can afford to target, you know, many more accounts even compared to the past on a given timeframe, on a month, let's say, because that person can leverage email, can leverage automation, can leverage, you know, outreaching on LinkedIn to touch some of those accounts simultaneously and, you know, offer some personalization at that level. And the same on the marketing side, right? If I was going to create collateral for marketing to present, you know, a specific or customized experience for an account, it's easier now to create dedicated landing pages per account than it was in the past.

Yeah.

Mm-hmm.

Right?

Or create a specific email to the buying committee and using AI to customize and personalize the outreach or the nurturing based on the information that you have on the account, that in the past was way more difficult. So nowadays people are calling that, you know, one-to-one, one-to-many, or few one-to-many. And that's where you have that, that slope where you eventually go into the realm of demand generation, right, where you are not specifically targeting one company rather than the industry or a segment or a solution.

Yeah. So it sounds like a lot of companies might already be doing some scale of ABN, even if you're not calling it that way. Yeah, right. So one thing I really wanted to get into in this episode is talking through how much demand gen supports ABM and kind of if they're starting to blur together how those two motions work together to create kind of like a combined strategy. How do you see that?

I believe that they def— there's definitely some complementarity and definitely you can use both at the same time. I will argue that even as technology advances, I wouldn't call demand generation efforts, um, ABM efforts and vice versa because, because there's a truly big distinction, which is focus on the accounts. And I'm going to use some examples of how you can clearly say, oh, this is true ABM versus this is just being demand generation, very, very segmented. Um, For example, you can say, well, we are going to call it ABM because we are just going to target a handful of accounts. Yeah, that's good. But if the campaign structure on the marketing side of the effort is presenting information industry-wise or solution-wise and you cannot call on the material the name of the company itself, right? This is just for this company. Then that's not truly ABM. It's a very segmented, very personalized, you know, demand gen activity, right? You might have a landing page that specifically talks to about to, to a very narrow segment or a campaign that do so. But to be truly ABM from the marketing side, you have to really work account by account on what is it they're gonna do for them. And the same applies for the sales side. It's perfectly valid to say, well, this person is going to target this whole segment or this whole industry. But if that person is not going to report on the progress of each of the accounts that they are assigned to rather than the progress of the whole segment, then they're not, they're not working toward ABM, right? That's one big distinction. The other one that is for me super important is that demand generation can get away without having 100% alignment with sales. They have to have some, at least, that's definitely recommended. But it can be in a way where marketing kind of like shares with sales what are the segments that they're focusing on, and sales give general feedback about what they have seen in the quality of the leads and the, and the type of companies that are coming in. And the type of deals that are being created and closed. So there can be a lot of integration and feedback between marketing and sales and should be when you're doing demand generation. But there's not necessarily a one-to-one conversation per account. And that's what for me makes it account-based marketing or account-based, you know, business development. When the conversations between marketing and sales are not about a specific segments or generalities about the deals, but about the accounts. Yeah, well, we will talk about every month or every week about Procter Gamble and Apple and, you know, different companies that both of us are targeting. And we want to know on both sides, what is it that we are doing on the sales side, right? We landed a conversation, that deal is progressing, we are talking about expanding services. And what is it that marketing is doing for that account on the marketing side. So that for me is true ABM. Anything beyond that is just degrees of hyper-segmentation on demand generation.

Mm-hmm. So like a real-world example of what it could look like would be, say marketing is launching a brand awareness campaign to an ICP list of 500 companies. And then sales is gonna be reaching out to the companies on that list, you know, for their prospecting. And so an ABM strategy you could kind of put in between the two to bridge the gap would be companies who show intent, you know, companies who engage with the ads, have paid clicks, that kind of thing from the ad campaign. You have a targeted one-on-one ABN, say an email goes out to them, you know, targeting the company one-on-one to further like warm up the company before sales reaches out to them.

Yes, yes, exactly. And you know, I don't wanna get too obfuscated on the idea that everything has to be personal per account. Right? I'm not saying that if you're not making dedicated landing pages for account, then you're not truly doing ABM, right? On the marketing side, uh, it's perfectly valid to say, well, we happen to have selected 50 accounts or 100 accounts that all of them are on the same industry, so we're gonna show them the same case studies and success stories. But on the reporting side, that's what it changes. And here I'm gonna use HopSpot as a reference, which is, as all of you know, our CRM of choice. When you are reporting demand generation, while you are still worried about the progression of accounts, it's still something like, you know, this many accounts fill up forms, or we got this many qualified leads, or these many qualified opportunities for accounts, for example. And sales and marketing can have a conversation like that. But when you're using the section of HopSpot that I will consider like focus on ABM, which is the target account section, the reports are about the progression of just those accounts, right? Is how many people in the buying committee for those accounts are engaging with the content and how many of them are progressing to, you know, like you were saying, right? They're showing signals of visiting the site or requesting information. You even track the revenue generated across time from those, from those accounts. So it becomes a very specific— we can pinpoint one of the companies that we are targeting. And that's what I mean by the accounts have to have a name from the beginning. The list is identified from the beginning and it's small enough to the effort that you can pinpoint specific efforts rather than broader categories and kind of like saying, oh, we got this new lead from a company that we were not trying to reach out from the beginning. And we are having conversations about that. That for me is more demand gen, right? We're casting this wide net and on a specific industry and, and qualifying what we get. And some of them will qualify, some of them will not. And, you know, sales will give us feedback on, you know, I want more of these types of accounts and less of this. So change the ICP, right? Change the strategy. But But, but the list is very fluid, right? It's more of an idea. And in ABM, the list is the list, right?

Yeah.

Can be changed, can be changed, right? You can add accounts or you can remove them, but probably you will question why, because the idea was that these are very high value companies and/or potential deals from the beginning.

Mm-hmm. Yeah, yeah, it definitely seems like you have to assess, you know, personalize the outreach in areas where it, it matters a lot because it can get, it could get to down to a lot of work if you're having to, yeah, one-on-one create personalized outreach for every single company.

And it goes to the, you know, we, we have said that again kind of getting out of the idea of just demand gen versus AVM, you use the same principle for judging, should I do paid media? Should I do organic? Should I do events? Should I do— is that should I do is, is the restrictions come from two places. The, the minimum budget that you can enforce or deploy for the channel, or the tactic and the average value of a deal, right? So for example, we have conversation with PropTechs about data on paid media, right? Your ACV gotta be of certain size to justify advertising, digital advertising, and depends on the industry and the keywords and all that. But if the ACV is not there, that doesn't mean that there's nothing that you can do on marketing. You can do other things. You can do organic, you can do email, You can do some other channels where the economics make sense.

Mm-hmm.

Um, in theory, for example, TV is a good example where the economics make sense per unit, but the barrier of entry is too high. So you really need to have a big revenue goal to justify there, even when each impression is quite inexpensive, to be honest, compared to other activities. So for ABM and demand gen, it's kind of like the same thing. Is the unit economics has to justify an ABM effort because as you said, even digitally is way more expensive to set up the strategy between marketing and sales than for demand generation.

Yeah. So at the end of the day, ABM is going to work better when demand gen, your demand gen efforts are creating that familiarity. Yes. And you have the familiarity building with demand gen efforts and then warming them up a little more with ABM, and then that will speed up your sales velocity because they're already aware and, you know, starting to be learning more about your company. Do you have anything to say kind of about that, like funnel?

I love that insight because yes, it's true. I'll say that ABM makes more sense for established brands that already have, you know, a lot of presence in the market and they happen to decide that they want to concentrate their efforts on a specific list or group of accounts. And it can be, you know, a beachhead effort where you, we want to go into this particular segment because our presence there is not great and we need to focus on that, or it can be landing and expanding more business on a group of companies that already you're working on. So that's the other thing that ABM is a little bit different, that technically you can use it not to land new clients, but rather to land more business on existing clients that have the potential, right? Again, that's usually larger entities where you're saying, well, I'm selling to this region but I'm not saying to these other regions within the company, or I'm selling to this department or function and other functions in the company can benefit from it as well. And so you have a large enough organization where the actual sales effort and marketing effort has to be redone just because of the sheer numbers of employees that work there. You might be unknown to other regions. So in those cases, I think ABM makes a ton of sense. To use as an effort not only for landing new accounts, but rather to upsell, cross-sell, and resell existing accounts or clients.

Are there any examples you've seen of, like, examples of doing it really well, or maybe some mistakes you see companies making when they're, when they try to run ABM and demand gen together?

I think the biggest opportunity is in the name itself. The naming is, it's such a sad thing because it sounds like the only group that needs to work on this is marketing. And I will argue, I will argue that if you're doing ABM and there's no salespeople on the other side that have assigned accounts, you're not truly doing ABM. And that's why it has evolved into more of like AVX, I think, because eventually you start questioning, well, if it's a current client, should, should fresh salespeople spearhead the effort? What about the account manager of the account or the customer success person that is taking care of the account right now that has maybe regular conversation with the clients and is better positioned to present new products and services and leverage what we know? Which is the right choice. So then you can become or transform it into account-based customer success or, you know, expansion. So I think that's the number one error, that if you, if you think that you can transition from demand generation to ABM without, without involving more than you have already sales, then it's gonna be a very costly effort because to be honest, most of the cost of ABM or AB, whatever, comes from the sales side. That's where you're putting most of the money and you're using, you're using marketing as a leverage, as an amplifier of that effort because that salesperson cannot be 24/7 in front of the buyer or the prospect. So you leverage that human presence by using other channels to complement it. So, and that usually translates into a very weak impact, right? You are putting all this, all this energy, but it's very weak and the laser is very weak, so it doesn't burn anything and you are just, and you're just narrowing yourself. That being the case, I would rather go for demand generation and kind of like broadly align with the sales team. That's mistake number one. Second opportunity, again, is treating something that is just a very segmented or very, very focused marketing effort as ABM, right? Saying, yes, it's ABM because the list is very small or the scope is very small. But if you don't have target accounts and if you are not measuring the success on the progression or the increase of deals for those target accounts, then you have a very targeted demand gen effort. But if you're talking about accounts that you didn't have from the beginning, well, that's demand generation for me, not target accounts, because for, for ABM, that list should be the North Star of the whole thing.

Yeah. Yeah, it really needs to be the ultimate, um, Exercise in marketing and sales alignment.

Yes, exactly.

Yeah. Awesome. Well, that's kind of all I had today. So in closing, is there one thing you'd want marketing marketers listening to take away from this conversation or any like final insights?

Yeah, I think one big one is that I think most B2B companies will benefit from demand generation at any kind of scale or type and even ACV, right? Any, any deal value. The degree of the tactics that you will use from demand generation will vary, right? If you have very low ACV, probably paid on, unless you're in certain industries, will make no sense. You will have to rely more on content or events or email marketing, whatever. But I seriously question the— I will seriously question how many companies, how many B2B companies are the right, the right target for ABM, right? ABM is really, really makes sense for a way smaller fraction of B2B companies. So if you happen to be a marketing that is thinking about ABM, just as you were saying, Miranda, I will explore, you know, the strength of the brand, the customer base that you already have and evaluate the value of the deals that you can get from there. And also having the, you know, the timeframe and patience to sustain an effort like that because we know that it doesn't matter if you select 100 accounts or if you select 10,000 accounts. Most of those accounts that you select will not be in market and they will trickle down into market over the next weeks and months. So if you select 100 accounts in a year, at most 5 of them will be, um, to put a number, right? Maybe 10, depends on your industry, in market, not even buying from you, just in market. So you will put a ton of resources into a handful, onto a very small list of which a very small fraction will be in market at any given time. And that's an effort that very few companies are willing to sustain economically. So that's why sometimes demand generation will make, or something broader will make more sense because you pretty much increase the, you broaden in the list or the number of accounts. Yes, you lower the resolution, right? The energy that you can put on each of those accounts. But, but you will have a better chance of identifying people that is getting in market than when this, the list is very small. So that's your big warning, right? Most companies will be more than, you know, okay implementing demand generation strategies or tactics. I will reserve ABM to very specific cases.

Yeah. Yeah, even just as a consumer thinking about the fine line between when you're warmed up to a brand and you kind of know who the brand is and you have at least some level of trust or acknowledgement of them. Yeah. Then an ABM or really targeted effort feels like, oh, I've been hand-selected, like I'm being, targeted towards, whereas when you have no, you know, no familiarity with the brand, have never heard of it before, it can very quickly become feeling spammy.

Yes. And, and another big warning is I will be careful not to, you know, to, to have a moving target on the list because you can also fall prey of the idea that, well, I'm just going to dedicate a lot of resources to companies that are closer to buying, right? Saying, well, this company is showing intent and this company is showing intent. So I'm going to create a very dedicated experience. That I think is fantastic. Something that definitely you should do, right? You should pour in more resources into companies that are showing intent versus companies that are not showing intent or not close to the buying cycle. That's just good judgment from a marketing and sales perspective. Why wouldn't you, why would you ignore someone that is, you know, lurking around where you are? But that's a moving target because it's not a fixed thing, right? It's in this week or this month you might have 10 of them and the next one will have 20. And so that for me also is not the list. You're being opportunistic. And so, fantastic. I don't know if you are what we call just the ad demand generation, but it's Be mindful that putting more efforts into companies that are closer to the funnel, I wouldn't call that ABM. True ABM to be, this is an individual or company that is worth a ton for us today, tomorrow, in a year, in 5 years. We want their logo in our site or in our client roster, and we are gonna do something special to increase the chances of that instead of passively waiting for them to reach out to us. So be mindful of that, right, of not calling ABM efforts that are just increasing effort or increasing, increasing resources into a counterintentional intent.

Yeah. Awesome. All right. Well, thank you as always for joining and your insights and to our listeners for listening. And we will see you next time.

Thanks. It's been a pleasure.

Bye! Bye!