ABM vs Lead Gen: Which Strategy is Right for Your Business?
- CEO at DeckLinks, Speaker, Podcast Host
- Published on April 22, 2023
- Updated on August 29, 2024
Table of Contents
You have two opportunities to fill your sales funnel: cast a wide net to capture as many leads as possible or go spearfishing for high-value target accounts. This Account-Based Marketing vs Lead Generation dilemma has kept B2B marketers up at night for years. But there’s good news – with the right strategy, you can have your cake and eat it too. But finding the right balance can be tricky. This guide will walk you through the core differences between Account-Based Marketing vs Lead Generation, when to emphasize each, and strategies to optimize the hybrid approach.
KEY TAKEAWAYS
- ABM and Lead Generation are distinct strategies that cater to different business requirements. ABM focuses on customizing the experience for high-value accounts, while Lead Generation seeks to attract a larger pool of potential clients via organic channels.
- Companies that operate in a niche target market, have long sales cycles, high Customer Lifetime Value (CTLV), require high levels of personalization, or sell complex products or services can benefit from a strong ABM program.
- Lead Generation is recommended for companies that have a wide target audience, quick sales processes, and operate in highly competitive markets.
- The main distinctions between Account-Based Marketing and Lead Generation involve the intended audience, degree of personalization, alignment of sales and marketing, and the metrics used to measure marketing campaign effectiveness.
- To make an informed decision between Account-Based Marketing vs Lead Generation, companies should take into account their target audience, sales cycle, CLTV, personalization needs, product complexity, available resources, and business goals.
What is the difference between Account-Based Marketing vs Lead Generation
Lead generation targets a broader audience with more generic messaging, as opposed to the highly personalized approach of Account-Based Marketing. ABM focuses on specific high-value accounts, Lead Generation is more about casting a wide net to capture as many potential customers through organic channels as possible.
How Do You Know if ABM Strategies are Right For Your Company
Account-Based Marketing can be an ideal fit for your company if:
- Your company operates in a niche target market: ABM can be very effective if your product or service caters to a particular niche or high-value segment. By taking advantage of ABM, you can concentrate on the most crucial potential clients and provide them with personalized experiences to engage them more effectively.
- You have a long sales cycle: ABM is particularly effective for businesses that have longer sales cycles. This is because ABM allows marketing and sales teams to develop stronger connections with the accounts they’re targeting, which can lead to higher conversion rates.
- You have high Customer Lifetime Value (CTLV): Investing in ABM to build strong relationships is worthwhile when your customers have high CLTV. Strong relationships help to retain these high-value accounts for a longer period.
- Your customers require a high level of personalization: ABM is a great option if your ideal customers respond well to personalized marketing and sales collateral. With ABM strategy, your marketing team in collaboration with the sales team can develop personalized content and experiences that are specifically designed for each key account.
- You’re selling a complex product or service: With complex products or services, ABM can be quite powerful as it allows marketing and sales teams to deliver tailored content that’s laser-focused on the unique needs and pain points of each key account. This helps make sure the decision-makers are getting an in-depth explanation about why your product or service is worth their time and money.
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How Do You Know if Lead Generation Strategies are Right For Your Company
Lead Generation can be an ideal fit for your company if:
- Your company operates in a broad target market: Lead Generation strategy can be beneficial for your company if you have a diverse customer base as it can help you reach a wider range of potential customers.
- Your sales cycle is short: Lead Generation is more effective for businesses that have shorter sales cycles. This is because the main objective is to generate a large number of leads that can be easily converted into customers.
- You’re in a highly competitive market: Generating a high volume of leads can be beneficial in competitive industries as it increases the likelihood of acquiring customers and maintaining a competitive advantage.
What is the Difference Between Account-Based Marketing vs Lead Generation
Lead generation is like driving a hybrid car – you get good gas mileage but limited power. Account-Based Marketing is like a sports car – sleek and fast but thirsty. These are the 4 key fundamental differences between Account-Based Marketing vs Lead Generation:
Account-Based Marketing vs Lead Generation - Key Difference #1:
Target Audience.
Imagine your marketing strategies as an archer attempting to hit the bullseye on a target. Adopting an ABM approach involves targeting a limited number of high-value accounts, similar to aiming for a small group of bullseyes with laser-like accuracy. These accounts usually belong to large organizations with intricate purchasing systems, necessitating an individualized approach. In ABM, emphasis is placed on quality over quantity.
Lead generation is different from the previous approach because it aims to reach out to a larger audience to capture more leads. Rather than focusing on specific targets, the goal is to cast a wider net and capture as many leads as possible in a shorter amount of time. This strategy is more appropriate for businesses with a larger target market and shorter sales cycles.
Account-Based Marketing vs Lead Generation - Key Difference #2:
Personalization.
Imagine you’ve just been to the most amazing party – and you’re made to feel right at home. The host remembers your favorite drink, they chat about that band everyone loves so much… ABM is no different! This ABM strategy understands how important it is for businesses to make genuine connections with potential clients on an individual level. By addressing their issues through personalized content and experiences, there’s a higher chance of conversion – plus stronger relationships along the way.
Lead Generation isn’t as personalized, but it certainly has its own appeal. Instead of focusing on a few individuals at one company, this approach casts out a wider net with more general content and messaging to attract a larger pool of qualified leads that can help your sales team get more prospects into the sales funnel.
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Account-Based Marketing vs Lead Generation - Key Difference #3:
Sales and marketing alignment.
Account-Based Marketing success relies on a strong partnership between sales and marketing teams. A strong team alignment is a perfect recipe for targeted ABM campaigns that actually deliver. By working together to share insights, data, and goals, both teams can stay aligned from start to finish creating an unstoppable combination where every target account has the highest possibility of converting.
While Lead Generation also requires collaboration between sales and marketing teams, it does not require the same level of synergy as ABM. In lead generation, the marketing team primarily focuses on generating leads. Once the leads are captured, the sales team takes over and works independently to nurture and convert them into customers.
Account-Based Marketing vs Lead Generation - Key Difference #4:
Metrics.
To evaluate the effectiveness of ABM and Lead Generation, marketing and sales teams use different metrics. While measuring success is important for both, ABM primarily focuses on building high-quality relationships with target accounts and generating revenue from them. Key metrics for ABM include account engagement metrics, pipeline velocity, and deal size.
On a different note, Lead Generation or demand generation focuses on the number of leads produced, the rate at which they are turned into sales, and the expense for each lead. The main objective of lead gen or demand generation is to acquire the highest number of leads possible within a set budget, while still keeping the conversion rate reasonable.
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What are the Pros of Account-Based Marketing Strategy?
There are 7 major Pros of Account-Based Marketing Strategy:
Pros of Account-Based Marketing Strategy #1:
Highly targeted and personalized approach.
Account-Based Marketing strategy takes an intimate approach to connecting with prospects, crafting personalized messages and marketing and sales collateral content tailored just for them. This type of hyper-focused strategy helps build a genuine bond between companies and key target accounts by addressing exactly what matters most – assigning value over making generic sales pitches. As a result, these conversations become more meaningful leading to higher ROIs.
Pros of Account-Based Marketing Strategy #2:
Strong sales and marketing teams alignment.
ABM fosters collaboration between sales and marketing teams, aligning their goals and strategies to target key accounts effectively. This united approach leads to better target account selection, more cohesive messaging, and a smoother buyer’s journey, ultimately improving the chances of closing high-value accounts.
Pros of Account-Based Marketing Strategy #3:
Higher ROI.
Account-Based Marketing allows businesses to take a targeted approach when searching for new high-value accounts. By dedicating resources and time to building relationships with key prospects, the potential ROI can be substantial even if there are fewer target accounts closed than other lead generation strategies – resulting in larger contracts and higher CLTV.
Pros of Account-Based Marketing Strategy #4:
More accurate metrics.
The targeted approach of Account-Based Marketing enables better measurement and attribution of marketing efforts. It allows companies to track the impact on their target accounts and refine their strategies accordingly. This helps marketing teams to demonstrate their contributions to overall business growth with clear metrics, and allocate resources more effectively.
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Pros of Account-Based Marketing Strategy #5:
Better customer experience.
ABM’s tailored approach to customer experience provides huge mutual benefits. By better understanding the distinct needs and pain points of target accounts, ABM teams can deliver content, offers, and communications perfectly suited to their target audience allowing them to build trust and long-term relationships with key accounts that ultimately lead to increased customer lifetime value as well as support for your brand.
Pros of Account-Based Marketing Strategy #6:
Better brand perception.
By employing Account-Based Marketing, companies can provide their target audience with personalized and valuable content that demonstrates an understanding of their needs, industry trends, and challenges. This can help establish the company as an industry leader and build trust with potential customers, increasing the chances of being chosen as a preferred vendor.
Pros of Account-Based Marketing Strategy #7:
More effective resources allocation.
ABM allows companies to make better use of their resources, both in terms of time and budget. Marketing teams can invest their efforts in creating impactful, targeted campaigns for high-value accounts that yield more significant returns, rather than spreading resources thinly across a broader range of less valuable leads. In many cases, this focused approach enables companies to achieve better results with the same, or even fewer, resources.
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What are the Cons of Account-Based Marketing Tactics?
There are 7 major Cons of Account-Based Marketing Tactics:
Cons of Account-Based Marketing Tactics #1:
Resource-Intensive.
Account-Based Marketing is a big-hitter in the B2B marketing world, but not one to be taken lightly. With the need for substantial resources from both sales and marketing teams including research, personalization, and marketing campaign implementation – ABM can prove too much of an ask for smaller companies or those with limited resources. Careful consideration needs to go into implementing an Account-Based Marketing strategy if you’re looking to get great results.
Cons of Account-Based Marketing Tactics #2:
Time-Consuming.
ABM takes time. Crafting and implementing a personalized approach to customer engagement requires careful research and target accounts selection, as well as customized content for each account. Certainly, not something that can be done on the fly! For those with tight deadlines or expecting quick results, this commitment of resources might mean reconsidering an ABM strategy.
Cons of Account-Based Marketing Tactics #3:
Requires tight sales and marketing alignment.
Account-Based Marketing requires a delicate balance between sales and marketing teams. Without properly aligned teams, high-value accounts may not get fully engaged – resulting in an ineffective strategy that falls short of achieving its full potential. Companies should strive to create collaboration between both groups for maximum impact with their ABM campaigns.
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Cons of Account-Based Marketing Tactics #4:
Expensive.
Implementing ABM often necessitates investing in advanced marketing tools and technologies to facilitate targeting, personalization, and analytics. ABM tools can be expensive, especially for small businesses or startups operating on limited budgets. The potentially high initial investment required for Account-Based Marketing might deter some companies from adopting this approach, even if it could yield significant long-term returns.
Cons of Account-Based Marketing Tactics #5:
Limited scalability.
ABM is a valuable tool for businesses to make an impact on their high-value accounts, but its tailored approach can be less practical when rapid expansion or entrance into new markets are your goals. With this in mind, other lead generation strategies might offer better scalability compared to Account-Based Marketing.
Cons of Account-Based Marketing Tactics #6:
Narrow reach.
ABM can be a powerful strategy for targeting high-value accounts, but companies should also remain aware of the potentially narrower reach it imposes. Not considering non-targeted segments may limit customer base growth, especially in industries with new entrants into the market – limiting access to valuable untapped revenue opportunities.
Cons of Account-Based Marketing Tactics #7:
Dependence on high-quality data.
Account-Based Marketing relies on accurate, up-to-date data to identify and target the right prospects effectively. Inaccurate or outdated data can lead to wasted efforts and resources, as marketing teams might spend time creating personalized content for the wrong targets. To ensure the effectiveness of ABM campaigns, companies must invest in maintaining high-quality, current data, which can be both time-consuming and costly.
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Account-Based Marketing Examples
Account-Based Marketing Example #1:
A personalized event invitation.
A SaaS company planned to host an exclusive event to generate excitement for their new product launch. To ensure the presence of important decision-makers in their target accounts, they opted for an Account-Based Marketing strategy.
To implement the ABM strategy, the company took the following steps:
- Identified target accounts: The ABM team identified high-value prospects for their upcoming product launch event, ensuring they focused on the most important potential clients.
- Researched interests and preferences: By analyzing the online presence, social media activity, and industry involvement of the target accounts, they gained insights into their interests and preferences.
- Created personalized content: The marketing team crafted personalized video email invitations using DeckLinks that incorporated their research insights, addressing each recipient by name and highlighting the aspects of the event that would appeal to them.
- Sent personalized video invitations: Personalized video emails and social media messages were used to send invitations to the target accounts.
- ABM campaign results: The SaaS company customized their ABM approach, which made the key prospects feel special and resulted in a successful event with a high turnout and valuable relationships formed.
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Account-Based Marketing Example #2:
Thought-leadership collaboration.
A cybersecurity services company aimed to establish themselves as an authority in the industry and build a strong connection with a crucial decision-maker at one of their target accounts. To achieve this, they decided to move forward with a thought-leadership collaboration approach.
These are the steps the company took to implement the ABM strategy:
- Identified the target account and influential decision-maker: The ABM team has found a key decision-maker in one of their target accounts. This decision-maker is well-known for their knowledge and expertise in the target industry.
- Proposed collaboration: The company presented a proposal to the decision-maker regarding collaborating on a thought-leadership piece, highlighting the advantages of working together.
- Developed content together: The ABM content team and the decision-maker worked together to create valuable content that addressed the challenges faced by their target audience, combining their expertise and insights.
- Published and promoted the content: The content was distributed through social media, email campaigns, and niche industry publications to reach a wide and relevant audience.
- ABM campaign results: The collaboration established the cybersecurity services company as a reputable expert in their field and strengthened their relationships with the decision-maker. This, in turn, opened up new business opportunities for the decision-maker and the cybersecurity services company and solidified their reputation within the industry.
What are the Pros of Lead Gen Strategies?
There are 7 major Pros of Lead Gen Strategies:
Pros of Lead Gen Strategies #1:
Large-Scale Reach.
Lead Generation allows companies to cast a wide net and reach a larger audience, increasing brand awareness and generating a high volume of leads. This broad approach can be particularly effective for businesses with a diverse target market, as it helps them engage with a wide range of potential customers simultaneously.
Pros of Lead Gen Strategies #2:
Faster sales cycles.
Businesses with shorter sales cycles are often a good fit for Lead Generation. Lead Generation strategies focus on identifying and quickly engaging with potential customers to accelerate the process of converting them into paying customers. By generating a large number of leads, companies can increase revenue growth more quickly.
Pros of Lead Gen Strategies #3:
Easier to measure the results.
Lead Generation campaigns can provide invaluable data insights, enabling companies to make informed decisions and maximize the effectiveness of their marketing. The ability to accurately measure results with clear metrics like leads generated, conversion rates, and cost per lead allows marketers to track progress in real-time – so they can optimize performance for even better results.
Pros of Lead Gen Strategies #4:
Very flexible.
Lead Generation strategies offer companies an invaluable level of flexibility – allowing them to adjust and adapt their approach on the fly as markets fluctuate. This provides organizations with a range of dynamic options that can help maintain a competitive edge while remaining in touch with market trends.
Pros of Lead Gen Strategies #5:
Suitable for most industries.
Lead Generation is a versatile strategy that can be adapted to suit various industries and business models. Whether you’re in B2B, B2C, or a mix of both, Lead Generation strategies offer scalable and flexible options to connect with your target audience and generate interest in your products or services.
Pros of Lead Gen Strategies #6:
Very cost-effective.
Lead Generation is a smart choice for companies that need to be mindful of their budgets. With high-volume leads and potentially lower overall costs, this method can offer great ROI – even when resources are limited. It’s an attractive option for smaller businesses or those looking to stretch their marketing dollars further.
Pros of Lead Gen Strategies #7:
Can be automated.
Lead Generation offers the potential for automation, allowing companies to streamline and scale their marketing efforts more efficiently. By leveraging lead gen marketing automation tools, companies can manage and nurture leads more effectively, freeing up time and resources for other tasks and initiatives.
What are the Cons of Lead Gen Strategies?
Cons of Lead Gen Strategies #1:
Lack of true personalization.
If you’re using traditional Lead Generation tactics to reach out to potential customers, there’s a good chance they won’t connect with your message. Without true messaging personalization of an Account-Based Marketing approach, it will be much more difficult for people to engage with what you have on offer.
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Cons of Lead Gen Strategies #2:
Difficult to allocate resources efficiently.
Lead Generation may result in a large number of low-quality leads that are unlikely to convert into customers. This can be inefficient as your sales team may spend time and effort pursuing leads that won’t generate revenue.
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Cons of Lead Gen Strategies #3:
High competition.
Cut-throat competition abounds in many industries, making it an uphill battle to secure leads using traditional methods. Standing out from the pack can be a daunting task with countless brands vying for customers’ attention and wallets.
Cons of Lead Gen Strategies #4:
Lower conversion rates.
Since Lead Generation focuses on a high volume of leads rather than targeted, high-value accounts, conversion rates tend to be lower compared to ABM. This means that although you might generate a large number of leads, not all of them will convert into paying customers, potentially impacting your return on investment (ROI).
Cons of Lead Gen Strategies #5:
Difficult to target specific accounts.
If your business needs to focus on a small number of key accounts, Lead Generation might not be the most effective strategy because it’s not as precise as ABM in targeting them.
Cons of Lead Gen Strategies #6:
Unqualified leads.
Sometimes, Lead Generation campaigns can attract leads that are not a suitable match for your products or services. Consequently, you may end up wasting resources and spending time pursuing prospects that will never become customers, which can have a negative impact on your ROI.
Cons of Lead Gen Strategies #7:
Nurturing process takes longer than expected.
Lead Generation campaigns can give you a head start but be prepared for the long haul. The leads generated from these strategies may take more time than average to truly engage with your offering and move through the sales process. Keep that in mind when planning out your timelines.
Lead Generation Campaign Examples
Lead Generation Campaign Example #1:
Lead generation strategy for an online education platform.
An online education platform aimed to increase their user base and generate more leads by offering useful and pertinent content to their intended audience.
To implement the Lead Generation strategy, the company took the following steps:
- Identified target audience: The ABM team pinpointed the prime customer base for their online education platform, understanding what resonates with them and how to alleviate their pain points.
- Created engaging content: The marketing content team created blog posts, e-books, videos, and webinars, that focused on the needs and interests of their target audience.
- Promoted the content: The content was shared by the ABM team on the company website, social media platforms, and via email marketing campaigns.
- Captured leads with gated content: The ABM team made the most valuable content such as e-books and webinars available to users by requiring them to fill out a form with their contact information to access the content.
- Lead generation results: By providing an abundance of thought-provoking content and valuable resources, the online education platform effectively engaged their target audience, resulting in a surge of high-quality leads.
Lead Generation Campaign Example #2:
SEO lead generation for e-commerce.
An e-commerce store aimed to improve website’s Search Engine Optimization (SEO) to boost their presence SERPs (Search Engine Results Pages) and draw in more potential customers.
To implement the Lead Generation strategy, the company took the following steps:
- Performed keyword research: Their SEO team researched and analyzed the most relevant, low-competition, and high-traffic keywords for their products and target audience.
- Optimized on-page SEO: Then they optimized their website’s content, meta tags, and URL structure to effectively target the identified keywords.
- Worked on building high-quality backlinks profile: The SEO team then pursued link-building opportunities by reaching out to industry influencers, guest posting on relevant blogs and websites, and submitting their website to directories.
- Monitored and analyzed results: The ABM and SEO team continuously monitored their website’s organic traffic and keyword rankings in SERPs to refine their SEO strategy.
- Lead Generation results: The-commerce store achieved higher sales and increased organic traffic by implementing a robust SEO Lead Generation strategy, which resulted in more leads and conversions.
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Top 15 Factors to Consider When Deciding to Implement ABM Strategies vs Lead Gen
In no specific order, here’s the list of the top 12 factors to consider when deciding to implement ABM strategies vs lead gen:
#1 Factor to consider:
Target audience.
If you’re targeting a specific group of high-value accounts, ABM can be extremely beneficial in reaching out to them. With ABM, you can create personalized campaigns to resonate with these accounts, making it a great option for companies with a narrow and well-defined target audience. Imagine a busy marketplace and how ABM can help you stand out.
If your target audience is varied, Lead Generation may be the best fit for you. Lead Generation reaches out to a wide range of potential customers, making it ideal for companies with a broad target market, much like a box of assorted chocolates capturing the attention of many people.
#2 Factor to consider:
Available resources.
When deciding between ABM and Lead Generation, think of your resources as a valuable treasure chest filled with all the necessary tools and skills for your marketing efforts. The size and contents of this chest can greatly influence your decision.
Implementing a strong ABM program, which involves creating specific campaigns and personalized content for individual targets, can require significant resources. Having a larger budget and a strong team can be advantageous in successfully managing the demands of ABM.
If your business has limited resources or is smaller, Lead Generation might be a more accessible option than ABM. Even though it still requires resources, Lead Generation has a broader approach and is less demanding than ABM.
#3 Factor to consider:
Scalability.
When you think of your marketing strategies as a tree growing over time, it’s important to consider scalability when choosing the best approach for your company’s growth. While ABM is great for targeting specific accounts, it may be harder to scale. As your company expands and your audience grows, creating personalized campaigns for everyone could become more time-consuming and difficult to maintain.
In contrast, Lead Generation has the advantage of being easily expandable, which means that you can reach more people without making major changes to your current marketing campaigns. If your business grows, Lead Generation can help you sustain a consistent stream of fresh leads without overwhelming your marketing team.
#4 Factor to consider:
Risk tolerance.
To choose the best marketing strategy, consider your company as an adventurer on a quest. The level of risk you’re willing to take is crucial, especially for Account-Based Marketing. ABM can bring great rewards but demands a significant investment of time, resources, and effort. If your company has a high-risk tolerance, you might find ABM’s targeted approach more attractive and be willing to invest heavily in pursuing high-value accounts.
Alternatively, Lead Generation targets a wider audience, which spreads the risk more evenly. This approach may be preferred by companies with lower risk tolerance. It can generate a steady stream of new leads, without the pressure of focusing on a few high-stakes accounts.
#5 Factor to consider:
Sales cycle length.
To optimize your marketing approach, consider the length of your sales cycle, which can be visualized as a winding road with twists and turns that ultimately lead to a closed deal.
ABM is a strategy that works best for companies with long sales cycles, creating strong relationships through personalized targeting that can speed up the sales cycle and help close deals. On the other hand, Lead Generation is ideal for companies with shorter sales cycles, quickly generating a high volume of leads that can be easily converted into customers. Think of ABM like a high-speed train and Lead Generation like a fleet of bicycles.
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#6 Factor to consider:
Goals.
When choosing between ABM and Lead Generation, it’s crucial to consider your company’s business goals and objectives first. Your marketing goals can serve as a guiding light, pointing you towards the best path, just like a beacon guides ships to their destination.
ABM can be a great way to achieve your goals of building strong relationships with high-value clients and maximizing ROI. With its targeted approach, ABM often leads to higher engagement rates and stronger connections with potential customers.
On the other hand, if you want to target a diverse audience and gather leads from a wide range of potential customers, Lead Generation can guide you. Its broad approach can generate interest and collect leads from a large pool of potential customers.
#7 Factor to consider:
Competitive landscape.
Think of your company as a ship navigating through the industry waters. Your marketing strategy can be greatly influenced by the nature of your industry and competition. If your industry has few key players or focuses on specific niches, using ABM can help you differentiate and build strong relationships with high-value prospects. Customizing your approach based on the needs of your target accounts can be the driving force that propels you ahead of your competitors.
Conversely, if your industry is highly competitive, Lead Generation can serve as a reliable foundation to help you stay rooted. By using a broader approach, you can reach a wider audience and attract more potential customers, which can enhance your visibility and solidify your position in the market.
#8 Factor to consider:
Technological capabilities.
The technological capabilities of your company have a crucial impact on determining the most effective marketing approach.
To implement an ABM program successfully, companies need to utilize advanced tools and platforms to track and manage important accounts, analyze data, and create individualized content. If your company has access to complex sales and marketing technologies and is skilled at using them, ABM can yield significant results.
Lead Generation is less technology-intensive than some of the Account-Based Marketing strategies. Though using advanced tools can help, basic marketing automation platforms and CRM systems can still be used to execute a Lead Generation campaign. This makes it a good option for companies with limited technological capabilities.
#9 Factor to consider:
Team expertise.
Consider the expertise and strengths of your company’s internal team when choosing between ABM and Lead Generation for your marketing strategy. Their skills can greatly impact the strategy’s effectiveness. Assess the capabilities of your marketing and sales teams before making a decision.
To succeed in ABM, you need to have a good understanding of the accounts you are targeting and be able to develop personalized content. If your team already possesses skills in research, account management, and content creation, then ABM could be a great fit for your organization. However, if your team lacks experience in these areas, you may need to provide training or consider hiring specialists to help.
Lead Generation is a method that involves attracting potential customers in large numbers. This approach requires proficiency in content marketing, SEO, social media, and email marketing. If your team is skilled in these areas, Lead Generation may be the right approach for you.
#10 Factor to consider:
Market maturity.
Your decision between ABM and Lead Generation can be affected by the maturity level of your market. If you’re a player in a mature market with established competitors, implementing ABM tactics can help you stand out by targeting high-value prospects with personalized solutions. This can give you an edge over the competition and help you gain a larger share of the market.
If your company is new or your market is still developing, Lead Generation may be the better choice. By targeting a wider audience, you can increase awareness of your brand as the market grows. Lead Generation can help you establish your presence in an evolving market, which can lead to future growth opportunities.
#11 Factor to consider:
Budget and ROI expectations.
When deciding between ABM and traditional Lead Generation, two important factors to consider are your marketing budget and ROI expectations. ABM has a targeted approach that can result in a higher ROI, but it may require a larger initial investment. This is because it involves creating personalized content, investing in ABM platforms, and allocating resources to research and account management which can be costly. If your company is looking for a high ROI and is willing to make the necessary investment, ABM might be the better option.
However, if you have budget constraints, generating leads through Lead Generation could be a more feasible choice. Lead Generation has a lower upfront cost and can generate a steady flow of leads, albeit with lower conversion rates compared to ABM. Nonetheless, Lead Generation can still deliver qualified leads with a satisfactory ROI due to its broader market reach and lower initial investment.
#12 Factor to consider:
Company growth stage.
When choosing between ABM and Lead Generation, it’s important to take into account your company’s growth stage. If you’re a startup or a small business, you might find Lead Generation more helpful as it can help you increase brand awareness and attract a larger customer base. With Lead Generation, you can reach out to a wider audience and do so with a lower initial investment, which can help you gain traction and grow your customer base.
Established companies that have a stable customer base may prefer Account-Based Marketing to focus on high-value prospects. This helps to optimize their overall performance by refining their marketing strategies and allocating resources effectively, which maximizes revenue and strengthens relationships with key accounts. ABM targets specific accounts, making it an efficient way for established businesses to achieve their goals.
#13 Factor to consider:
Customer Lifetime Value (CLTV).
If your company is working with high CLTV clients, it can be wise to invest in Account-Based Marketing. ABM involves prioritizing your efforts toward building strong relationships with these high-value customers, which can result in improved customer loyalty, repeat purchases, and overall Customer Lifetime Value.
Lead Generation strategies, on the other hand, generally are more suitable for businesses with a lower CLTV. Casting a wide net and generating a large number of leads can still yield positive results, even if individual customers have a lower Customer Lifetime Value. It allows for a higher volume of sales, making up for potentially lower individual customer value.
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#14 Factor to consider:
Level of content personalization.
Modern marketing relies heavily on personalization and ABM is the best way to achieve it. With ABM, businesses can tailor their messaging and content to meet the specific needs and pain points of target accounts. This means more meaningful connections and prospect engagement on an individual level. While Lead Generation strategies are still effective, they don’t offer the same level of personalization. The focus is on attracting a larger pool of leads through more generic messaging, limiting the depth of personalization.
#15 Factor to consider:
Complexity of the product or service.
If you’re selling complex products or services that need detailed explanations and personalized messages, ABM could be a better option than Lead Generation. ABM can target important accounts and offer custom content that speaks to the particular needs and difficulties faced by decision-makers, which can boost your chances of making a sale.
Lead Generation strategies, on the other hand, may be better suited for simpler products or services that can be easily understood and marketed to a broader audience. The goal is to generate interest and capture leads through more general messaging and content.
Account-Based Marketing vs Lead Generation: Consideration Factors Table
| FACTOR | ACCOUNT-BASED MARKETING | LEAD GENERATION |
|---|---|---|
| TARGET AUDIENCE | Highly targeted accounts | Broad range of potential customers |
| PERSONALIZATION | High level of personalization | Generic messaging |
| TEAM ALIGNMENT | Strong alignment between sales and marketing | Sales and marketing alignment can vary |
| SALES CYCLE LENGTH | Longer sales cycles | Shorter sales cycles |
| AVAILABLE RESOURCES | Higher initial investment (time, effort, technology) | Lower initial investment |
| GOALS | Deepening relationships with high-value accounts | Generating awareness and acquiring new customers |
| COMPANY GROWTH STAGE | Suitable for well-established brands | Suitable for new or growing brands |
| COMPETITIVE LANDSCAPE | Helps differentiate in highly competitive markets | Can be effective in less competitive markets |
| SCALABILITY | Challenging to scale due to personalized nature | Easier to scale with a wider audience |
| TECHNOLOGICAL CAPABILITIES | Requires specialized ABM tools and platforms | Relies on more common marketing tools and platforms |
| INDUSTRY | Ideal for industries with complex sales cycles | Suitable for a wide range of industries |
| MARKETING BUDGET | Requires a larger budget due to personalized campaigns | Can be executed with smaller budgets |
| CUSTOMER RELATIONSHIPS | Enhanced customer relationship management | Less focus on individual customer relationships |
| METRICS | Focused on account-level metrics | Focused on individual lead metrics |
| RISK TOLERANCE | Risk is concentrated | Risk is spread |
| TEAM EXPERTISE | Research, account management, and content creation | Content marketing, SEO, social media, and email marketing |
| MARKET MATURITY | Mature markets | Developing markets |
| ROI EXPECTATIONS | High ROI with high investment requirements | Satisfactory ROI with lower investment requirements |
| CUSTOMER LIFETIME VALUE | High CLTV | Low CLTV |
PDF Documents Tracking
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Conclusion
To achieve success in today’s competitive landscape, it’s important to consider the unique advantages and disadvantages of Account-Based Marketing and Lead Generation. Factors like company goals, market position, industry trends, and available resources should be taken into account when choosing an approach. Both strategies are useful for creating demand and growing revenue or ARR.
The ABM strategy is useful for companies that have a clear target market, longer sales cycles, and are operating in a highly competitive industry. It involves building strong relationships with a specific group of high-value customers. However, implementing this approach requires significant investments in time, resources, and technology.
On the other hand, Lead Generation provides an effective and budget-friendly way to reach a larger audience. This method is great for companies with shorter sales cycles or startups, as it enables them to get the word out quickly and scale easily.
To choose between Account-Based Marketing and Lead Generation, it’s crucial to assess your company’s needs, goals, and market conditions carefully. You can experiment and also think about a combined approach that includes elements of both strategies to achieve the best outcomes.
FAQs
How to choose between ABM and Lead Generation?
ABM works best for companies with longer, more complex sales cycles focused on retaining and expanding key accounts. Lead gen helps companies with shorter sales cycles that need a steady influx of new leads. ABM requires more effort per account, while lead gen needs the capacity to handle high lead volumes.
What types of companies benefit most from an ABM approach?
ABM works best for B2B firms selling high-value, customized solutions to a targeted list of key accounts. It also helps companies with niche products that need to carefully identify and engage their ideal customers.
How to generate leads while running an ABM program?
ABM focuses on known target accounts, so complementary lead gen tactics like content marketing, SEO and ads help uncover net-new accounts that may also be a fit. Events, referrals and retargeting engaged accounts also generate new leads.
How to get buy-in for an ABM program?
To gain buy-in for an Account-Based Marketing program, align it with strategic business goals, showcase ROI potential, educate stakeholders on its benefits, and pilot a small-scale program for tangible results. Highlight how ABM differs from traditional lead generation and its value in targeting high-value accounts.
What technologies and tools support Account-Based Marketing?
Account-Based Marketing relies on various technologies and tools for success. These include CRM platforms, marketing automation platforms, video tools, predictive analytics, intent data providers, and data management platforms. These tools enable personalized, targeted engagement with high-value accounts.
How to measure the effectiveness of ABM vs Lead Generation?
ABM effectiveness is measured by account-specific KPIs, such as revenue growth and customer retention. In contrast, lead generation focuses on lead volume and conversion rates. ABM prioritizes quality over quantity, emphasizing personalized engagement and nurturing high-value accounts, while lead generation seeks to generate a large number of leads, often with broader criteria. ABM’s success hinges on building stronger relationships with key accounts, while lead generation aims for a wider reach.
Can I run ABM and Lead Generation simultaneously?
Yes, Lead Gen like SEO and content complements ABM by attracting net new accounts, while ABM focuses on your ideal existing accounts only. Combining both strategies allows you to maximize opportunities by casting a wide net for leads while nurturing high-value accounts. This approach can enhance your marketing efforts.
About the Author
Lidia Vijga is a seasoned professional with 10 years of first-hand experience in B2B sales and B2B marketing. She has a proven track record of driving growth for companies across various industries. Throughout her career, Lidia has led numerous successful sales campaigns and implemented innovative marketing strategies that have significantly increased revenue and reduced customer acquisition cost for her clients. Lidia regularly shares her insights and experiences on LinkedIn, webinars, and public speaking engagements. Lidia believes in the power of personal qualities such as kindness, empathy, and the willingness to understand others. She is committed to empowering client-facing teams with tools that enhance their talent instead of automating it, and she firmly believes that teams that show their human side grow companies much faster.
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