Put the Proof in the Pudding – Why Finance Should Insist on ABX Approaches

CFOs should be demanding an ABX approach –– unless they are happy to see their budget wasted. As we come into planning season, everyone is starting to focus on 2023 (if you aren’t, hurry up!). Efficient use of resources is critical for success.

Targeting the RIGHT Accounts Matters Now More Than Ever

As we all navigate through choppy economic waters, ensuring that every part of your 2023 budget is being used effectively is of the essence. Especially for B2B businesses.

It’s amazing that for far too many B2B businesses, most of their time and budget is being wasted chasing, engaging and trying to sell to companies that are not in the market to buy their offerings. How is this even possible? It’s quite simple: too many B2B companies are still using B2C tactics and tools that were never designed for B2B.

So when your teams come to you asking for 2023 budget, how can you be sure this wasteful approach of chasing the wrong targets isn’t happening in your business? Simply get proof that every penny is being focused only on companies your business can actually sell to, and say no to everything else.

How Lack of Account Focus Wastes Resources: Two Examples

Let’s look at two examples where focusing on the wrong accounts wastes your limited resources:

1. Advertising

If I’m a B2C company selling boots, my approach is to raise awareness of my boots with as many people as I can. Sure, I may identify that a certain individual is presently researching boots, and want to focus on them, but anyone could decide they want to buy boots at the exact moment I contact them. So you have to be in front of them at that time. You therefore advertise anywhere and to everyone. and aim to get lots of clicks because anyone who clicks on that Advert could be relevant and so could be valuable.

This is NOT the case for B2B. Your business will have a target market of companies you can sell to –– based on industry, region, size, employee numbers etc. It makes sense to focus efforts on these companies. If you cannot sell your offerings to retailers, for example, what benefit is there in you chasing Tesco? Reporting success based on how many (anonymous) clicks you get is not a measure of a successful B2B campaign. Not knowing who actually clicked on a link is problematic because there is a strong chance it will not be a company you can actually sell to. The bottom line? You’ve wasted your advert spend.

But –– this advert targeting issue can be solved.

ABX technology from Demandbase uniquely allows our clients to control exactly who they advertise to (and where) in order to ensure brand safety and relevance, so you ONLY advertise to relevant companies and can also report clicks and resulting engagement by each account. In this world, every advert delivered is relevant, every action it delivers is valuable –– so no spend is wasted.

2. Sales

In B2C, every lead is a potential fit and can be sold to, so it makes sense to fill your funnel with as many leads as possible. Quantity matters.

In B2B, this is a bad way to work because quality is more important than quantity. Going after everybody will result in you filling your pipeline with poor fit opportunities that your sales team cannot close. In an ideal world, sales would just chuck leads back at marketing as useless, but human nature says if this is all we’ve got in pipe, we will go for it (wasting more resources chasing bad leads).

The sales team is very unlikely to close, which will result in poor close rate metrics. But actually closing these deals could be worse for your business –– it’s a poor fit, so discounting in order to close would likely lead to lower Average Order Value (AOV). And as a poor fit, the customer experience is also poor, so the chance of renewing is dramatically lowered.

Demandbase technology can help solve the problem.

As we only focus on good fit, in-market companies, the pipeline gets filled only with accounts ready to buy. This ensures sales can focus 100% of their time and budget on the right opportunities, close deals faster, at higher AOV and obviously better close rates. The chance of renewing these accounts is also much higher… all key metrics to your business.

Now, why am I posting this content aimed at CFOs?

Because you hold the purse strings, you can decide if your business throws away budget on areas that will not benefit the business. You ensure improved metrics that make a real difference to the business.

Next Steps: Demanding Proof of the Right Accounts

When marketing and sales come to you for budget sign-off for 2023, ask them to prove that the budget you gave them in 2022 wasn’t wasted on raising awareness and chasing non-fit companies that don’t help your business.

Note: by the way, anonymous click-thru rate (CTR) is proof of nothing other than a person –– who may well be irrelevant, possibly even a competitor –– clicked. Increase in anonymous site traffic means nothing if you can’t confirm that they are people you can sell to and not competitors, bad fit/irrelevant visitors.

If they can’t prove what you ask, something needs to change. And of course, you will want proof through 2023 that all of this activity is ONLY going to those companies your business can sell to –– and the pipeline being built is full of relevant, in-market opportunities, and you can see the spend and engagement on each individual company you target. If not, you are signing away 50%+ of your precious budget on activity that will do nothing for your business.

If you’re not seeing the answers you need, point them to Demandbase and start ensuring every penny is spent only on companies you can actually sell to. It’s time to take wastage out of budget spend and deliver results that really matter to your business.