Pros and Cons of Account-Based Selling | Is It Right for You?
Michael Porter, a venerated professor at Harvard Business School, once wrote: “The essence of strategy is choosing what not to do.”
In other words, just because you can do something doesn’t mean you should. Knowing the difference can cause a sales department to sink or swim.
In the wild, wild world of B2B sales strategies, account-based selling – a coordinated approach between sales and marketing to pursue a multi-faceted campaign focused on selling to high-value accounts – is a perfect example. This strategic approach that is meant to focus on shortening the sales cycles and increasing win rates of the highest-value accounts is a powerful GTM motion when used correctly.
Account-based selling is often the approach leading to the highest revenue and profit potential. However, it isn’t always the best choice for a company.
As with all things, there are pros and cons to an account-based selling approach. This may tilt the scales in favor or against adopting it for an organization. To help figure out if account-based sales development is right for you, we’ve put together the top pros and cons of account-based selling. Let us help you determine if your team can benefit from it.
Top Pros and Cons of Account Based Selling
Use this template to build plans for account-based selling.
PRO: Larger Contracts and Faster Deal Sizes
While getting your foot into target companies may seem daunting, when an account-based GTM model is used correctly, deal cycles should accelerate and contracts should be bigger. Put another way, strategic accounts (those with more revenue potential) have more white space that can be farmed to produce even more deals beyond the first. Sales teams who work closely with internal teams to surround and develop rapport with an account will excel.
So, by pursuing larger B2B customers with a higher average deal size, you’re more likely to create more revenue from a larger sales pipeline from just that account.
(By the way, 01% of pros who follow an account-based strategy report higher average deal sizes ; 25% say deals are over 50% more lucrative.)
Other pros include:
Targeted Approach At Target Accounts
Bringing together different teams to identify, collaborate on, and engage a specific list of high-value accounts is a good thing. Account-based selling usually forces teams to remove silos and obstacles between different groups, and can even force rethinking of KPIs.
All of the teams should be focused on one goal, driving revenue from these accounts. This sales strategy will theoretically make it easier because you already have the relationships in these accounts after you execute your strategy. One of the benefits of account based selling and adopting this strategy centers around larger contracts and better customer retention, which we’ll dive into.
One of the standout advantages of account-based selling is its targeted approach to sales. This approach involves focusing your efforts on a select group of high-value accounts, rather than casting a wide net. Here are some key benefits:
Account based selling enables your sales team to channel their energy into high-value accounts, increasing the likelihood of closing deals with these key clients. By concentrating resources where they matter most, you can expect a significant boost in revenue. Building the list is the foundation of this strategy, and a clear understanding of your ideal customer profile and the accounts most likely to need and purchase your solution is important (This isn’t a dream list of the biggest companies on earth for 99% of us). Marketing and sales need to be fully aligned on the top accounts and the vision for moving them through the sales cycle.
Personalization and Customization
With account-based selling, you can tailor your sales and marketing efforts to the specific needs and preferences of individual accounts and your ideal customer profile at large. This level of personalization enhances customer relationships and increases the chances of successful conversions. Talking about specific challenges/pain points by persona and industry is a good start. Leveraging success stories for customers in similar industries and of similar size is also impactful. B2B buyers expect to have experiences that are relevant to their day-to-day and sales outreach will be less impactful if this doesn’t happen.
B. Alignment of Sales Team and Structure
Breaking down silos within your organization is a crucial aspect of account-based selling. Here’s why this alignment is advantageous:
Breaking Down Silos
Account-based selling encourages collaboration between different departments and should rally the team around similar goals and objectives. A sale is the end-game, but understanding who is engaged, what content they’re consuming, what key stakeholders are working to accomplish, and more should be shared in your account plan to win the business. Sales and marketing teams need to be aligned and ensure as much important data is visible to the teams as possible.
Collaboration and Teamwork
By aligning your sales team and structure, you promote a culture of teamwork. Team members share insights and work together to develop strategies that resonate with target accounts, leading to more effective sales campaigns.
The account-based selling model offers numerous benefits that can significantly impact your bottom line:
Improved Lead Quality
With account-based selling, you focus on quality over quantity regarding leads. This results in a higher percentage of leads that are likely to convert, reducing wasted time and resources.
Enhanced Customer Engagement
The personalized approach of account-based selling fosters deeper customer engagement. Clients feel valued and understood, leading to longer-lasting and more profitable relationships.
Measures of Success
Measuring the success of an account-based selling strategy is critical. Here’s how it pays off:
ROI and Revenue Growth
Account-based selling can lead to impressive return on investment (ROI) figures. As you close more high-value accounts, your revenue growth potential skyrockets, making account-based selling a valuable strategy for businesses looking to increase their profits.
Customer Satisfaction and Retention
Success in account-based selling often translates to higher customer satisfaction and retention rates. Satisfied customers are more likely to become lon
CON: Account-Based Selling Requires More Resources (Tech, Training, and Teamwork)
Change Management: You need a leader who will rally different functions of your revenue-focused teams and drive alignment, buy-in and collaboration in order for this strategy to work.
An account-based sales strategy isn’t something you can do in a simple, shoestring fashion. You’ll need more resources to carry out this kind of sales process. That includes more sales tech, training, subject matter expertise, and customized content and experiences to engage multiple stakeholders at these accounts.
The good news is that you don’t need a full suite of sales tech to go after key accounts. A CRM like Salesforce helps – particularly if it’s optimized with a key account management app. You can also benefit from data analytics and marketing automation for larger accounts.
Training: Sales reps may be very capable of selling into a smaller account on a one-to-one basis. They may not be familiar with how to scale up and work as a part of a team collaborating from the same playbook. A sales manager needs every sales rep to be comfortable with this new process.
Teamwork: Sales leaders and key account managers have to put in more work to coordinate so many moving pieces. You don’t want confusion and chaos. You also don’t want wasted resources or duplicated effort. Not every sales org has that infrastructure in place.
Don’t expect to pull off an account-based selling strategy without putting serious muscle behind it.
PRO: An Account-Based Selling Strategy Is More Efficient
Efficiency isn’t everything – famed management expert Peter Drucker once wrote, “Efficiency is doing things right; effectiveness is doing the right things.” In sales, though, efficiency matters quite a bit no matter what your strategy may be.
Compared to other approaches that go after major accounts, an account-based B2B sales process is more efficient because it best combines all of the resources at your disposal so that the total outcome is much more than the sum of its parts.
Without aligning sales and marketing , for example, you’ll have wasted effort – some actions don’t lead to the right outcome – or duplicated effort – two or more different people are doing the same thing unnecessarily.
Also, tackling a major account with some central, guiding philosophy means you’ll spend more time and money going after all of the potential white space in an account – thereby watering down your ROI.
When choosing between strategies for your sales team to follow, sometimes efficiency and effectiveness are the same things. Any organization wanting to get maximum impact from the resources it has should consider an account-based selling strategy .
CON: The ROI Isn’t There for Smaller Accounts and Deals
Because account-based sales and marketing strategies require more resources, the ROI just won’t be there if the target company size or deal size isn’t big enough.
This is where it’s really important for sales strategists to curate a qualified list of high-value accounts with the size and purchasing power that can justify the higher resource requirement for ABS.
Of course, the minimum deal size or company size really depends on your organization’s sales goals. Whatever those numbers are, your sales funnel needs to be built for the right type of customer.
This is one area where sales and marketing alignment is especially crucial. If marketing efforts are focusing on the wrong prospective customers, your reps won’t be happy. They’ll just waste their time (your budget won’t be happy, either).
An account-based marketing strategy must be aligned with the types of target accounts that have potential ROI to justify the approach. Simplified, one-to-one B2B sales strategies don’t have that problem.
PRO: Your Customer Retention Rates Will Probably Be Higher
It costs more money to get a new customer than to keep a current one. The good thing about an account-based strategy is that it usually results in higher retention rates for existing customers.
Why? One reason is simple: you’re talking to more key stakeholders. This ensures that the chance of your ties to the company being severed if/when one stakeholder leaves is significantly lower.
You’ll also find more deals within each account (like we mentioned above). This means you’ll continue to do business with the customer on some level.
You’ll also develop more trust and build more confidence in you as a vendor and partner.
That last point – partnership – is a huge benefit of ABS. It’s always good to have your buyer view you as a partner instead of merely a vendor who is concerned with a transactional relationship. Sellers who can build a mutually beneficial, two-way bond with an account will keep that customer around for much longer.
CON: You’ll Need More Content – A Lot More
You need relevant content that speaks to the needs and desires of your target audience. The problem is, that when you’re pursuing major target accounts and talking to multiple stakeholders at multiple levels, you’ll need even more personalized content than you would otherwise.
It’s not just the volume of content that matters, though. You need some way to manage all of this content so that potential customers get the content that’s relevant to them. Every stakeholder in a target audience is different. Even decision-makers within the same business unit can have differing priorities or concerns that matter the most to them.
You need to craft content that fits those buyer personas – and you have to deliver that content in a timely manner based on where your buyer is in the buying process.
It’s a challenge that some B2B companies just don’t have the resources or structure to meet. With the right digital content management approach , though, an organization will succeed.
As you can see from the pros and cons of account-based selling, it isn’t for everyone. Your company may benefit from it, though, as more and more B2B companies are realizing each year. After weighing the pros and cons, implementing (or upgrading) an account-based strategy can turn out to be the best decision you make all year.
What is the best way to build a target market or target account list?
Answer: This is arguably the most important but most overlooked step of a true account-based selling GTM motion. Understanding where you win the most, why you win, and identifying a list of accounts that fit a multitude of criteria that establish them as having the best market fit is important. If the list selection and creation are bad, then everything else is destined to fail. Look at CRM data, which industries do you win the most in? Who are your best customers? What do they look like? Look at expanding upon these individual accounts and uncovering a list of similar accounts. Using technographic data may also help you segment accounts in or out of this list. A salesperson can help with this.
Who is responsible for developing and owning this strategy?
Far too often, the entire sales team expects marketing to own it, and vice versa. This B2B sales methodology is truly a collaborative approach that requires every facet of your team to be involved. Customer success/Account Management has great insights into your best customers, the burning questions, pain points they want to solve, and how your features/products tie back to that. Salespeople have built relationships, they work with different stakeholders, and understand different use cases. Marketing will help identify the types of accounts or viable accounts or industries that their dollars will go the furthest with.
Don’t silo off this knowledge. However – there is a caveat, there should be a “lead” or overall owner who is the liason and coordinator for different teams to work together. They will help handle the coverage and penetration of accounts at scale through email marketing, 1:1 paid social campaigns, customized content hubs, battle cards, and more.
Is account-based selling only relevant for larger, enterprise products or services?
In short, it truly depends. Every company has a different sales approach, sales model, average deal size, and sales cycle. What some companies might consider to be “enterprise” or larger, others might not. The marketing team needs to understand the goals of the prospective customer and the role they play in achieving those outcomes, and then decide if working towards an approach that centers around target accounts is the best one.
At Prolifiq, if we run an account-based campaign, we typically run them at a list of accounts that meet certain thresholds, with a possible spend of at least 50% larger than our average deal size & customer. Use your Operations team to help you figure out where your middle ground is for ACV and customer size/revenue, etc. Which types of companies adopt your product or service most easily and how much do they spend? This is another place to look at the start within your customer base. so that you’re winning more of your ideal customers