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.

ABS 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 sales 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

 

PRO: Account-Based Selling Generates More Revenue

Would you rather close 100 deals at $10,000 each, or 10 deals at $100,000 each?

If you say, “Well, it’s the same amount of money each way,” you’d be right – but it’s not so simple. All other things considered equal, an account that lends itself to a $100,000 deal has the potential to deliver more big deals – deals that you can develop because you already have the relationships in place to find and close them.

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.

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.)

CON: ABS Requires More Resources (Tech, Training, and Teamwork)

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, and teamwork (especially coordinating at the manager/team leader level).

Tech: You need a system that can take in the higher volume of data you’ll generate and coordinate everyone to make sure they’re on the same page (not just your sales team, either, but your marketing team as well).

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 the 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 ABS strategy without putting serious muscle behind it. 

PRO: An ABS 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 current 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 just 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, 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 can get the job done. 

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.