Account-Based Marketing vs Lead Generation

Imagine two different social settings. Account-based marketing (ABM) is like an exclusive dinner party for a select few, while a lead generation campaign (LG) is like more of an open house, catering to a broader crowd.

Both social settings play an important part in the B2B marketing process.

A quote by Philip Kotler - who is best known for the marketing mix of the four P's: product, price, place, and promotion - clearly describes the principle that can also be applied to these two marketing strategies.

“Marketing management is the art and science of choosing target markets and getting, keeping and growing customers through creating, delivering, and communicating superior customer value.”

In this blog, we explore the importance of account-based marketing and lead generation to sales and marketing teams.

What is account-based marketing?

Account-based marketing (ABM) is a B2B strategy consisting of focused and personalised marketing to attract a specific customer base.

It involves marketing teams designing bespoke campaigns tailored towards high-value specific accounts, rather than unqualified leads. This is to ensure only long-term customers and the best-fit businesses are targeted.

In other words, it narrows down the sales funnel and streamlines the marketing process to hit the key decision makers.

An ABM strategy is direct and better suited to channels such as email marketing, messaging, and live events.

What is a sales funnel?

A sales funnel (sometimes referred to as the purchasing funnel) is a model used to describe the journey that prospective customers take, from first learning about a product or service to completing a purchase.

It is often depicted visually as a funnel with a wide top end (representing the ‘awareness stage’), and a thinner bottom end (representing the ‘action stage’). Between, is where the 'interest' and 'decision-making' stages can be found.

An account-based marketing use case

A payment processing company is targeting a select group of large e-commerce platforms for partnership prospects.

The company identifies a few major e-commerce players that align with its services and offers the potential for substantial business growth.

Extensive research is then conducted to understand the unique challenges and opportunities these e-commerce platforms face in their payment processing.

With this knowledge, the marketing team is able to create highly customised outreach campaigns. These may include personalised email pitches, sales meetings, tailored webinars, and one-to-one meetings with key decision makers.

This personalised approach allows the payment processing company to demonstrate how its solutions can directly address specific needs and pain points of these targeted accounts. Ultimately, this should lead to more targeted and mutually beneficial partnerships.

What is lead generation?

Lead generation is a strategic marketing approach used to attract sales leads.

A ‘lead’ refers to a person who is interested in purchasing a product or service.

Initially, it involves attracting the interest of a large pool of potential lead; gradually narrowing them down as they pass through the different stages of the sales funnel.

Lead generation gets the best results when utilising organic channels that have a wide reach, such as social media posts and guest blogging.

A lead generation use case

A payment technology start-up is looking to expand its user base.

The marketing team of the business creates informative content to position themselves as industry thought leaders. This content could be blog posts, webinars, and whitepapers on the topic of latest payment innovations and solutions.

These resources are then promoted through social media, paid advertising, and search engine optimisation to generate leads.

The startup's website features lead capture forms for visitors to access and download these resources. In exchange, the business collects information from potential customers.

The payment technology startup can build a pipeline of interested prospects - nurturing and engaging potential customers, inevitably converting them into users or customers through targeting marketing and sales efforts.

Similarities between account-based marketing and lead generation

Account-based marketing and lead generation often have similar aims for identifying target accounts and generating qualified leads.

1. A customer-centric approach

Both account-based marketing and lead generation aim to address the needs and interests of potential customers. Each involves understanding customer pain points and tailoring marketing efforts to provide solutions that meet those needs.

2. Content creation

Both strategies rely on creating valuable and informative content to engage with their audience. This content can take the form of blog posts, whitepapers, webinars, videos, and more.

3. Multi-channel approach

Account-based marketing and lead generation often involve utilising multiple marketing channels to reach their audience effectively. These channels can include social media, email, website content, and more.

4. Lead nurturing

Both strategies involve nurturing leads or prospects. In account-based marketing, it focuses on a more personalised approach with a focus on specific targets. In lead generation, it's about guiding potential leads through the sales funnel.

5. Data and analytics

Data plays a crucial role in both strategies. They both require tracking and analysing metrics to assess the effectiveness of campaigns and adjust their approach accordingly.

6. Measurement and ROI

Each approach aims to demonstrate a return on investment (ROI). They use various metrics to evaluate the success of marketing efforts, whether it's the conversion rate from leads to customers in LG or the progression of deals in ABM.

7. Responsibility

Account-based marketing and traditional lead generation are ultimately the responsibility of the marketing department (or a third-party marketing agency), often involving a sales team, too.

Effective execution of both strategies is reliant on close collaboration and alignment between the sales and marketing teams. They must work together to ensure the right leads or the right accounts are being targeted and that messaging is consistent.

Differences between account-based marketing and lead generation

Despite both strategies having overlapping goals, methods, channels and responsibilities, there are many differences between the two. These differences are important because they make each type more applicable to different businesses.

1. Goals

Account-based marketing and lead generation have different goals. ABM aims to drive revenue growth by building relationships with key decision-makers at specific accounts and increasing sales to those key accounts.

2. Degree of personalisation

The level of personalisation and timing of when it is applied is different for both kinds of strategy.

Account-based marketing is a highly personalised marketing strategy.  It aims to attract only a small number of high-quality, relevant target accounts each. Doing so by personalising the buyers journeys, tailoring communication, marketing, content, and campaigns wherever possible.

Lead generation, on the other hand, is less personalised. It aims to attract large volumes of leads. These accounts are then nurtured through the sales cycle, where the appropriate ones are filtered through towards sales. It is only at the stage of filtering that a degree of personalisation comes in.

3. Audience

Although target audience definition is critical for both account-based marketing and lead generation, each strategy is based on a different concept of its target audience.

Account based marketing focuses on attracting a specific kind of audience, B2B customers who have a high probability of conversion.

Lead generation, on the other hand, generates a more 'quantity over quality' approach. Its goal is to drive as many new leads and signs up of customers as possible.

ABM focuses on specific accounts, while inbound marketing targets a broad market of potential customers. Goals: The goals of ABM and inbound marketing are also different. ABM aims to drive revenue growth by building relationships with key decision-makers at specific accounts and increasing sales to those target accounts.

4. Methods

Account based marketing and lead generation use different methods to attract customers.

One example of this is inbound marketing. This methodology attracts customers by creating valuable content (blogs, campaigns, seminars, etc.) and forming connections with potential customers through it.

One aspect of inbound marketing is search engine optimisation (SEO). This is the field of optimising websites to gain more traffic via search engines like Google.

Account-based marketing vs lead generation: which one should marketing teams choose?

Both strategies have proven to be successful for many companies. However, which method is best suited to a particular business varies is based on a number of factors:

• Business goals

• Target audience

• Sales cycles

• Budget

• Market penetration

• Market share

• Overall marketing strategy

Account based marketing is generally considered more appropriate for companies with smaller numbers of higher-valued accounts. The logic is that these clients often need more personalisation.

Lead generation is seen as better for increasing market penetration and market share.

Many believe that it is better for businesses with smaller budgets because a less personalised content is often cheaper. However, it might also generate leads quicker, which can shorten the sales cycle.

Can't decide? Choose both!

Many businesses choose to adopt both an account-based marketing and a lead generation strategy. These can be done separately and simultaneously or together in a hybrid model.

Software like MailChimp and HubSpot can help you simultaneously maintain both types of strategy.

Conclusion

Account-based marketing (ABM) and lead generation are two different types of marketing strategies.

ABM is a B2B strategy focused on targeting a specific customer base through personalised campaigns. It tailors marketing efforts towards high-value accounts, optimising the sales process.

Lead generation is a tactic to attract for first attracting a large number of potential buyers, and then filtering them based on their readiness to buy.

Both successful ABM campaign and lead generation have similarities and differences including goals, methods, channels, and responsibilities. They each ultimately aim to increase sales, but they diverge in their degree of focus and timing in use of personalisation.

Deciding between them depends on several key factors - including a businesses goals, target audience, budget.

ABM is generally considered to be ideal for businesses targeting fewer, high-value accounts, requiring tailored, personalized messaging and content only.

Lead generation is seen as beneficial for market penetration and companies with tighter budgets due to its less personalised nature. Many companies use a hybrid model, integrating both strategies for optimal results.