ABM vs. Inbound Approach: 7 Differences to Keep in Mind

Account-Based Marketing vs. Inbound Approach: 7 Differences to Keep in Mind

Marcus Svensson

December 12, 2018

Is there a middle way to deal with the two marketing approaches? Many marketers believe that the two approaches cannot coexist in a single company as it would be hard to implement them due to their various differences.

On the other side, some believe that one does not exclude the other since each can benefit the company in its own way. The simplest mode to get an idea regarding the difference between inbound and account-based marketing is simply by comparing their sales funnels. Two opposite sales funnels.

Despite their differences, the two approaches shall be part of any marketing strategy. But to what extent one shall receive more importance? Well, this decision is usually influenced by several factors, which are mostly business-type and customer-base related.

Before deciding how to mix the two marketing techniques, you may want to get a clear idea of how much can one or the other help you and what resources are mandatory for each approach.

What is ABM?

ABM, or Account-Based Marketing, can be easily defined as a B2B marketing strategy in which the efforts and resources gather together to serve a narrow market segment. Otherwise put, the ABM metrics are focused on decision-makers and influencers rather than individuals.

At this point, you know the customers’ accounts, to which you want to sell your products and services, and you put your efforts into penetrating those accounts. The ABM is usually used by companies selling high-priced products and services.

Resources for Account-Based Marketing

A common reason for rejecting the ABM approach is related to the resources involved in this process. Human resources and time are important pillars in an ABM strategy. But despite this expensive resources, the ABM strategies do pay off since the ROI on these is higher in comparison to other marketing activities.

Another mandatory pillar relies on the collaboration between Sales and Marketing departments. As complex as it sounds, this may have a positive impact on the operational costs of the company.

A strong bond, between the two departments, can lead to diminished marketing costs often resulted as a misalignment between these departments. As statistics show, a misalignment among the two departments may reach a gap of $1 trillion a year.

What is Inbound Marketing?

Inbound marketing is an approach used to attract traffic, engage prospects and convert them into customers through content marketing, social media tools, SEO strategies, and branding. Unlike ABM, inbound marketing begins by focusing on a broader audience.

The disadvantage here is that an inbound marketing strategy may not bring the customers you are really looking to engage. Unlike ABM, the inbound strategy is usually created by marketers with little to no involvement in the sales team.

Inbound vs. Account-Based Marketing

Both strategies are ways to increase sales but to what extent? There are several divergences between the two marketing approaches, which, if understood well, can provide insights into how and when to mix them or use the two separately.

The sales funnel

The two approaches have opposite sales funnels. The ABM strategies begin with a clear focus on a set of customer accounts, while the inbound practices start by addressing large audiences with the purpose to attract, engage and convert users.

The outcomes

With ABM you obtain the results you are looking for since you are marketing to a specific customer. With the inbound approach the customers come to you as a result of your strategies, but, unlike the ABM approach, here the quality of the customers might be lower than what you’ve aimed for.

The ROI

In comparison with an inbound marketing approach, the ROI of an ABM campaign can be measured easily due to the clear outcomes resulting in sales, closed deals and revenues.

Content is not king anymore

ABM requires a human approach, unlike the inbound marketing. Many marketers believe that content may sometimes bore the users since so many companies are overusing it. This is where ABM comes in handy by solving the needs of the users, instead of talking about them. ABM will provide you better outcomes within the customer satisfaction metrics.

Collaboration across departments

While the inbound marketing strategy is created within the marketing, ABM tactics require a collaboration across all the company’s departments, leveraging all their tools to enhance the highest level of engagement.

Sales targets and brand awareness

At the core of the ABM approach stands sales target. In the case of inbound marketing, the core relies more on brand awareness and lead generation.

The Pareto principle

If your sales and revenues are based on the 80/20 rule, then using ABM rather than inbound, may ensure your company a higher profitability.

Many companies spend a big part of their marketing budget on engaging new customers, but if 80% of your revenues come from 20% of your clients, otherwise, known as “Pareto Principle,” then the ABM approach becomes a rule of thumb.

Final Thoughts

Simply put, an ABM approach offers you the chance to get what you want, while with an inbound approach you will get what you get. If you are activating into B2B selling than the ABM approach shall weight more within your strategy, as you need to convince a group of decision makers rather than individuals.