How to focus your sales and marketing investment on accounts that are ready to buy
In many industry segments and categories of software applications, companies have put their buying of new software on hold.
Unless you sell category of SaaS that’s booming—such as software that enables remote work―fewer deals are available now.
So here’s your challenge: What are the fast and efficient ways to find that small number of deals?
To hit your number, or even a revised number, it’s even more important to win a higher proportion of the smaller number deals available to you.
You must gather whatever low-hanging fruit may be left out there. And you must get to it before you competitors snatch it up.
Imagine if you could concentrate most of your sales and marketing activity on accounts that are almost ready to buy.
How much time and money could you save? And how much more business could you close?
This article shares how one company gets to the low-hanging fruit fast and efficiently.
Why it matters now
Marketing budgets are likely to come under pressure to cut costs. Some SaaS companies are losing headcount in sales and marketing.
So it’s a good time to review what you’re doing so you can squeeze the greatest possible value out of every investment you make.
Your sales cycles are likely to be shortest for companies that are already shopping for a solution like yours. Your sales costs are also likely to be lower.
But such opportunities also attract the most intense competition—unless you can get to them first. So you must find them fast, before they develop a preference for a competitor.
The urgency is especially high if you serve a relatively small or narrow target market.
You have fewer “chances at bat,” so you have to be more successful with the chances you get. You must find and win a higher proportion of the smaller number of deals out there.
Find, engage, and sell to the 3%
Do you know the Rule of 3%?
It’s useful in this context because it assigns rough proportions to what marketers call purchase intent.
The rule says that in any market or segment, about 3% of the potential buyers are actively shopping at any time. You might say this 3% of buyers are in market.
See Figure 1, below.
Figure 1. The ‘Rule of 3%’ suggests that in any market, only 3% of potential buyers are actively shopping for any product or service. The rest of the market is in stages that range from ‘some potential interest’ to ‘no interest at all.’
Where do these numbers come from? The late Chet Holmes shares them in his book, The Ultimate Sales Machine (2007).
How accurate are the numbers?
I don’t know for certain. Holmes offers only anecdotal evidence. And I’ve never seen the proportions documented through a research study.
The proportions square with my experience from decades in B2B sales. And I’ve seen no data that suggests Holmes is wrong.
Whether the correct number is 2% or 6% doesn’t matter much here. I cite the rule to make a simple point:
In normal times, only a small proportion of accounts in your target market are actively shopping for a product like yours.
Because of the shutdown and the pending recession, the 3% may now be only 1%. Or even less.
In some markets, the percentage of active shoppers may spike to 20% or higher for limited times.
Purchase intent may for some products may increase before or after a natural disaster, a pandemic, or other unusual situation.
Just think of the current demand for technologies that enable remote work.
What about the rest of your potential market? What are the proportions of people who aren’t shopping now? Here’s what Holmes says:
- Another 6% to 7% are open to the idea of buying
- 30% are not thinking about buying
- 30% think they’re not interested
- 30% know they’re not interested
Invest your sales effort in the narrow group who are actively shopping
These numbers have big implications for your go-to-market strategy. This is especially true if you sell high-value solutions to a relatively small number of big target accounts.
The numbers suggest that you should focus your expensive and precious enterprise sales resources narrowly.
Concentrate them on only the small percentage of target accounts that are actively looking to buy a product or service like yours.
To do otherwise wastes a precious time, resources, and money.
Figure 2. Think of the levels of buyer intent as rings on a target. Active shoppers are in the bull’s eye. These are the accounts for your sales team to focus on. Leave the rest to marketing and business development.
Figure 2 makes a different point. It shows the levels of buying intent as rings on a target.
Unlike the pie chart, the target does not try to represent the relative size of each group. It shows their relative priority for sales and marketing.
Aim for the bull’s eye
The accounts who are actively shopping are the bull’s eye. These are the low-hanging fruit, the prime targets for your enterprise sales team.
The next ring out from the bull’s eye are the 5% to 7% of accounts that are open to considering a purchase.
In each successive circle, potential buyers are less interested and further away from a purchase decision.
It may be obvious that you should go hardest and fastest after accounts that show the highest purchase intent. Yet many sales and marketing teams don’t use purchase intent to drive their priorities.
Maybe it’s because this next point is less obvious:
Recent technology enables you to spot which accounts have high purchase intent—even before you engage with them.
And you can use that knowledge to make your outreach much more efficient and effective.
I’ll explain how you can do so in a moment.
Have your marketers and bus dev teams target the rest
So your enterprise sales team focuses on the 3% of accounts in the bull’s eye.
Then your marketing and business-development people can reach the remaining 97% of accounts. They can do so much more cost-effectively than your sellers.
They should focus first on the 6% to 7% of accounts that are open to the idea of buying.
Then you can invest progressively less effort and money in each of the remaining groups where target accounts are not yet thinking about buying.
You use customer intent to focus your sales and marketing efforts.
Latané and her team concentrate first on accounts that fit their Ideal Customer Profile (ICP).
And they take it an important step further.
They appeal directly to ICP accounts that are also in market. Latané calls these as ICPIs, for ICPs in market.
She and her team can see, in near real time, how close companies are to making a buying decision.
Once a company has switched to an active buying stage, 6Sense alerts the appropriate account executive through Slack or another messaging app.
How well does this work?
6Sense undertook what they call a competitive “takeout” campaign. Their goal was to replace the solutions of their competitors in targeted accounts.
They invested $1,000 for advertising and about 20 hours of internal labor to create ads and content. They achieved these results:
- 318 newly engaged target accounts
- More than 3X Increase in engagement levels
- $315,000 in new pipeline
Although these results are impressive, especially for the time and money spent, they aren’t nearly enough to fill the pipeline for the 6Sense sales team.
Latané’s team must generate many more opportunities. For that, they must reach far beyond ICP accounts that are in market.
You don’t have to follow the ABM orthodoxy you’ve read about. You have many ways to do it well. Your program need not be highly resource intensive. You can do it on a much smaller scale than you may have thought.
In one benchmark study, about 67% of sales and marketing professionals say they had an ABM program in their company in 2019.
Here are the 2 biggest challenges they report:
- Difficulty in finding people who know how to do it (41%)
- Developing the right content (44%).
You need a tech stack to do it right. You’ll likely need these elements, at minimum:
- An ABM platform (Latané and her team use 6Sense.)
- One or more sources of reliable customer intent data (They use 6Sense.)
- A source of current account information (They use LeanData.)
- A sales engagement platform (They use SalesLoft.).
- A CRM system
Latané said 6Sense also has Marketo for marketing automation, but they seldom use it.
ABM might be too involved for tiny startups. But it needn’t be limited only to big companies.
SMBs can do ABM effectively and profitably, provided you can afford the technology.
“Calling BS on ABM: It’s Just Marketing.” Sam Jacobs. Latané Conant. Webinar. Revenue Collective and 6Sense. April 30, 2020. [Replay on demand]
“Calling BS on ABM: It’s Just Marketing.” Downloadable PDF of slides [47 slides. No charge. No registration required.]
Resource hub on ABM, 6Sense website.
“2019 State of Account-Based Marketing: Key Trends and Insights to Keep You Ahead in 2020.” Survey Report for 2020. Terminus. February 2020. [Downloadable PDF. 35 pages. No charge.]