🕵🏻♂️ Planning, budgeting and forecasting ABM
How to budget ABM motions, select right # of accounts and make more realistic forecasts
You plan to launch ABM and need to prepare budget and forecast.
How would you do it?
A lot of B2B marketers mention either a volume-based or budget-based approach. But I rarely hear anybody talking about goal decomposition and capacity-based planning.
Why?
Because it takes more time (it is grounded in real data and team realities) while other 2 approaches are very simple:
Get a budget
Buy ABM software
Get a list of accounts from sales
Launch the campaign
These teams spend budgets and run their playbooks for the first 9 months to realize later that the 3 months left, they are far from the targets, and they need to do something.
Today we want to share:
3 ABM planning approaches, and the difference between them
How to budget and forecast ABM program the right way
GET ACCESS TO A NEW FULL-FUNNEL ABM 2.0 COURSE
What's included with the course access:
12 modules covering step-by-step ABM strategy development: goal decomposition, ICP, account list building, ABM team, warm-up and activation playbooks, reporting, scaling ABM and building a cohesive ABM & demand gen function.
Short explanation videos and "how to" examples. We believe it's better one time to see a practical example then listen to the theory hundreds of times.
5 orchestrated and ready-to-use ABM playbooks and a detailed explanation
Report dashboard for 4 types of ABM programs: new revenue, pipeline acceleration, expansion and churn prevention
Live case studies and examples of the campaigns we implemented with the clients of Fullfunnel.io in the past few years
17 templates to simplify your ABM strategy launch: ICP, revenue analysis, intent data tracking, account warm-up cadence, customer research, account scoring and prioritization, ABM budget planning and forecasting, account planning, reports, personalized offers, and many more.
Planning & Presenting a Pilot ABM Program to Execs and Sales Framework
Minimal viable stack recommendation and guidelines on how to use it to avoid ramping up budget and being pressured to show ROI for the purchased $50k software
3 ways to plan ABM
I've mentioned 3 approaches to ABM planning. Let's cover them one by one, and how are they different.
1. Volume-based planning.
You get prospecting lists from the sales team and need to plan programs to warm up and nurture these accounts (1000+). The budget is sourced from either demand generation or demand capture programs.
To run this program, you need an ABM software (consider $50K, at least).
2. Budget-based planning.
You get your marketing budget (e.g. $200k) and allocate it among different motions:
Events
Demand capturing
Content
Design
SEO
ABM, etc.
ABM usually gets a small %, because the motion is not proven or is not strategic.
Based on that budget, you plan the programs to different tiers of accounts.
These two approaches are the most common, but they have several constraints:
They are not aligned with the revenue goals
They are not aligned with the team's capacity
They don't give a clear perspective of how many accounts you need to include
You can have the best stack or craft a beautiful program, but what's the purpose of it if you don't have the capacity to launch and maintain it properly?
That's why I believe in goal decomposition and capacity-based ABM planning.
Instead of "Let's focus on Fortune 500" or "I can do only this with that budget", you start analyzing growth opportunities:
Where can you expand revenue?
Where can you accelerate revenue?
How many new logos from each Tier do you need?
That way, both sales and marketing become aligned on the revenue goals and programs.
3. Goal-decomposition and capacity-based planning.
You start with analyzing sales pipeline velocity and revenue metrics (ACV, win rate, sales cycle length) among the 3 tiers.
Next, you do a revenue analysis of the last 12 months between new logos, expansion, and renewals.
Based on the analysis, you start breaking down revenue goals among motions and accounts.
Here is an example.
Revenue target - $18mln.
Goal decomposition between different ABM motions:
New logos: $1mln
Expansion: $1mln
Pipeline acceleration: $1mln
Renewals: $15mln
* To have a realistic breakdown, you need already to have a holistic revenue report that covers this data. I'm sharing an example in this episode of Full-Funnel Live.
The next step is running new logos’ revenue goal decomposition through account tiers which I’ll cover below.
Drive pipeline THIS quarter with a full-funnel ABM programs.
If any of these challenges sound familiar:
You are aligned in theory with sales but don’t do anything in practice aside from receiving wish lists from sales and sharing with them your marketing plan. In reality, you work in silos and miss the revenue targets and are being pressured by your executives.
You understand that your marketing and sales playbook is broken (mqls, gated content) but despite many attempts you don’t know how to fix it
Your outbound, paid ads and organic pipeline drastically decreased while CAC increased mostly because most of your market is problem unaware and not buying.
You lack brand awareness among target accounts and sales can’t get even a reply.
You clearly see that you're already behind your revenue targets
We can help.
We'll develop a custom full-funnel ABM strategy aligned with your resources, budget and stack and execute it together to drive results THIS quarter.
New logos’ program planning: $1mln target
Tier 1 revenue metrics:
ACV - 100k,
win rate - 30%,
sales cycle length - 180 days.
Account Planning:
10 SQOs - 40 contacts - 3 new logos = 300k in revenue
Tier 2 revenue metrics:
ACV - 50k,
win rate 50%,
sales cycle length - 120 days.
Account Planning:
20 SQOs - 60 contacts - 10 new logos = 500k in revenue.
Tier 3 revenue metrics:
ACV - 25k,
win rate 40%,
sales cycle length - 90 days.
Account Planning:
20 SQOs - 40 contacts - 8 new logos = 200k in revenue.
The same breakdown you need to run for expansion, pipeline acceleration, and renewals motions.
Based on that analysis and your team's capacity, you can re-allocate # of SQOs you expect in each of the tiers or re-allocate revenue goals among motions.
The final step is to establish a budget for each account in each tier.
You can do this by taking a bottom-up approach and setting a budget per account for each tier, or by allocating your budget among tiers and then setting a budget per account.
Below I'll share a few examples.
*If you want to see a live example of ABM planning, check our Full-Funnel ABM course where we’ll guide you through the process.
Budgeting and forecasting ABM
To budget ABM, you need to flip the funnel.
1. Define 3 tiers by revenue potential per account from the tier.
2. Define the budget you’re willing to spend to generate an opportunity with accounts from each tier.
Example.
Cost per opportunity:
Tier 1: $3.500
Tier 2: $1000
Tier 3: $300
3. Define how many accounts you can put in each of the tiers.
4. Calculate the budget and define appropriate ABM programs.
Why does this ABM planning and budgeting approach work better?
This approach requires running adequate account research to select the accounts that are likely to convert into sales opportunities with a timeframe equal to your sales cycle length.
At the same time, it's based on your team's capacity and real data.
You’ll avoid marketing to a wish list and will be able to make more realistic forecasts and customized ABM programs.
Having more budget for air cover and increasing # of outbound touches is not a panacea to revenue gaps.
On the contrary, this is the fastest solution to burn out and demotivate the GTM team.
Thorough revenue analysis and breakdown among different revenue programs, and then account and program planning is what help GTM teams see the light at the end of the tunnel and understand that they can hit their targets.
Account-based goal setting flips the funnel and starts with analyzing revenue metrics, sales pipeline velocity, and proper planning and answering questions:
How can we distribute revenue targets among new logos, existing pipeline, and existing customers to prevent churn and expand the business?
For the new logos, what's our distribution of revenue between Tier 1, Tier 2 and Tier 3 accounts?
What are our win rates among tiers, ACV, and sales cycle length?
How many sales opportunities do we need to generate with different tiers?
What is (or might be) our account-to-opportunity conversion? How many accounts should we have in our programs?
How can we regularly identify these best-fit accounts?
What programs should we run to drive awareness and generate demand from these accounts?
When the GTM team has clear answers to the questions above, not only do they start seeing revenue targets more realistic, but their focus switches to planning quality marketing and sales programs.