Is ABM the Right Fit for Your Business? Use Growth's Own Validation Equation
by Growth Marketing Firm, on Sep 25, 2023 9:35:32 PM
In the world of B2B marketing and growth operations, Account-Based Marketing (ABM) emerges as a solid strategy to catalyze significant growth. Here at Growth, we ensure that ABM aligns seamlessly with your growthops strategy. Is ABM the right fit for your business? Explore an actionable approach to making this strategic decision using Growth's own internal validation equation.
4R > C = 🟢(green light - let's go!)
4R < C = 🔴 (red light - seek help)
Deciphering the ABM Puzzle with Growth's Equation
Understanding the compatibility of ABM with your growth operations is vital for steering your business toward sustainable expansion. Growth presents an equation that we use internally to assess the financial and strategic viability of incorporating an ABM strategy into your growthops plan, and to decide whether to recommend ABM as a solution to our clients.
The Critical Variables
Before diving into Growth’s equation, grasp these essential variables:
- U = Average first-year value of a customer
- CR = Your Current Average close rate for a qualified customer
- ER = Engagement rate for ABM contacts
- C = Cost of implementing ABM for one year
- N = Number of contacts one salesperson can reach per quarter
- R = Prospective revenue
For first-timers use these low-estimate critical variables. You need HubSpot Sales software.
- U = $20,000
- CR = 10%
- ER = 5%
- C = $200,000
- N = 1,000
- R = 4x Growth Equation
The ABM Viability Equation by Growth
The equation to assess the prospective revenue (R) per quarter from ABM in your growth operations:
We recommend companies have two active participants or sales seats in the ABM program to ensure robust collaboration and iteration opportunities, enhancing the overall effectiveness of the ABM strategy.
4R=4 x [2(N)×ER×CR×U]
Compare the yearly revenue 4R with the annual cost C. If 4R > C, then ABM is a financially and strategically prudent choice for your growthops.
A Practical Example
- U = $20,000
- CR = 10% or 0.1
- ER = 5% or 0.05
- C = $200,000
- N = 1000
R = 2(1000) × 0.05 × 0.1 × 20,000
R = $200,000
Since 4R ($800,000) > C ($200,000) ABM aligns as a profitable strategy in this growth operations scenario, using Growth’s internal validation equation.
Make an Informed Decision with Growth’s Equation
Growth's ABM Viability Equation provides sales, marketing, and growthops leaders with a fundamental framework to assess the potential impact of integrating ABM into their business and growth operations strategy. Tailor the variables to your business metrics and make an informed, data-driven decision on whether to embark on the ABM journey within your growth operations using Growth’s trusted internal equation. Your path to sustained growth and profitability is paved with strategic choices – ensure ABM is the right one for your business and growthops!