What is a Target Account List?
As digital marketing continues to evolve, the most successful B2B companies are putting more and more emphasis on targeting the right accounts. They don’t want to waste time and money reaching out to potential customers who have no interest in their product.
The answer for a growing number of B2B companies is account-based marketing. Instead of reaching out to as many potential customers as possible and hoping that a few of them might be interested, ABM is laser-focused on those that would be the best fit. It then prioritizes this list of prospects and puts together a personalized plan for each of them.
According to a survey of B2B companies conducted by LinkedIn, more than 80% of companies said they plan to boost their ABM budget over the next year. And well over half said it’s already an important part of their sales and marketing efforts.
The key ingredient of an ABM campaign is a target account list. What is a target account list? It’s the first step in implementing a successful target list marketing strategy – very simply, it’s a rundown of all of the accounts that you’ll be targeting.
How to Create a Target Account List
Target account list creation isn’t always easy. More than a third of marketing teams say it’s one of the biggest challenges in running an ABM campaign. But the effort pays off in the end. About 87% of marketers say that ABM delivers a higher ROI than other types of marketing campaigns.
An ABM campaign takes a “flipped funnel” approach, meaning that it’s limited to a smaller number of prospects. Because of that, selecting and prioritizing your target accounts is the most important part of the process.
How do you narrow down your list of prospects? Your target account list should be based on your ideal customer profile — the description of the type of customer that would most likely take advantage of your product. Since your sales team can’t follow up on every lead, you should use your ICP to decide which leads are the right fit for your company.
ICPs are extremely useful to any team that’s new to account-based marketing. Along with targeting accounts that are a good fit for your company, they also help you define the problem you’re solving for, align your product with the needs of your customers, and create a roadmap for future sales. And by using this approach, you are naturally aligning your product, marketing, and sales teams to the same operating framework.
Although some people use them interchangeably, an ideal customer profile (the type of company that you are targeting) is not the same as a user persona (the specific person or the type of person within that company you are hoping to reach). Both are useful, but the ICP is what you need to develop for account-based marketing.
How to Create an Ideal Customer Profile
To create an ICP, the first step should be to compile a complete list of your current customers. Start to narrow that list down to include just the customers who have gotten the most out of your product. A good place to start is with the customers who have signed the biggest contracts, as well as those who have increased the size of their contracts since the initial sale. Customers who have made the most referrals may also be good candidates. If you’re a SaaS company, include customers who are your most active users.
Once you have a list of your best current customers, begin looking for commonalities. Here are a few characteristics to keep an eye out for:
- Industry or vertical: Are most of your customers within particular industries?
- Geography: Are they clustered in the same region, country, or continent?
- Company size: Do they have similar annual budgets or revenues?
- Number of employees: Do they have roughly the same sized workforce?
- Customer base: What type of customers use their products (e.g., customers in particular industries, or of a certain size)?
- Company maturity: How many years have they been around?
- Company status: Are they for-profit or not-for-profit? Public or private?
Once you have compiled this information, you can start to define your ICP. Every ICP looks different, but this general format is a good starting point:
“Our ideal client is a North America-based SaaS company with a recurring revenue model. It’s in growth stage, and has a customer base mostly made up of small- and medium-sized businesses.”
There are a lot of templates that can help you put together an ICP, but there’s no reason you can’t create one on your own. Once you have an ICP that your team agrees on, you can start to populate your target account list with specific companies.
How to Identify and Build Your Target Account List
Before your sales and marketing teams begin working together on the list of accounts you want to target, take some time to talk about goals. Are you simply looking to expand your customer base, or is it something more specific? Maybe you want to acquire a couple of impressive logos to use in your promotional materials, or perhaps reactivate accounts that moved on to other companies. Agree on the goal, and then use that as input to determine which accounts to target.
The better your list, the higher your conversion rate. Be sure you take advantage of both firmographic and technographic data. Firmographic data is information that can be used to categorize a company, such as industry, location, number of clients, or annual revenue. It’s used to segment companies into categories that make sense for your purposes. Technographic data is the technology that a company uses on a day-to-day basis. You can use both types of data to figure out if a company aligns with your ICP. Both firmographic and technographic data are publicly available via tools that can gather this information for you.
Note that as you gather this firmographic and technographic data, it may not be completely up to date; therefore you should also collect information on in-market buyers. This real-time data lets you know which companies are already in the market for your product or service
If possible, your target account list should be made up of prospects that have already demonstrated some amount of interest in your company (such as they have visited your website, downloaded your content, or registered for your events).
Apply Your ICP to the Target Account List
Once you have gathered a master list of target accounts, it’s time to start winnowing it down. Apply your ICP to the accounts, looking for the attributes that your best customers have in common. Loading the master list into your CRM makes filtering much easier.
It’s not always obvious which of these target accounts would be the best fit. For example, one that’s in the right industry might have a smaller annual recurring revenue than most of your current customers. That might not knock it out of the running, but it does make it a lower priority.
Create a Tiered List of Companies for Target Account Selling
You’re unlikely to be able to reach out to all the prospects on your list, so it’s time to prioritize them. The point is to be able to focus your team’s energy on those that are most likely to convert to sales. A three-tiered system works best for most companies.
- Tier 1: These accounts are a perfect fit for your company. In most respects, they will be very similar to your best current customers.
- Tier 2: These accounts fit most of the criteria you’ve put together. They resemble your current customers, but might have one or two differences.
- Tier 3: Probably the largest of the three tiers, these accounts are more of a long shot. They are worth pursuing, but not worth investing too much time and effort.
Here are some examples of recommended calculations based on sample GTM strategies by using 3 key data points:
|GTM MODEL||EXAMPLE||RECOMMENDED CALCULATIONS|
||Total Target Accounts: 500
Tier 1: 60 Accounts
Tier 2: 100 Accounts
Tier 3: 240 Accounts
||Total Target Accounts: 1500
Tier 1: 240 Accounts
Tier 2: 300 Accounts
Tier 3: 960 Accounts
||Total Target Accounts: 3500
Tier 1: 1000 Accounts
Tier 2: 700 Accounts
Tier 3: 184 Accounts
Align Your Team with the Target Account List
While you’re putting together your target account list, make sure to hold regular sales and marketing alignment meetings to make sure everyone is on the same page in terms of target account selling strategies. If this is your company’s first time with an ABM campaign, it’s worth taking the time to define the terms you’re using; different teams within the same company will often use different terminology to mean the same thing.
Once you have broken down your list into tiers, it’s time for the sales team to start target account selling. Check in frequently to make sure that the list you’ve put together is feasible for them to address (for instance, that the list isn’t too long and takes too much time for them to do their outreach); it’s easier to make adjustments early on in the process.
Measuring the Success of Your Target Account List
These key metrics are perhaps the best indicators of the overall success of your ABM campaign.
- Engagement. Since your team is reaching out to accounts with highly personalized content, there should be a measurable increase in engagement. If not, you should reconsider whether the content that you are sending out aligns with the pain points that your customers are trying to solve.
- Contract value. Most companies see a significantly higher ROI when they switch to ABM. As your team begins to close deals from these efforts, look for a rise in your average contract value. If there’s no increase, take another look at the firmographic and technographic data you used, making sure the target accounts are the best fit for your company.
- Sales cycle. Many companies experience a shorter sales cycle with ABM, but if yours is longer at first, you shouldn’t be surprised. This is a highly personalized process that can take time. Track the sales cycle over time, and you should start to see improvement.
Ongoing Target Account List Management
Be sure to revisit your target account list and tiering model on a quarterly basis to adapt to changes in your staffing, incorporate learnings, and revise your criteria. Don’t refresh more than 20% of your target account list per quarter to allow time for accounts to engage with and respond to your outreach.
Use the Target Account List Calculator
Want to try it for yourself? Using a few key data points, our targeted account list calculator lets you determine your total accounts as well as the number of accounts you should have per tier.