What is an ABM Funnel and How to Create a Perfect ABM Funnel?

You know what a traditional sales funnel looks like. It’s wide at the top and narrow at the bottom. 

Put differently, the percentage of leads coming out of the sales funnel as customers is far lower than the percentage of leads entering it. 

This type of pipeline leakage is, however, nothing new. 

Back in May 2015, Sangram Vajre, a world-renowned ABM expert and author of the first-ever book on ABM (Account-Based Marketing for Dummies), couldn’t believe the data in the Forrester research: Of the leads marketing was generating, less than 1% was converting into customers. This was a costly problem, both in terms of money and effort, but nobody seemed to have a solution yet. 

That’s when Sangram, who was leading the marketing for Terminus at the time, came up with the idea of flipping the funnel on lead-based marketing and sales. This was the start of the #FlipMyFunnel movement. 

Here’s Sangram briefly explaining the concept in 240p resolution 🤌

Fast forward to 2023, and ABM is delivering 208% growth in marketing revenue to companies with aligned ABM strategies. 

With the context laid out, let’s now unpack the nuts and bolts of the ABM funnel to help you get started. 

What Is an ABM Funnel?

An ABM funnel, also known as the “flipped sales funnel”, depicts the process a business uses to attract, engage, and convert its best-fit accounts into paying customers. Instead of attracting a list of unqualified leads, the focus of the ABM funnel is aligning sales and marketing teams to identify high-value accounts, accelerate the sales cycle, and drive revenue. 

You can also visualize the ABM funnel as a traditional sales funnel, but inverted. 

As the common analogy goes: While the traditional sales funnel casts a wide net in the sea, the ABM funnel uses a spear to fish. To sum up the differences in a snapshot, the ABM funnel and the traditional sales funnel differ in the following ways. 

How to Set up Your ABM Funnel?

With ABM, there is no singular, one-size-fits-all approach to driving revenue. Your ABM funnel will be directly influenced by factors like business model, product complexity, average deal size, buying committee, competition, and other market variables.

We’re also making three assumptions about your company here:

• You’ve secured the executive buy-in and alignment on ABM goals and resources across the organization. 
• You’ve laid out a solid framework for ‘Smarketing’ in your organization. It is a business strategy wherein sales and marketing teams work together to achieve common revenue goals.
• You’ve already run a pilot program and successfully tested whether or not ABM works for your business. 

If the above three conditions aren’t met, sorry to say, you’re not ready for a full-fledged ABM process just yet. As Jess Larkin, Senior Strategic Marketing Manager for Financial Services at Confluent shared on the Let’s Talk ABM podcast: 

“You’ve got to lay the foundation for ABM,” she says.

“The alignment across marketing, sales, and marketing operations, it’s so crucial. It's also essential to have time to build, pilot, and then scale.
The whole crawl, walk, and run thing, it's very, very real when it comes to building a [ABM] motion like this. And I think also understanding that enablement and education are really key.” 

But if you’ve ticked off all three conditions, here's how you can get on the ABM train step by step.

Let’s first begin with the ABM funnel, or the “flipped sales funnel”, and its five common stages. 

1. Identify: In the first stage, sales and marketing work as a unified team to single out high-value accounts. Each target account should meet your ideal customer profile (ICP).
2. Expand: Now, using the list of target accounts/ideal customer profiles, start gathering more information about the key decision-makers and pain points of your target audience.
3. Engage: Once the initial research is done, it’s time to connect and engage with the target prospects using hyper-personalized, relevant content.
4. Advocate: The job isn’t over with the conversion of contacts. In this stage, the focus shifts to nurturing strong relationships with customers and turning them into advocates for your B2B business.
5. Measure: Finally, measure and evaluate the impact of your account-based marketing strategy. Track the key metrics in relation to your business goals and optimize the funnel accordingly.

Fair warning: As mentioned above, ABM funnel stages are unique to every company. The ABM funnel we’re sharing here is adapted from the one conceptualized by Sangram Vajre (Refer to the image shown in the section above).

We’ve covered the ABM funnel stages briefly, and the prerequisites for starting your first ABM process in-house. 

Now let’s walk you through the setting up process for the ABM funnel. 

1. Account Selection

Marketing and Sales Come Together to Prepare a List of Target Accounts.

To get the ball rolling, start by creating a list of your dream accounts. This is where marketing and sales must form ONE team to create the list of target accounts and contacts. 

Your list should (ideally) contain the high-value accounts your sales team has been eyeing.

You can also use a common ABM practice called the F.I.R.E. methodology to find best-fit accounts. It stands for Fit, Intent, Relationships, and Engagement. Sales and marketing teams can use these four factors to qualify and prioritize accounts ripe for a sales talk. 

‍Debbie Chew, Global SEO Manager & ABM expert at Dialpad, uses the following method when identifying high-value accounts to target:

“I start ABM funnel-building by identifying key players across tenured accounts showing signals of need."

"Our SDRs tap business intelligence tools to reveal titles like "Director of Communications" or "Head of Mobile Engineering" exhibiting research behavior or tech stack changes. We separate these key players between "Discover" folks unaware of solutions, "Explore" researchers, "Validate" technical evaluators, and "Scale" decision-makers.”

Pro Tip ✅ It’s all too common to confuse the account selection process with account acquisition. But it’s not the only case. If your company has a large, loyal customer base and new products/services to offer, use the opportunity to upsell/cross-sell and benefit from immediate revenue. 

2. Account Tiering

Use a Prioritization Framework to Segment the List of Target Accounts 

In the next step, we’re looking at the potential for long-term relationships. Even if the original list contains 100 high-value accounts, you want to handpick the top 20 or 30 accounts with the highest revenue potential.

This is where ABM teams should follow a prioritization framework and allocate resources based on the said potential.

“Segmentation is now the key to creating the ideal ABM funnel,” explains James Smith, Founder of Travel-Lingual.

“We’ve found that segmentation works best when industry pain points or common issues group prospects. Knowing these common pain points allows us to tailor content and approach our engagements more personalized. It’s all about finding the right tone of voice.”

To understand the amount of resources and marketing and sales efforts to dedicate to specific accounts, simply use ITSMA’s framework. It classifies the ABM strategy into three tiers based on priority. 

To simplify the framework further: 

• Tier 1: Accounts with strategic value — accounts you want as logos.
• Tier 2: High-value accounts but with lower lifetime value compared to tier 1 accounts.
• Tier 3: Accounts that match only 90% of your ICP criteria.
  

One of the best examples of 1:many ABM campaigns? DocuSign’s display Ad campaign which targeted 450+ enterprise accounts with custom Ads and content to boost website traffic and conversions. With their ABM campaign, they improved page views by 300% and got a 22% increase in pipeline generation.

Pro Tip ✅ Having the right ABM process isn’t enough to bag business. In the same podcast cited earlier, Jess Larkin also talked about the importance of having a ‘champion’ in the buying committee.

“I don't think it's solely enough to rely on intent data or interesting moments to craft your next move, it's also essential to develop a champion at that account when possible”

3. Planning & Communication

Sales, Marketing, and Operations Collectively Gather Insights About Key Accounts

Who are the right people to target in a specific account? How to warm up the said people? What are the assets they’ll best engage with? What will be the correct messaging to use?

The kind of insights you need will be directly mapped to the tier of ABM you’re executing and the accounts you’re targeting. But one thing is clear: collective insights from sales and marketing teams are essential.

After all, data and insights are truly the backbone of ABM.

When mining data on key accounts, don’t hesitate to get help from external vendors and technology partners. Make tools your best friends. Just as Mladen Maksić, founder and CEO of Play Media, has.

“In our approach to ABM, we've tailored the sales funnel to fit our specific SaaS market. It starts with 'Identify,' where we use tools like LinkedIn Sales Navigator and Clearbit for pinpointing high-fit accounts based on size, industry, and tech usage. Then, in the 'Engage' phase, we focus on personalized content, leveraging Marketo for targeted email campaigns.

The 'Convert' stage is about tailored demos and solution discussions, often facilitated by ZoomInfo insights. Finally, 'Measure' involves tracking metrics like engagement depth, conversion rates, and average deal size in Salesforce. This granular approach to ABM ensures we're not just casting a wide net but fishing where we know the big catches are!”

Pro Tip ✅ Do granular research on every individual in the buying committee, which often comprises 6-8 members. This is a vital step if you’re doing 1:1 research. You can cater to each individual with personalized content and improve your chances of a win. 

4. Execute & Engage

Use the Insights to Engage Accounts with Tailored Content and Experiences.

With the target and strategy done, it’s time to bring out the VIP treatment. You can start engaging contacts across priority accounts using personalized content and communication. 

According to Terminus, every ABM campaign you deliver to accounts should take them through the following six stages of engagement. 

There’s only one challenge: How do you personalize communication for different stakeholders in the same account? One proven tactic is sharing interactive product demos in your email communications. They can improve the response rate by over 2.5x. Storylane’s demo creation platform makes building and customizing product demos for different personas a 10-minute task.

With each marketing asset, you also want to show up as a supporter, and not just another vendor on the scene. The key to engaging and converting accounts is being a problem solver and not a solution seller.

All the while, keep tracking the engagement data. It’s going to

• help you keep tabs on how warm or cool a given opportunity is based on the level of engagement;
• identify the right opportunity to coordinate with sales for a personalized sales outreach.

This is also important because, as Peter Mollins, CMO of SetSail, explains: 

“Too often, mid-stage buyers sour on a purchase because of the cost and complexity of moving forward. And post-sale customers fail to renew or even to launch because they can't get internal teams to unite behind adoption. Marketing can play a vital role here by helping to nurture buying and user committees throughout the process. The result: unstuck deals and enthusiastic customers.” 

Pro Tip ✅ How to create and market content tailored to the account activity? Debbie shares the process they follow at Dialpad. 

“We tailor content based on how the contacts are grouped in the buying phase, and answer their open questions to guide them to the next level,” she says. 

“For example, ‘Discover’ players need educational collateral explaining common pain points. ‘Explore’ contacts want evidence of ROI from analyst reports. For ‘Validate’ roles, we share detailed feature guides, free trials, and demos. And for ‘Scale’ executives, success stories with hard numbers seal their approval. This funnel framework lets us distribute the right asset at the right time to progress deals.” 

5. Measure & Optimize

Use Metrics to Check the Level of Success of Your Tactics 

It can take months before you start seeing concrete results from ABM.

When building the ABM funnel, therefore, focus on building a continuous framework to track, measure, and optimize the account-specific actions for maximum impact. This also means choosing the right metrics can be a menace.

The easy way out? Go granular and decide on metrics for every stage of the funnel.

“We set different goals and track/measure different metrics depending on the funnel stage, starting from top to bottom,”

shares Michael Maximoff, Co-Founder and Managing Partner, Belkins. 

“At the top of our ABM funnel, we look at engagement and reach metrics, tracking our content output, views, clicks, CTR rates, and overall engagement and reach of our efforts. In terms of middle-of-the-funnel metrics, we primarily track our sales performance, the number of booked calls, responses, email conversations, and connections. At the bottom of our ABM funnel, it all comes down to tracking the quality and conversion of our ABM efforts.”

Pro Tip ✅ You want to measure the results you’re getting from all the engagement you’re building. So initially, stick to reporting on account engagement data. For example, engagement rate, This will help you

• Earn respect and credibility from sales
• Prove ROI to the executives
• Stay consistent and proactive with the ABM efforts
  

3 ABM Funnel Metrics to Track

Here are three standard metrics every ABM team should be tracking at the top, middle, and bottom of the funnel. 

1. Number of Target Accounts 

Target accounts, as explained earlier, are companies that fit your ICP and have been identified as high priority as they’re likely to become a customer if targeted. 

2. Engaged Accounts 

This tells you the number of accounts in your target list that are clicking on your Ads, opening your emails, and interacting with your marketing content or brand. 

Engaged Accounts = # of contacts engaged per account/Target Account List

3. Sales Velocity

Sales velocity is the average number of days an account takes to become a customer. The number of days is counted from the day the opportunity was first created.

Parting Thoughts

Building and executing a successful ABM funnel takes time, education, resources, team alignment, and most importantly, patience. But the payoff is worth the sweat.

As our sales leader, Harsh Mishra puts it:

“ABM has a ripple effect. When you follow an ABM strategy, you have a higher chance of closing the high-value accounts you’re targeting.
These high-value accounts then drive a signal in the market that a lot of great companies are working with you. And the other companies that you would’ve normally targeted come to you without doing anything. That’s why even though ABM takes a lot of budget, effort, and bandwidth, it’s worth the time.
It has a direct ROI, which is getting those high-value accounts as well as an indirect ROI because of the social proof you end up creating.”

Q1. Why is ABM the best choice?

Account-based marketing (ABM) as a strategy is hyper-focused on targeting, engaging, and closing high-value accounts, which can boost pipeline velocity, average deal size, lower efforts, and maximize revenue performance as compared to the lead-focused model of traditional marketing. 

Q2. What are the three types of ABM?

There are three different types of ABM depending on the investment and ROI incurred from one account: Strategic ABM, ABM Lite, and Programmatic ABM. Where strategic ABM focuses on one-to-one, ABM Lite on one-to-few, and Programmatic on one-to-many approach to marketing.

Q3. How do you structure an ABM team?

The ideal ABM team will have the values of alignment, cross-functionality, accountability, and transparency. That’s why an ABM team needs alignment and cooperation between stakeholders (CEO, CMO, or CRO), product marketing, sales, content creators, demand gen specialists, and customer success roles to thrive.