Long before Lars Nilsson transformed Cloudera’s sales strategy with an account-based approach, he worked as a sales rep for Xerox.
It was his first job out of college, and he was tasked with selling copiers — the pinnacle of office technology at the time. He was given a compensation plan, a gas card and a territory of accounts — the beach cities of Los Angeles (Manhattan, Redondo and Hermosa beaches). Magazine and newspaper ads brought in leads, but it was on him to figure out how to get a foot in the door with the largest companies and sell to them.
“A badge of courage back in the day was how many times you re-soled your shoes in a year.”
Back then, that meant thumbing through yellow pages, plotting his target accounts for the week and then hoofing it up and down the Pacific Coast Highway, convincing office managers to let him visit the copy room.
“I was going through soles of shoes,” said Nilsson, who is the VP of global sales development at Snowflake. “A badge of courage back in the day was how many times you re-soled your shoes in a year, because that meant you were walking your territory.”
He didn’t know it then, but that experience was his first foray into account-based sales — a strategy he helped to pioneer at Cloudera, and one that has taken sales by storm in recent years.
Tips for Adopting an Account-based Sales Approach
- Define and identify the target addressable market for each sales rep. This can be divided up based on territory, named accounts or industry verticals.
- Identify the customers you are most likely to close. Focus on five to 10 accounts at a time.
- Create a personalized, multi-touch content strategy that engages each stakeholder on an account. Tools like Feedly, Vidyard and LinkedIn Sales Navigator can help sales reps build their own outreach campaigns.
- Marketers and salespeople should collaborate to create campaigns that attract target accounts.
- Have each sales rep build their account plan and defend it in a quarterly 1:1 meeting. This helps to track the growth and adoption of the account-based sales strategy.
What Is Account-Based Sales?
At its core, account-based sales involves targeting high-value customers and devising deliberate strategies for getting their attention and generating traction, with the end goal of selling to them.
That was what Nilsson had done with his Xerox territory, and it’s an approach that has been around for most of modern B2B sales history, he said. What’s changed, however, is the rise of sales and marketing technology.
“Technology has come in and replaced a lot of the human, error-prone practices of prospecting and marketing.”
Thanks to CRMs, sales engagement tools like Outreach and marketing tech like Marketo, companies have more information than ever before about their prospects. That information can tell reps who’s interested in the product, what marketing resonates with them and which stakeholders reps need to gain traction with.
“Technology has come in and replaced a lot of the human, error-prone practices of prospecting and marketing,” Nilsson said.
Nilsson discovered the impact those tools could have on his SDR team’s results at his previous company, Cloudera. He found that 80 percent of the inbound leads marketing attracted were not in Cloudera’s target addressable market.
Rather than have his SDRs waste time following up on non-target inbound leads, he had them create customized outreach campaigns for the target companies that marketing wasn’t bringing in. He called it account-based sales development after Jon Miller’s account-based marketing strategy.
Similar to account-based marketing, the approach is all about identifying the companies in a target addressable market the company has the highest likelihood of closing, and then creating a personalized, multi-touch campaign to close them. The difference is that sales development reps, rather than marketers, are responsible for creating the outreach effort.
The strategy ended up playing an integral role in helping Cloudera become a unicorn.
“This was a revolutionary thing that helped me realize how big this could be and how I could scale it quickly,” Nilsson said.
Setting Up an Account-Based Sales Approach
The key to success in account-based sales is focus.
As software sales has grown more competitive, companies can’t rely on the usual spray-and-pray approach to attract the biggest enterprises.
In fact, marketing and sales research firm TOPO found that the biggest barrier that prevents reps from reaching quota is time management. In many cases, they’re focused on the wrong accounts, or giving equal love to all accounts and not getting anywhere.
Account-based sales solves for that, since reps are focused on the customers with the highest likelihood to close, said Jamie Shanks, who is a managing partner at Sales for Life and author of the account-based sales book, SPEAR Selling. In his book, Shanks outlines a five-step SPEAR process for ABS: Select and prioritize, plan, engage, activate and reprioritize.
The first step in an account-based sales approach is to identify the target addressable market for each sales rep. This could be based on geography, industry vertical or even a list of named accounts, Shanks said. Each seller should operate like a CEO of their market, responsible for determining which companies to sell to, and why.
“I can’t assume I’m going to target an account because it has a sexy logo or big market cap that’ll bring in lots of revenue.”
There are four signals that a customer gives off that can help a rep determine account interest, Shanks said:
- Consuming content on the your company’s website.
- Showing interest in the product through free trials or search history.
- The seller has an existing relationship with a stakeholder or advocate within the company, most commonly through social selling techniques.
- Employees at the company who are already familiar with the product from using it at a past employer.
These four signals, which can all be tracked via marketing tech and on social media, are good signs that the company will be interested in purchasing the product. A company would be disqualified if they aren’t showing interest or if a competitor has a foothold within the firm, whether that’s a previous employee from a competitor working there or known advocates for competitors on staff, Shanks said.
“I can’t assume I’m going to target an account because it has a sexy logo or big market cap that’ll bring in lots of revenue,” Shanks said. “I am going to objectively pick accounts from that basket that I have an asymmetrical competitive advantage in or where I see a compelling event.”
That information will help a rep whittle down their list to five to 10 customers they’ll focus on for that sales cycle.
For this plan to work, however, it’s up to sales and marketing to work together on creating an outreach campaign.
Sales and Marketing Need to Work Together
Once a rep has their list of accounts, they need to figure out ways to attract and engage the buyers. The goal is to move the buyer along a path from, “Why should I change?” to “How should I change?” to “With whom should I change?”
In an ideal world, this is where marketing and sales exchange customer intel to create personalized content for the target accounts to move them along that journey. In reality, it’s not always that easy.
“They’ll start thinking about how they can start working more on content collaboration to tell stories that aim directly to these buyers.”
Demand generation marketers understand how to create content and attract customers on a macro scale, while sales reps understand what works best on an individual level. This can create a disconnect in strategy.
“Marketing’s objective is to get a meeting, but they’re not responsible for the outcome of those meetings,” Shanks said. “So marketing throws dead wood over the fence and sales thinks most of the things marketing sends over is garbage.”
Align Sales and Marketing Under Revenue
Still, it is possible for the two teams to work together. It’s all a matter of shifting perspective to revenue, Shanks said. He suggests sales leaders work with marketing to figure out how much quota each is responsible for generating. This alters the dynamic so that marketing sees its work as a support function for sales, Shanks said.
Shanks also runs a workshop for companies in which he places a buyer persona on the board and has both teams list what they think her biggest concerns, pitfalls and challenges are at work.
“Now marketing can realize that it’s not creating content that’s talking to the buyer,” Shanks said. “They’ll start thinking about how they can start working more on content collaboration to tell stories that aim directly to these buyers.”
In an account-based sales approach, marketing should provide the air cover with personalized ads and content to attract customer attention, while sales tries to engage them with custom outreach.
Form Specialized Teams to Work on Target Accounts
At Snowflake, Nilsson’s current company, sales works with the designated account-based marketing team on target accounts in “tiger teams” — cross-functional groups tasked with solving one particular problem. Each tiger team focuses on closing the same accounts. Within the teams, sales and marketing share as much information as possible about the accounts and create a carefully orchestrated outreach plan.
Marketing will start by warming the customer up through targeted ads and content that puts Snowflake on their radar. If they click on it, they’ll be taken to a part of the website that is customized to them. A couple of weeks later, the SDR covering the account will begin an outreach sequence.
The delay is critical. A premature email or cold call can end up adding noise to the marketing effort and dilute its message, Nilsson said.
Once the customer opens the outreach, then the sales rep has a window to set up a meeting.
“Everyone has their role,” Nilsson said. “It’s like a very orchestrated play that you run and you document it.”
Digital Selling Tools Allow Reps to Create Their Own Content
For companies that aren’t as aligned, digital selling tools like Vidyard and LinkedIn Sales Navigator make it easier than ever for salespeople to create their own content. In addition, Feedly and Hootsuite allow reps to aggregate customer stories and share that information.
Whether or not a team is aligned on content, the key is to remember that the buying committee isn’t one person, Shanks said. If the company is selling an HR product, the rep should be focused on convincing stakeholders on the teams the HR leader most often works with and those who make the buying decisions. That could mean creating relevant content for the CMO and CFO along with the CHRO.
The advantages of an account-based approach is a shorter sales cycle and greater pipeline coverage, Shanks said.
More Accepted and Qualified Leads Indicate a Successful Account-Based Strategy
The easiest way to measure the success of an ABS approach is to reverse-engineer the outcome the company is trying to achieve. In most cases, that’s a bigger area of pipeline coverage for each sales rep.
If the sales rep is aiming the stories at the right people and engaging with their accounts, they should see a higher rate of sales-accepted leads and sales-qualified leads. This in turn leads to more accounts that a salesperson can close.
The most valuable leading indicator, however, is that the team is changing its behavior, Shanks said.
Every quarter, a rep should be building an account plan and engagement strategy. They should then be prepared to defend their decisions with objective data in a 1:1. As the quarters progress, the reps should grow in their ability to identify target customers and that should be reflected in more sales conversations and opportunities.
Ultimately, investing in an account-based sales strategy is integral to the success of any company looking to expand its enterprise accounts, Nilsson added.
“What I keep telling founders is that focus is your best friend in any stage of your company’s growth and maturity,” Nilsson said.