Clothing retail startup “Sunny Co Clothing,” founded by two college seniors at the University of Arizona, figured creating a swimsuit giveaway would be the best way to get the word out there about their new brand.
By reposting their photo with a specific hashtag, social media users would be entitled to a “free” swimsuit in exchange for their post — in addition to the company donating $1 to the Alzheimer’s Foundation for each one.
Overnight, their Instagram following jumped from 7,000 to 784,000. More than 346,000 people took up their offer, forcing them to cap the promotion at 50,000 units.
Let’s do the math: 50,000 units x $12 = $600,000.
No, that’s not a typo. The campaign grossed over $600,000 in 24 hours.
It was so unexpectedly popular they had to issue almost $73,000 in refunds because they couldn’t meet demand.
This spawned a slewofarticles calling the campaign a failure. One writer even thought that it belonged in the same category as the infamous Fyre Festival.
But if these publications had just paused to think, they might’ve realized they were missing the big picture.
Inventory issues aside, the real story was that two college students generated more revenue in one day than many businesses do in a year. And they did it with effectively $0 in ad spend.
They’re not losing any money — they’re making it
Of the thousands of people posting all over the internet about this matter — the majority of them failed to give the site a visit and realize you still had to pay handling charges, although the item itself is technically “free.” While this is certainly a gray area of marketing ethics, it’s nothing new.
The folks over at Loretti Watches have been running their entire business on this model for over a year. Pay a small shipping and handling fee, and get the product for “free.” In fact, many of the top clients we produce scroll-stopping creative and strategy for at VAXA Digital follow this same business model.
What most consumers don’t realize is that these products are manufactured so cheap they can be produced and shipped for less than the shipping “cost” they’re charged. This is especially true in the clothing industry, where items (such as bathing suits) can be easily manufactured overseas for nothing more than a few dollars. This absurdly high margin is then used to cover advertising, overhead, and wasted product at the end of a season/trend.
In this specific example, Sunny Co Clothing charged their customers a $13 shipping fee after applying their promo code to reduce their $70 bathing suit down to $0. From a marketing psychology perspective, the consumer feels as if they’ve gotten such a discount that this nominal charge is normal and worth it.
From that amount, subtract $5 to manufacturer and fulfill the item, $6 to actually ship it, $1 for the Alzheimer’s donation, and they’re left with $1–2 of net profit for every suit sold — which brings me to my next point: how many did they actually sell?
Truth is, there’s a lot to learn from their campaign, so let’s mine some nuggets of wisdom.
In this article, I’m going to break down key lessons you can apply to your own marketing strategies. Then, I’ll provide a template you can use to recreate their success.
Nothing Sunny Co did was revolutionary — it was simply well executed. And if you follow the principles they used, you too can become an overnight sensation.
How Much Was Profit?
First, let’s take a closer look at the numbers.
Unless you manufacture your own goods, the only way you can promise a swimsuit for $12 is by buying in bulk to keep costs low.
In light of this, it’s likely Sunny Co sourced their product from an overseas supplier.
I did a quick search on Alibaba and found a similar swimsuit that costs $6.10/unit (when ordering over 100).
Let’s assume they were able to negotiate down to $3/unit, given they ordered 50,000 pieces.
In 2017, you could ship a seven-ounce package across the U.S. for about $3 via USPS First Class.
Factor in $0.50 for packaging/branding and $0.70 for payment processing fees and that brings total costs to $7.20.
Estimated profit = $12 - $7.20 = $4.80/unit.
We know they ended up issuing roughly $73,000 in refunds. But assuming they could tell the future and adequately planned their supply chain, they would’ve raked in over $240,000 in profit in 24 hours.
Wow.
Why It Worked
Three key factors:
1.“Free” turns heads
Want to command attention?
Offer something for free.
Caveat: as we saw above, Sunny Co used the word “free” fairly liberally. In any other context, $12 shipping for a single swimsuit is outrageous.
Nevertheless, it’s likely many customers realized this and still wanted in, especially when compared alongside a $64.99 retail price.
The real takeaway here is that people love the idea of “free,” even if it’s merely framed as such.
2. Urgency sells
If “free” grabs the audience’s attention, limited time offers give them no choice but to respond.
Sunny Co took advantage of this by restricting their campaign to 24 hours, which persuaded their audience to jump on board right away.
There’s nothing worse than missing out on a chance to grab something for free because you waited too long to act.
3. Relevant content converts
This campaign went viral for a reason.
Points 1 and 2 are critical, but they would’ve fallen flat if the Instagram image wasn’t appealing to their audience.
That wasn’t an issue for the Sunny Co team, because they chose an image that: Looked like an Instagram post their target audience would typically make (not a spammy ad). Incorporated their target audience’s interests (warm weather and swimming pools). Used colors associated with excitement (ie. red).
These elements ensured their campaign got noticed.
Template: How to Make $600,000 in 24 Hours
Here’s how you can recreate Sunny Co’s success.
Step 1: Source a product on Alibaba.
Find a product you can: White label and rebrand. Charge the unit cost + shipping cost + desired profit as “shipping.”
To figure out the second part, first, determine your total costs.
For example, these blue light blocking glasses cost $1.80 per unit. You can ship them anywhere across the U.S. for roughly $3 via USPS First Class. That puts your total cost at $4.80.
Next, determine the maximum amount a customer would pay for shipping on the item.
If you sell the benefits properly (ie. blue light blocking glasses prevent headaches), I think you could persuade an audience to pay up to $8 for “shipping.”
That leaves you with $8-$4.80=$3.20 in profit.
Step 2: Order samples. Inspect for quality and reliability.
This step is a must and will save you from the terror of issuing mass refunds due to quality complaints down the road.
Pay attention to the supplier’s reviews regarding fulfillment times. Make sure they can handle large order volumes in a timely manner.
Step 3: Set up a Shopify store. Create an eye-catching image for social media.
As we discussed earlier, it’s important that your image doesn’t look like an ad and is relevant to your audience’s interests.
I strongly suggest including a human being in your image. After all, humans relate best to other humans. Step 4: Set up a time-limited repost campaign. Ask everyone you know to post about it, or buy shout-outs from large themed accounts.
Your campaign should look something like this:
“For the next X hours, everyone who reposts this image on Instagram and tags us in the post will get a free [product]. Must be following us to be eligible.”
Sunny Co ran their campaign for 24 hours. You can run yours for however long you want.
Just keep in mind: shorter campaigns create more urgency, which yields better results.
If you have an existing following or an active social circle you can leverage, you may be able to pull this off with $0 ad spend.
If not, DM themed accounts on Instagram and buy at least $500 worth of ads. Step 5: Go viral and profit.
There are a lot of variable components here, like how good your branding is, how appealing your product is, and how attractive your images are.
So it goes without saying your results will vary.
But as Sunny Co demonstrated, knowing your audience stacks the odds in your favor. Hit on all the right points with your branding and messaging and there’s no reason you can’t experience a similar level of success.
Understanding the Framework
At the end of the day, the key is understanding the power of the “free for a limited time” model.
In the brick and mortar days, companies used this method to get visitors to their store. Their goal was to get customers to also buy other items while they were there, which is how they made money.
In today’s global economy, however, it’s now possible to make money directly off the product you’re “giving away,” because many products can be sourced from overseas for pennies on the dollar.
The entire Internet just advertised for them — and still is
Most of us have heard the adage, “No publicity is bad publicity.” While there are some cases this certainly isn’t true (looking at you, United Airlines), that’s not the case with this situation.
Within 24 hours of starting the contest, thousands of major Instagram/Twitter influencers were posting about this — whether paid shout-outs or simply memes making fun of everyone else posting.
Before long, hundreds of major news accounts began covering the story, and hundreds of thousands of comments were being left about the giveaway — both good and bad. Regardless, this company was certainly now in the spotlight of both consumers and other massive brands (and maybe even the FTC), meaning ridiculous amounts of traffic were being sent their way.
Regarding the potential FTC attention, the one area Sunny Co Clothing poorly executed was delivering a clear and consistent set of terms and conditions for the contest, as some screenshots suggest they changed their terms multiple times during the giveaway process:
Take a look at Rule #3, stating “…we reserve the right to cap the promotion if deemed necessary.” Given this was not clearly stated at the beginning of the contest, this could certainly raise some questions from the feds, especially after the FTC’s recent announcement to crack down on unethical social media advertising practices.
Targeted demographic data and followers will be invaluable
Potential fines aside, it’s clear that the real win here for Sunny Co Clothing wasn’t in the relatively small amount of money they made, but rather the data they collected from a highly targeted niche of women interested in buying clothing online — specifically swimsuits.
Considering that the going rate in 2017 for targeted email lists is between $200–400 CPM (cost per mille, or thousand impressions), with even 50,000 email addresses collected they’re looking another $10,000 minimum for every business they sell those to. When dealing with large retail brands, such as Victoria’s Secret, this cost is something marketing teams are willing to pay at the drop of a hat.
Now, what about that massive Instagram following? While “shout outs” and influencer marketing promos have been around for a few years now, they’ve certainly become popular with massive brands more recently — raking in some massive cashflows for those in charge of these accounts.
Given that the going rate for an “influencer” page to create a post promoting someone else’s product or service is about $1 per 1,000 followers (based on my experience in the industry), the folks over at Sunny Co Clothing are looking at a minimum of $700 for EVERY single promoted post. Even if they only posted one a day, that could equate to over $250,000 a year.
Worst-case scenario, even if Sunny Co Clothing somehow goes under as a result of this stunt, there’s nothing stopping them from selling their Instagram account on the “black market” (given it’s against Instagram’s terms of service) for an outrageous amount of money. Knowing their engagement and number of active followers, they would easily be able to pull in anywhere from $30–50k for an account of that size.
In the end — was it a win?
While they’ve yet to stand the true test of time and begin fulfilling these orders, Sunny Co Clothing certainly has the potential to pull off a massive “W” as a result of this scenario. Even if they were to be hit with massive FTC fines and forced to close their “doors,” they’re set up now with a large number of cash-positive exit strategies resulting from their massive social media following.
The major takeaway here is that viral marketing and growth hacking social media is certainly not dead — you just need a bit of strategy and good luck. Even with major follower-building tools such as Instagress recently shut down, digital marketers are still left with plenty of opportunities to grow their brands’ followings.
With that said, don’t be surprised if you see a large number of strategy copycats popping up over the coming weeks, such as this towel company (who were smart enough to cap the number of giveaway items at least):
In the Wild Wild West of Instagram, it’s not surprising they even stole their photo:
As mentioned earlier, this marketing strategy is nothing new, and certainly presents opportunities for retailers with cheaply produced goods to creatively target new consumers. However, bear in mind that a good number of people will now realize that pair of “luxury” sunglasses you normally sell for $79 only costs you a few bucks to produce.
The term ‘woke-washing’ describes work that promises to improve the world but doesn’t take real action. Brands without a clear purpose who jump on the bandwagon are actually doing more damage than good.
Taking the luxury fashion sector as an example, we identified that personal relationships trigger positive commercial responses in consumers in four key ways:
Suicide is the third leading cause of death among young adults in the U.S., but it’s still a subject many brands shy away from. The Ad Council’s latest campaign aims to remove some of the stigma around the topic, urging teens and young adults to speak openly with friends who may be suffering in silence. An estimated 76% of young adults turn to a peer in a time of crisis for support, according to a survey conducted by the Jed Foundation. What’s more, research from the National Alliance of Mental Illness reveals: 50% of all lifetime cases of mental illness begin by age 14, and 75% start by age 24. Using these insights to inform their creative campaign targeting 16-24 year-olds, the teams saw an opportunity to break down some barriers surrounding the issue at a fundamental time when many are at risk. “It’s friends who are most likely to spot the signs that their friends are struggling with their mental health,” says Will Lowe, Creative Director at Droga5. “So we wanted to empower young people to reach out to those friends and help them talk about how they are feeling; something which is shown to really help.” This campaign proves the power that lies in uncovering an insight unique to your audience that can actually drive change. Not only does it give the brand a key purpose, it proves its deep understanding of its target audience and the challenges they face in everyday life.
Marketing- How to Turn Data into Insight in Five Simple Steps Today’s marketers have access to an endless stream of data sources, but being data-rich doesn’t mean you know what works. The skill lies in turning this wealth of granular data into compelling consumer insights – transforming hard numbers into a concept that will resonate. As previously outlined in our Smart Researcher’s Guide to Creating Consumer Insights, turning data into actionable insights is one of the most important skills for marketers today. Here’s how it’s done: 1. State a clear goal. Ask yourself what your campaign is ultimately trying to achieve. Knowing what you’re aiming for is the key to asking the right questions of the data. In 2014, WeAreSocial devised a student campaign with HSBC. With the clear aim of appealing to new students just starting university, this goal led the team to the data that held the answers they needed. The powerful campaign that inspired young people to build diverse connections at university was based on insights that revealed one of the biggest predictors of future success comes from the people you meet at university, not the degree you get. The campaign won two awards at the Warc Prize for Social Strategy 2016. 2. Prioritize your data. Which data sets are most pertinent to your goals? Focus on the most interesting numbers and rank the data by relevance to avoid distraction. Starting with the best ‘small’ data – or the more readily available information is often useful, such as sales figures, for example. This can then be enriched with additional behavioral, attitudinal and perceptions data. As Ben Sharma, PR Executive at Engage by Bell Pottinger says, “I get my audience starting with demographics to find out who they are. Then I work my way through finding anything that’s insightful. The main one I rely on is their interests and attitudes – so if they’re massively over-indexing for something, that gives us a really good idea of what direction to take.” 3. Make it real. Hard numbers can leave people cold. To truly understand data and make it meaningful for your creative team, it needs to be brought to life. Context is what matters here – A standalone figure highlighting the number of people using ad-blockers on their devices today is often meaningless without figures relating to previous months or years, illustrating how this market is changing and where the opportunities might lie. In short, meaning is the key to transforming data into insight. 4. Map a day in the life. Use the data you gather to map a typical day in the life of your target consumer. This might rely on data relating to how, when and why these consumers purchase products or services, what their interests and perceptions are, as well as social data that sheds light on how these consumers spend their time online. Digging into these seemingly mundane details can help you to put yourself in the shoes of your audience, identifying the ideal times, channels and mediums they would be most receptive to your message, or highlighting the common challenges they face to guide your content. This is where your insights, or the fundamental truths about your audience that you can tap into, begin to take shape. 5. Take a bird’s eye view. Don’t get bogged down in single data points or lose sight of your goals by going off at a tangent. Instead, try to maintain a wider perspective: examine broad trends, and draw on comparable time frames to highlight the most important shifts and changes. This will help you to maintain focus on the insights that count. To get to the heart of an insight also means analyzing data from at least two angles. As Ben points out, some trends contradict one another, presenting a need to delve deeper. “In investments for example, that data shows that many consumers describe themselves as ‘risk-taking’ but don’t agree with borrowing money. So that’s two opposing stats that you need to link together and find out why that is.” In a digital world, data is ubiquitous, but the power of this data lies in the creation of insights. As Jamie Robinson, Global Director of Research and Insights at WeAreSocial says, “If a campaign can tap into that insight, we believe it will work anywhere.” Marketing- What Brand Purpose Really Means & Why it Matters
The aim of brand purpose is to change the world for the better (most of the time). Through purpose, brands are becoming more than a quality mark or an abstract expression of self, they’re taking direct action. And with the spotlight firmly on a number of sectors to be accountable for their actions, the challenge becomes finding the ‘right’ purpose; one that’s genuine, gets people on side, but also makes commercial sense. Here, we cut through the noise surrounding the consumer-led phenomenon that is brand purpose, outlining how consumer insights help brands shape it, and maximize its impact. Hear Sandy speaking about brand purpose on Dublin City FM [20:00] The difference between brand purpose and CSR The Business Roundtable recently dropped its ‘shareholder first’ doctrine, recognizing that major corporations have a responsibility to a wider group of stakeholders. This move places new importance on the already established idea of brand purpose and guarantees board-level support. On the surface, brand purpose may seem like just a new term for CSR, but the two are distinct in two key ways. 1. It doesn’t have to focus on social or environmental good (but it often does). Although many brands today shout about their desire to ‘do good’, purpose is not exclusively about social or environmental initiatives, though they’re undoubtedly the most powerful and commonly seen examples. It’s more about the fundamental essence of the business and where it’s heading. Ben and Jerry’s, for example, split their purpose into three: product, social and environmental, and are transparent about the commercial goals of the business. 2. Purpose is baked into the branding. CSR often runs in parallel to the business, has allocated budget and (in its worst form) exists only to offset a company’s negative impact. Purpose, however, doesn’t come from the marketing department alone, it’s visible in all elements of the business, from promotional material to operations. Put simply, where CSR is a commercial objective, purpose is branding and culture objective. Established brands need to find their purpose Brand purpose has become a key talking point recently, so although CSR initiatives are becoming a top priority among established brands, building purpose into your business requires no small measure of strategic and analytical thinking. It’s harder to add purpose to brands with established brands with legacy baggage, putting them at a disadvantage to younger brands. Bill Bernbach, founder of Doyle Dane Bernbach, states “a principal isn’t a principle until it’s cost you money”. But for young brands that structure their whole business models around strong principles, they turn what is a challenge for larger brands into an opportunity to drive consumer engagement and eventually sales. The commercial benefit of purpose There’s no hiding the fact that brand purpose has to make financial sense. But when the intent is genuine, and the impact positive, commercial gain follows – and our latest research tells us why. Purpose drives engagement We know consumers want more than a transactional relationship with the brands they buy from and interact with. With the right purpose, consumers will not only engage with your brand, they’re more likely to spread the word. Personal recommendations remain one of the most powerful awareness drivers. Tread carefully: woke-washing But consumers are also acutely aware of false purpose, and we’ve seen from pulled campaigns by the likes of Pepsi and Gillette, that they’re quick to pick up on misguided purpose, even if the campaigns reflect popular, genuine sentiments. With the pressure on to not only find a purpose, but the ‘right’ purpose, brands should first seek to identify the trends that matter most to the people they’re targeting. Steps to identifying your brand purpose Finding the right brand purpose comes from listening to consumers at different levels. While purpose shouldn’t be driven by commercial gain, to ensure you get the best results as a business it’s important to look beyond purchase behaviors alone towards who your target consumers are and what they value as people 1. Get a local perspective. Why? Sentiments change dramatically across borders and even within countries. Local data enables you to identify elements in consumers’ personal lives that trigger actions (both from a commercial and wider perspective) and tailor your messaging accordingly. How? Regional data from GlobalWebIndex allows you to segment, compare and analyze consumers in a specific area to see how their commercial and emotional responses relate to wider populations. There are four key psychographic indicators that should be highlighted in each region. Attitudes, interests and self-perceptions Lifestyle motivations Perceptions on wider life Brand advocacy 2. Cross-reference with global trends. Why? Knowing which trends carry the most momentum globally can help negate risks, as well as maximize the potential impact of your message, especially if speaking about potentially controversial topics. Global trend analysis will also help predict where specific trends are heading to ensure you don’t follow one that will dissipate. How? With your local findings, compare them to wider, overarching trends to identify the most commonly shared sentiments among your target market. Assess how the findings fit with your global trends to ensure scalability, continuity and longevity at a local level. 3. Explore sector-specific sentiments. Why? Having identified trends and patterns on a local and global level, now you should look look closely at consumers in your sector. These consumers are the most valuable source of information on trends in the industry. And knowing them in granular data is pivotal to finding the purpose that resonates in your sector. How? Apply the psychographic indicators mentioned in point one to your specific market to find out how your consumers compare to the wider local and global populations. 4. Consult brand and competitor data. Why? Brand data enables you to see your own brand’s reputation, alongside your competitor’s. Looking specifically at your own reception among your consumers and wider markets is the final layer to truly identify how to challenge perceptions, improve opinions and drive positive sentiment. How? Custom surveys get to the heart of what consumers think about your brand and others in the industry by letting you ask the most pertinent questions, tailored to your needs. Uncover their opinions on specific brands and competitors, what they value about brands with a strong purpose, and analyze their attitudes to wider life. 5. Test your ideas and concepts. Why? When purpose is misguided, it can backfire. It’s important to ensure your message is one that people identify with, and is transparent in its intent. How? Testing consumer response to specific concepts or campaigns that encompass your brand’s purpose will help you shape and reshape before launch. Lessons from Unilever: Taking purpose seriously Despite not having the ‘purpose pedigree’ of smaller brands, big brands stand to benefit greatly from introducing fresh and considered ideologies into their brand’s message. Unilever, a multinational company celebrating its 90th birthday, is one brand that proves purpose isn’t simply a luxury buzzword, but a guiding light for all decision-making. Purpose starts at the top. Here’s what Alan Jope, CEO, has to say on the role of purpose within the CPG sector: “Purpose is one of the most exciting opportunities I’ve seen for this industry in my 35 years of marketing. Done properly, done responsibly, it will help us restore trust in our industry, unlock greater creativity in our work, and grow the brands we love.” Brand purpose gets results. “Brands taking action for people and the planet grew 69% faster than the rest of our business last year, explains Jope. Now we’re committing that in the future, every Unilever brand will be a brand with purpose. We’ll dispose of brands that don’t stand for something” Woke-washing pollutes purpose. Speaking at the Cannes Lions, Jope said woke-washing was undermining the credibility of the advertising industry and eroding trust in it. “However, purposeful marketing is at an important crossroads. Woke-washing is beginning to infect our industry. It’s polluting purpose. It’s putting in peril the very thing which offers us the opportunity to help tackle many of the world’s issues. What’s more, it threatens to further destroy trust in our industry, when it’s already in short supply.” Purpose is a consumer-led phenomenon Purpose is not just a box-ticking exercise – it should support global progress. It’s also a necessary part of a compelling brand story. Brand purpose dictates which direction the brand story takes, gives the message momentum, and invites consumers to be part of the journey. Consumers hold the key to identifying the ‘right’ purpose. One that balances the need to do good with commercial gain. After all, the two are not mutually exclusive. With all brands under the microscope for their impact, a unique opportunity arises for those prepared to consider purpose deeply, look to understand what it is consumers want, and respond with a genuine, pragmatic approach.
Three UK has backed an integrated marketing push to support the extension of its ‘Feel at Home’ offering allowing mobile users to use their handsets abroad at no extra cost.
From April, Spain, the UK’s most popular holiday destination, and New Zealand will join the 16 existing ‘Feel at Home’ holiday hotspots.
The campaign, created by Wieden + Kennedy, builds on last year’s #HolidaySpam campaign, apologising for the social media deluge of hot dog legs, plane wings, sunsets, palm trees and cocktails. This time the public is encouraged to ‘prepare themselves’ for even more holiday spam flooding their feeds.
Tom Malleschitz, director of marketing at Three, explained the campaign is based on holidaymakers love of bragging about their breaks.
“The campaign will drive awareness of this unique proposition and now we have added Spain even more of our customers will be bragging abroad to their heart’s content,” he said.
A second TV spot features holiday spammers, Dave and Sherri, discussing their well-documented trip to the Grand Canyon. Both commercials will run with supporting 30 and 10-second cut downs with a suite of executions running across cinema, video-on-demand, press, social and radio.
Out of home and digital out of home sites will be used to make an example of holiday spammers and prepare those left at home for more.
Three’s award-winning ‘Holiday Spam’ campaign promoted the brand’s offering that enabled customers to use their phones abroad at no extra cost.
Tracking the data usage of a group of customers abroad, the teams found that they used 71 times the amount of mobile data they would have used had they been charged as normal – mostly to post holiday snaps on social media.
The creative tapped into this finding, warning UK viewers to expect an onslaught of ‘holiday spam’ photos, thanks to the new offer.
The campaign featured a series of 60-second TV ads showing travellers sending clichéd holiday photos to friends and family members back home.
Using insight to drive awareness of their unique proposition and appeal to the emotions of their target consumers, the campaign led to a 90% increase in Three’s social conversation volume, higher brand metrics, and customers saving a collective £2.7bn on roaming charges.
This particularly audience-focused campaign from 2014 led by Mediacom, born out of the need for Dell to build brand trust in Germany, led to the realization that the tech giant had been making false assumptions about its target market.
Dedicating a significant amount of their time to audience research, the creative Medicom team discovered that most IT decision-makers actually relied on an informal network of IT Administrator colleagues to make a purchasing decision.
Using this insight to refocus their marketing, they uncovered a clear frustration among their target market with computer illiterates.
The message was simple: “Life is tough enough, take IT easy”.
Launching a powerful, content-driven campaign, it consisted of a 16-webisode sitcom honouring the heroes of the IT department and recounting tales of day-to-day struggles that only their target audience would understand, resulting in an abundance of targeted leads.
“The Dell ‘Tough Enough’ campaign was so successful because, rather than talking to the target audience about servers or back-end infrastructure, we created branded content that entertained them while still enabling them to relate to the brand”.
“We made them laugh and, most importantly, we also made it easy for them to share their own stories.”
A growing number of B2B marketers are embracing account-based marketing (ABM) as part of their overall marketing efforts. ABM perfectly complements the traditional, short-term marketing goal of generating leads with efforts aimed at driving long-term revenue growth.
What is account based marketing?
In its simplest form, ABM is a strategy that directs marketing resources to engaging a specific set of target accounts. ABM doesn’t just call for alignment between sales and marketing teams – it forces teams to align because personalization at the account level requires sales and marketing to be in sync on account-specific messaging. The motivation? Higher revenues in a shorter time frame.
Instead of casting a wide net with their lead-generation efforts, marketers using ABM work closely with sales to identify key prospects and then tailor customized programs and messages to the buying team within target accounts.
Why would you want to practice ABM?
Even as buying circles are growing, marketing teams are feeling more pressure to directly impact revenue growth. It’s a core reason that the ABM approach is seeing significant uptake. ABM focuses you on relationships in your highest opportunity, highest-value accounts.
For instance, assume you sell an expensive SaaS product or consulting service. Rather than take a blanket approach – going after small businesses, SMBs, and enterprises – you might start by focusing on those accounts that have the highest need and the required budget.
By combining efforts and resources, marketing and sales can more efficiently engage and convert accounts. In fact, they gain the luxury of slowing down to develop a thoughtful approach that boosts the odds of driving engagement.
That well-considered approach matters at a time when buyers are increasingly insistent on outreach tailored to their business and even their personal interests within the business. ABM requires that marketing and sales engage each person on the buying team in a personalized way. A personalized approach is essential when aiming marketing and sales efforts at a few select, high-value accounts.
Personalize well and buyers are more open to your outreach and less likely to ignore your content and communications.
Who does ABM benefit and how?
Some say ABM is most effective for B2B companies that sell to a few large key accounts or accounts of a certain size in a specific industry. Others argue that ABM can work for B2B organizations of any size, as long as the focus is on high-value accounts.
At a more granular level, ABM is a win-win-win for sales, marketing, and customers.
ABM perfectly complements the account-based approach sales teams have embraced for years. With the dedicated involvement of marketing, sales teams can better personalize their outreach. Nurturing targeted members of the buying committee with appropriate marketing messages tends to speed up the sales process, allowing sales to achieve better close rates while closing bigger deals faster.
Marketing benefits because sales sees the marketing team as a trusted ally on a strategic mission. Rather than deliver leads that languish, marketing works in tandem with sales on a defined list that both teams agree make the most promising targets. In fact, 84 percent of businesses using ABM say it delivers higher ROI than other marketing campaigns.
A valuable by-product is that ABM enriches the marketing team with a much deeper understanding of the company’s overall target audience. Marketing can apply their insight into what content and messages resonate to amp up the results of their other efforts.
Customers also benefit from ABM in the form of a better experience. Buyers prefer personalized interactions, and ABM delivers just that. Serving targeted content and messages that resonate takes up-front work, and customers will recognize and appreciate this – and the fact that you don’t waste their time with ones that are off the mark.
How to align sales and marketing around an ABM strategy
Getting sales and marketing working as a cohesive account team is the ultimate secret to success. Without that alignment, your target accounts will suffer through a fragmented experience as marketing and sales trip over each other, rather than pave the way for each other to effectively engage with key decision makers.
Success starts with clear communication between your sales reps and marketers, and continues as both groups execute their part of the strategy throughout the buyer journey. Agreeing from the get-go on the ultimate goal of the ABM program helps marketing and sales get in sync and figure out the most fitting target accounts and the best strategy for reaching and engaging them.
While the top objective is to land new accounts or expand business with existing ones, marketing and sales should define smaller goals that align to the bigger goals. These stepwise goals can include:
Pinpointing a higher number of decision makers within each account
Securing a greater number of senior-level appointments/meetings
Accelerating the sales cycle
Encouraging higher customer loyalty or reducing churn
Closing a higher percentage of large deals
Boosting revenues within existing accounts
Creating an account based marketing strategy
When marketing and sales share a similar mindset – how to target and land accounts – they can collaborate around a common goal. The first step is co-developing an ABM strategy so sales and marketing can work together as parts of a joint “account team.”
At a high level, this means marketing focuses its budget on the accounts that sales deems most important. Sales and marketing agree on common goals, messaging and content, how to execute, and metrics to evaluate success. Let’s walk through the core steps of developing an ABM strategy.
Step 1: Identify high-value accounts
Analyze your existing customer base to identify the ones that fit your definition of an ideal customer. While this definition can vary based on nuances such as industry and other overarching descriptors, it often boils down to the most profitable, long-term, happy customers who are a pleasure to work with. In other words, they’re a strong fit for your company, enjoy success with your solutions, and deliver the biggest lifetime value.
Keep an eye out for the existing accounts that have shown openness to expanding their footprint with your company, along with new accounts that satisfy your strategic criteria. For new accounts, you might answer the question “Does this account have an urgent need we can address and that would compel it to spend $X amount?”
Step 2: Map individuals to accounts
In any B2B deal involving a significant purchase, your marketing and sales teams will need to help drive consensus among the key stakeholders. Your first step is identifying those who can wield influence on the final buying decision. These are the committee members you need to engage and persuade to take action.
For example, let’s say a company selling marketing software is identifying key decision-making roles within select accounts. The list of individuals might include the CMO, digital marketing managers, CIO, and CFO.
Just remember: Individual contacts are important, but in the context of the entire account. In other words, you need to connect the concerns and needs of each person on the buying committee back to the strategic objective of their company. Your main goal when engaging each stakeholder is to help drive consensus for a purchase decision.
Step 3: Define and create targeted campaigns
Once you’ve chosen your target accounts and individuals, you need to develop personalized campaigns designed to resonate with them. Keep in mind that building and nurturing relationships is central to a successful ABM program. You’re most likely to succeed by providing valuable consultation and education, all mapped to the account’s buying cycle.
It starts by aligning your messages and content with the interests, needs, and challenges of each account and key stakeholder. Ideally, you should develop a unique value proposition and relevant content for each stakeholder that influences a buying decision.
Bake ample thought leadership content into your content plan:
Understand what stakeholders believe. Start with research into the existing state of the conversation, so you can meet your reader where they are.
Develop and articulate a well-informed point of view. Make a strong case for your position, and make it clear that you have the authority to take a definitive stand.
Frame your story in terms of value delivered. Back up your viewpoint with real-world examples that demonstrate your ideas in action.
If your messages and content are on point, buying committee members might share it with their colleagues. Truly personalize the message for each individual within an account. Doing so, you instill confidence in your company as a trusted advisor and partner that has done its homework and is providing useful information and guidance.
Step 4: Pinpoint optimal channels
To reach your target accounts and the key stakeholders, figure out which channels they use most to research trends and solutions. This may vary by role or even industry, so don’t assume you can apply a one-size-fits-all approach here.
Step 5: Develop a strategic playbook
To clarify roles and responsibilities, put together a playbook that outlines who does what and when. Specify the tactics that both marketing and sales will use to engage contacts within accounts and drive interest and action. Give this meaning by designing a campaign cadence that maps each communication/outreach with the appropriate channel and message or content.
Step 6: Execute your campaigns
Marketing and sales engage with accounts on an individual level using a personalized strategy that makes sense for each contact. Campaigns can include an array of tactics, including email, special events, direct mail, ads, and more. Since relationships drive ABM strategy, use that to guide your outreach.
For example, maybe a specific team member reaches out because they went to the same college or share the most professional connections with the contact. That team member can then make introductions to the team member who owns the account.
Step 7: Measure and optimize
Measuring ABM results is different than measuring the impact of standard lead-generation tactics. Marketing and sales are jointly accountable for driving pipeline and revenue when it comes to ABM. You care about moving accounts – not individuals – through the purchase process.
In addition to tracking account engagement, tally opportunities created, along with closed-won deals and their value. Give your teams enough time to generate results – in line with the typical purchase cycle – and then adjust your strategy and tactics as necessary.
Types of account based marketing
ITSMA is widely credited with pioneering the ABM approach in the 2000s. Along the way, it has identified three ABM approaches companies take: strategic, lite, and programmatic.
Strategic ABM
This approach is executed on a one-to-one basis, typically for highly strategic accounts. Relationship-building is a core focus of strategic ABM. As a result, this approach relies heavily on personalized marketing campaigns that demonstrate an in-depth understanding of the target account.
ABM Lite
The ABM Lite approach makes it possible to pursue ABM at scale. In this version, the focus is lightly personalized/customized campaigns aimed at a small group of like accounts. For instance, accounts of a similar size facing comparable challenges and pursuing analogous initiatives might get the same messaging and creative.
Programmatic ABM
You could say programmatic ABM combines strategic and lite ABM by calling upon the latest technologies to tailor marketing campaigns for target accounts at scale. Usually this approach goes hand in hand with a focus on a certain horizontal or vertical segment.
You might find it makes sense to use just one approach or a mix depending on your business and the sophistication of your ABM program.
Account based marketing vs. inbound marketing
Some marketers wonder whether they should dedicate their resources to ABM or inbound marketing. But it’s not an either-or decision. Both are core practices in the modern marketing toolbox. And they actually complement one another.
While you are engaging individuals within target accounts with personalized content and interactions through outbound methods, you can reinforce your messages with your online presence calling upon best practices for inbound marketing. In other words, you are trying to attract your target accounts through helpful, relevant content. You may even gain a new target account through your inbound marketing efforts – one that perfectly fits your definition of an ideal customer but was overlooked as you pulled together your target list.
Since your inbound success depends on your content being found online, you need to develop your content with search engine optimization (SEO) in mind. Many B2B organizations also find it effective to amplify their content reach using online ads.
Account based advertising
With account-based advertising, you proactively choose who should see your display ads. To that end, every account-based marketer can take advantage of LinkedIn Account Targeting. After you upload a list of your target companies, Account Targeting matches them against the 13+ million Company Pages on LinkedIn.
At scale, you can get in front of key stakeholders across target accounts with ads tailored to their role and stage of the buying cycle. For your initial outreach, you can use LinkedIn Sponsored Content campaigns to display relevant content to a select audience segment. Then through Sponsored InMail, you might directly reach out with a short message from a sales rep with a personalized offer.
While you can reach any stakeholder using account-based advertising, it’s especially valuable for engaging the decision makers who aren’t actively conducting purchase research for the solution in question. Think the CFO or Procurement Officer. Account-based advertising is a relatively inexpensive way to expand your reach within your target accounts.
In a pilot of LinkedIn Matched Audience campaigns, marketers saw an average 32 percent increase in post-click conversion rates and 4.7 percent drop in post-click cost-per-conversion.
Common barriers to ABM success
While it takes a concerted effort and up-front work to launch an ABM program, success is within reach for every B2B organization. So why do some companies struggle to unlock their full revenue potential via ABM?
Failure to align on the right target accounts
It’s a given that if marketing and sales don’t agree on the same target accounts, all the promise of ABM goes out the window. ABM works largely because of the combined power of marketing and sales hyper-focused on the accounts with the highest potential. Fail to get in line on this foundational element of your ABM program and all your other program tactics will be for nothing.
Lack of accurate shared data
Calling upon a shared source of data about target accounts goes hand in hand with identifying the right target accounts. According to InsideView, 43% ranked lack of accurate/shared data on target accounts is the top challenge to sales and marketing alignment. If marketing is turning to its marketing automation system of record while sales consults CRM to pinpoint target accounts, it’s no surprise the two groups are out of sync.
Check out our recent post for ways you can align around your target audience and knock down these barriers to success.
Unrealistic expectations
If you’re hoping your ABM program will transform the buying cycle and your revenues overnight, you’ll be sorely disappointed. Rather than expect miracles, set realistic goals. Until you smooth out all the wrinkles and your ABM program kicks into high gear, you’re far more likely to see incremental improvements rather than mind-blowing results. As long as you maintain an upward trajectory, you’re on the right track.
Examples of account based marketing in action
A number of new tools and technologies on the market have made ABM more practical by enabling marketers to deliver targeted messages with improved precision. As we previously mentioned, LinkedIn has a targeting capability that helps support ABM: LinkedIn Account Targeting.
LinkedIn Account Targeting enables marketers to engage the accounts that matter most to their business by tailoring their LinkedIn Sponsored Content and LinkedIn Sponsored InMail campaigns to a list of top priority accounts, and then layering profile-based targeting, such as job function or seniority, to put their content in front of the right people in a particular organization.
If you’re looking for more inspiration, look no further than these examples of marketers who have used LinkedIn to drive ABM success.
Genesys uses ABM to drive 60% of net-new leads
When the Genesys digital marketing team needed a solution to underpin their newly launched ABM program, it chose LinkedIn. As Bhavisha Oza, Director of Digital Marketing for Genesys, says, “LinkedIn, with its massive professional network, was unique, as it offered an ABM program targeting IT and support functions, our core buyer personas.”
Using LinkedIn’s highly accurate account targeting capabilities and LinkedIn Sponsored Content, the team ran campaigns that put their brand in front of the target audience. Thanks to a combination of targeting and optimization, the team’s ABM efforts have yielded encouraging results, with 60 percent of all leads generated being marketing-captured, or net-new leads.
ServiceNow captures 100% of form fills using ABM
In support of its ABM strategy, ServiceNow used LinkedIn’s targeting capabilities to deliver content to niche decision makers within select accounts. “We haven’t seen any other solution that is able to give us that level of targeting,” says Suma Warrier, Manager of Customer Acquisition and Personalization for ServiceNow. Once it noticed a high percentage of LinkedIn traffic was coming via mobile, ServiceNow integrated Lead Gen Forms into its campaigns. The company saw stellar outcomes, including a nearly 100% improvement in form fills by using Lead Gen Forms.
SalesLoft reduces cost-per-conversion by nearly 50% with ABM
Every quarter, SalesLoft’s marketing and leaders agree on account list tiers. Then the company uses account targeting and contact targeting to run ABM campaigns designed to engage decision makers at the prioritized accounts. By using ABM and LinkedIn to connect with prospects on a deeper level, SalesLoft has cut its cost-per-conversion (CPC) nearly in half.
Spigit converts a higher percentage of leads into revenue with ABM
While a lower CPC is cause for celebration, the real proof of success is revenue generation. Spigit used LinkedIn’s targeting capabilities and LinkedIn Sponsored Content to run a series of ABM campaigns. The results far exceeded LinkedIn’s benchmarks, with an overall lifetime click-through rate (CTR) of 0.517%, with an engagement rate of 0.567%. According to Lin Ling, Growth Marketer at Spigit, “LinkedIn has been, by far, the best channel for generating quality leads that convert, helping us exceed our revenue goals and achieve 7X ROI.”
10 Marketing experts define account based marketing
Marketers can learn how to bolster their ABM efforts – or implement a new program – by studying other marketers who are ABM leaders. We asked 10 ABM experts to share their definitions of account-based marketing, which can provide some insight of how they put it into practice. Share their words of wisdom with your colleagues should you need to inspire them to get on board with ABM.
Account based marketing is more targeted and personalized versus spray and pray, where you’re just trying to capture anyone in your net. You’re being very specific about who you want to talk with, and it’s a way for sales and marketing to align on the target.
In its purest form, account based marketing has been around forever. Account based marketing is simply instead of fishing with nets, we’re fishing with spears. You identify exactly the prospects you want to do business with and then you market very precisely and narrowly to them directly. I think we have a renewed interest in ABM now, because there’s an advancement in tools and technology that make it a little easier to execute – but the idea of doing target account selling and target account marketing is not new.
Our definition of account-based marketing is just good marketing. If you only had one prospect to sell and market to, you would treat them with the same principles as outlined in ABM. It’s just aiming at a more well-defined area of that funnel, and treating your best buyers in a much more personal way. And we’re focusing on not only the lead but the account as a whole.
To break down walls between sales and marketing, ABM is pretty close to a silver bullet in that it aligns programs’ dollars and focus behind the accounts that the sales teams cares about. So there's inherent buy-in. That said, ABM is only as good as your visibility into your highest potential accounts and best-fit customer segments, which gets clearer over time. So it’s most effective when deployed as part of a comprehensive set of targeting strategies.
Account-based marketing is thinking of the account as a market of one. It’s about being laser-focused on their needs and deploying the most effective marketing tactics available to nurture value-added, pervasive conversations with key stakeholders. This is the place where marketing and sales are at their closest, brought together by common goals and a crystal clear understanding of what success looks like.
-- Nick Panayi, VP, Global Brand, Digital Marketing & Demand Generation, DXC Technology
I define account-based marketing as total marketing and sales alignment around who are target customers and the efforts to go get them. They align with the same outcome in mind: to get a specific account as a customer.
ABM to me and to CSC is treating a single account as a market of one, and within that marketing of one we’re looking to customize our marketing activities and message in close collaboration with our sales team – and not just down to a buying center or persona but right down to the individual.
Account Based Marketing is a strategic approach that coordinates personalized marketing and sales efforts to open doors and deepen engagement at specific accounts.
Instead of leveraging a set of broad-reaching programs designed to touch the largest possible number of prospective customers, an ABM strategy focuses marketing and sales resources on a defined set of targeted accounts and employs personalized campaigns designed to resonate with each individual account. With ABM, your marketing message is based on the attributes and needs of the account you’re targeting.
Account based marketing is focused B2B Smarketing. I say “Smarketing” because ABM is all about focusing on the right accounts in collaboration with sales. ABM is not a solo activity. It's the combination and range of activities from advertising, direct mail, calls, emails, content — all centered around the ideal set of accounts that you believe has the need for your solution. It's quality over quantity in its most basic form.
-- Sangram Vajre, Co-Founder and Chief Evangalist, Terminus
