Hey guys! 

This newsletter will focus on defining what Account Based Sales is and how to do it. 

I will be explaining WHY you as a sales leader in SaaS should focus your efforts on turning your current Revenue teams into an ABS-focused org and GO UPSTREAM!

If you wanna read more about how AI is driving this trend you can check out this! 

Definition of Account Based Sales:

Account-Based Sales (ABS) is a targeted sales approach where a company focuses on selling to a carefully chosen list of high-value accounts rather than casting a wide net. The goal is to align sales efforts closely with marketing to offer personalized engagement, addressing the specific needs and pain points of key decision-makers at these accounts. 

ABS typically involves a smaller, more strategic pool of prospects but with more intensive effort per account and HIGHER ACV. 

What about ABM(Account Based Marketing) you might ask?

Account-Based Sales (ABS) and Account-Based Marketing (ABM) are closely related but serve distinct functions in B2B sales.

1. Account Based Marketing (ABM) is a strategy where marketing efforts are focused on targeting and engaging specific high-value accounts, often using personalized content, ads, and campaigns. It's largely about creating awareness and nurturing relationships through content and digital touchpoints before sales teams step in.

2. Account Based Sales (ABS), on the other hand, focuses on the sales team’s direct engagement with those targeted accounts. It's a more tactical, one-to-one approach where the sales team works to convert high-value prospects into customers, often by tailoring outreach and leveraging insights gathered from ABM efforts.

The key difference is that ABM is marketing-led, using content, outreach, and branding to generate interest, while ABS is sales-led, involving direct interaction and sales tactics to close deals. 

ABM sets the foundation, and ABS is where the deals are sealed.

Here’s how Account-Based Sales work with KPIs and what to measure:

Key KPIs for Account-Based Sales

1. Account Engagement

   • What it measures: The level of interaction and engagement from the target account with your sales and marketing activities (e.g., attending webinars, responding to emails, visiting your website).

   • Why it matters: High engagement shows that the account is interested and moving down the sales funnel.

   • How to track it: Website analytics (page visits, content downloads), email open rates, and social media interactions. (check out https://nrich.io/ and https://hockeystack.com/ for some tools here)

2. Account Coverage

   • What it measures: The number of contacts you’ve established within a target account, including key decision-makers and influencers.

   • Why it matters: Reaching multiple people within the account increases the likelihood of a sale since most B2B decisions involve several stakeholders.

   • How to track it: CRM data (number of key contacts, decision-makers, and influencers engaged).

3. Win Rate per Account

   • What it measures: The percentage of target accounts that are converted into customers.

   • Why it matters: It shows the effectiveness of your account-based sales strategy and how well you’re converting high-value accounts.

   • How to track it: Number of accounts closed divided by the number of accounts targeted.

4. Deal Size (Average Contract Value) ACV, my friends. This is key. 

   • What it measures: The average size of deals closed with target accounts.

   • Why it matters: ABS focuses on high-value accounts, so measuring deal size ensures you're closing bigger, more strategic contracts.

   • How to track it: Sum of revenue from closed accounts divided by the number of deals.

5. Sales Cycle Length (Time to Close)

   • What it measures: The time it takes to move a target account from initial engagement to closing the deal.

   • Why it matters: A shorter cycle means greater efficiency, but in ABS, longer cycles will be accepted BECAUSE they result in higher-value deals. 

     1. Think like this: You can close 20 smaller deals at $5,000 ACV(100,000) or 5 big deals at $40,000 ACV(200,000) at a lower cost. 

     2. Yeah, don’t forget the salary cost for your 10 SDRs, your 8 AEs, and your 5 marketing people - versus an ABS team of 2 marketers and 3 senior sales reps. 

     3. Comparison:

        1. Team 1 (10 SDRs, 8 AEs, 5 marketers) costs between $1,440,000 - $2,010,000 annually.

        2. Team 2 (2 marketers, 3 senior sales reps) costs between $420,000 - $630,000 annually. (They will cost a lot more commission but hey, that's on closed revenue) 😀

   • How to track it: Time from first touchpoint to signed contract.

6. Pipeline Velocity

   • What it measures: The speed at which deals move through the pipeline toward closing.

   • Why it matters: Pipeline velocity shows how quickly you're progressing with your high-value accounts and helps forecast revenue.

   • How to track it: This is calculated by multiplying the number of opportunities in your pipeline, the average deal size, and the win rate, and dividing that by the length of the sales cycle.

7. Customer Lifetime Value (CLV) - Yeah, these accounts will stay longer, you are much more tied to their main initiatives, you are collaborating with C-level and you are much more sticky if you do this right)

   • What it measures: The total revenue a company expects from a target account over the entire relationship.

   • Why it matters: ABS strategies often focus on long-term, high-value relationships, so CLV is a critical indicator of success.

   • How to track it: Average revenue per account multiplied by the average customer lifespan.

8. Churn Rate - Yeah, they will stay longer, because of the points mentioned in point 7. 

   • What it measures: The percentage of target accounts that stop doing business with you.

   • Why it matters: A high churn rate can indicate poor alignment between your sales efforts and the account’s needs.

   • How to track it: Number of lost accounts divided by the total number of accounts.

What to Measure in ABS

• Number of engaged accounts: How many accounts are actively interacting with your sales and marketing efforts?

• Depth of engagement: How many contacts within each account are engaged, and at what level (e.g., decision-makers vs. influencers)?

• Touchpoints per account: Number and types of interactions (emails, calls, meetings, etc.) with each account.

• Conversion rates by account: How many target accounts move from one sales stage to the next?

What Matters Most in Account-Based Sales

• Alignment with ABM(Account Based Marketing): ABS works best when sales and marketing teams are fully aligned, sharing the same goals and working together to engage the target accounts. Ensure that both teams are collaborating on messaging, timing, and account targeting.

• Quality Over Quantity: ABS is all about focusing on fewer, high-value accounts. This means more resources and personalized attention for each account, rather than broad, volume-driven sales tactics.

• Personalization and Relevance: Success in ABS depends on how well you tailor your outreach to each specific account. Custom messaging and solutions that address the unique challenges of each account are critical.

• Data and Analytics: Using data to track account behavior, engagement, and buying signals is essential. This helps sales teams prioritize the accounts that are most likely to convert.

How to Work with ABS

1. Identify High-Value Accounts: Use criteria like revenue potential, strategic fit, or existing relationships to define your target accounts.

2. Map the accounts: Create detailed plans for each target account, outlining their needs, decision-makers, and pain points. Customize your approach for each.

3. Collaborate with Marketing: Ensure marketing and sales teams are aligned, sharing insights and working on coordinated campaigns to engage the account.

4. Engage Key Stakeholders: Focus on reaching multiple decision-makers within the account to increase your chances of success.

5. Use Technology: CRM systems, sales engagement tools, and account-based platforms help track engagement, automate tasks, and manage account interactions.

6. Measure and Optimize: Continuously track your KPIs, assess which strategies are working, and adjust your efforts to focus on accounts showing the most promise.

In Account-Based Sales (ABS), the strategy focuses on highly targeted, personalized engagement with key accounts. The results are often more impactful compared to traditional sales methods, as the approach emphasizes quality over quantity.

So what can you expect as far as outcome? More money! 👇🏻

1. Increased Average Contract Value (ACV)

• Why: ABS focuses on high-value accounts, meaning that each deal tends to be larger. Since the engagement is personalized and aimed at solving specific problems for target accounts, companies can often justify higher prices and long-term contracts.

• Result:

  • ACV tends to rise because the focus is on securing high-profile deals that offer substantial value to both parties.

  • The increase in contract size is due to the deep understanding of the account's needs, enabling upselling and cross-selling opportunities.

2. Shortened Sales Cycle (for High-Value Deals)

• Why: ABS allows sales teams to spend more time on fewer accounts, developing deeper relationships and understanding the accounts’ buying processes and decision-makers. By addressing pain points and aligning closely with what the customer needs, deals can close faster despite their complexity.

• Result:

  • While the sales cycle might seem longer initially due to the detailed planning and personalization involved, it often shortens compared to standard high-value deal cycles because the pitch is more targeted and the right decision-makers are engaged from the start.

3. Lower Churn Rate

• Why: The deep focus on building relationships and offering tailored solutions results in more satisfied customers. Additionally, since sales teams focus on accounts that are a strong fit from the beginning, the likelihood of customer dissatisfaction decreases.

• Result:

  • Lower churn rates because the accounts feel they are receiving solutions specifically designed for them, leading to higher retention.

  • Long-term relationships become more stable, with accounts more likely to renew contracts and engage in continued business.

4. Higher Engagement from Target Accounts

• Why: Personalized outreach, content, and communication make the customer feel valued and understood, increasing their engagement with your company. Because ABS teams focus on multiple stakeholders within an account, they can tailor messaging for each role, which further boosts engagement.

• Result:

  • More frequent and meaningful interactions with key decision-makers.

  • Increased engagement across multiple channels (e.g., meetings, events, emails), showing that accounts are highly invested in the relationship.

5. Improved Pipeline Velocity (for Key Accounts)

• Why: ABS focuses on high-quality leads, where sales reps spend more time nurturing relationships, understanding needs, and eliminating barriers to a deal. As a result, the deals that enter the pipeline tend to move more quickly towards a close.

• Result:

  • Faster progression of key accounts through the pipeline.

  • Higher likelihood of closing large, strategic deals.

Key Conclusions about ABS/ABM:

• Higher Revenue per Account: The increase in ACV results in more revenue from each customer, even if you’re working with fewer overall accounts.

• More Efficient Use of Sales Resources: Although the sales cycle might seem longer upfront, ABS improves efficiency by focusing on accounts with a higher likelihood of conversion and long-term value.

• Stronger Customer Relationships: Lower churn rates and higher engagement mean stronger, longer-lasting relationships, creating more opportunities for upselling and cross-selling.

• Strategic Growth: ABS delivers sustainable, long-term growth by targeting accounts that have the potential to become valuable, long-term customers.

In short, ABS is an effective strategy for increasing contract value, speeding up high-value deal closures, reducing churn, and driving stronger account engagement, making it a powerful approach for companies seeking to scale strategically.

This very much follows how the Enterprise game works. 

Complete conclusion:

AI is transforming SMB sales, SaaS businesses need to adapt.

1. Time to start adapting AI aggressively in your SMB teams. Like, right now. (Ps. keep in mind that you will need to make proper preparations for how the teams will change moving forward) - read about the change here!

2. Move the people you will keep into an ABS/ABM mindset today. Start the process. Start doing POCs on these segments. Start innovating your product portfolio to fit HIGH ACV accounts. Start narrowing down your ICP. Start the shift. TODAY.

In essence, AI supports or replaces current SMB strategies and streamlines the buyer's journey, making the shift to ABM/ABS not only possible but essential for SaaS companies looking to remain competitive and honestly, stay alive.

Here you can find a webinar on demand on the topic crossing the chasm for SaaS - check it out.

If you want a chat about how to make the shift, I offer a free session to discuss here!

Happy scaling, peeps! 

/Sara