Account-Based Marketing is a joint Sales and Marketing initiative that focuses on best-fit customer accounts rather than specific individuals. Marketing teams use their sales counterparts’ customer knowledge and expertise to identify these best-fit accounts, and sales relies on marketing to find and engage those high-value accounts.

Compared to ABM, lead generation is much more individualised. It can therefore target a range of variables such as job title, age group, gender, interests, and so forth in order to increase the ratio of lifetime customer value (LTV) to cost per acquired customer (CAC), or LTV:CAC, and develop a sales pipeline. Businesses can use it for both B2B and B2C transactions thanks to the prospect nurturing functionality.

Deciding between Account-based marketing and lead generation

While there is some overlap, these two definitions should have shown how different the two strategies are. In this case, however, we’ll go a step further and examine the differences in their outcomes:

Better leads vs more leads

ABM generates more qualified leads than lead generation because it is more targeted.

This distinction is also influenced by process. While both approaches take intent data into account and measure engagement, account-based marketing necessitates the sales team quickly developing a relationship with those accounts, increasing the likelihood of conversion.

Lead generation, on the other hand, targets more self-directed buyers, as previously stated. As a result, the timing and approach of the sales team must be more cautious. Because of the wider net and shorter sales cycle, lead quality may be less certain.

Big deals vs small deals

Account-based marketing seeks to deliver relevant messaging and content to accounts that are most likely to become long-term customers.

Due to a greater number of decision-makers and/or industry-specific challenges, larger organizations may be more difficult to attract through lead generation. Lead generation is more effective with larger audiences once again. Simply put, lead generation is far more effective for products with a wider appeal and lower entry cost. Using online channels such as Facebook or Google Ads, which are less expensive to run than account-based marketing plans, can yield a higher ROI.

Another way to look at it is that the leads should be of higher quality the more expensive the product is.

Alignment vs silos

The two strategies’ corporate structures are also distinct. Account-based marketing necessitates complete sales and marketing alignment. When these departments collaborate, nurture, and incubate leads, conversion rates rise. Account managers must understand the goals of their prospects in order to have the right conversations with them and assist other teams in achieving corporate goals throughout the campaigns.

Despite the fact that similar team alignment benefits and improves lead generation, the two frequently work in silos. The length of the nurturing and sales cycle, as well as the size of the organisation, may both contribute to this separation.

Account-based marketing vs lead generation: finding the right fit

We believe the answer is determined by a variety of factors, including the market, the product, the product’s price, and others. We also believe it stems from a clear understanding that the two are not interchangeable; rather than collecting lead information, ABM aims to pique the interest and awareness of a predetermined list of accounts. As a result, those buyers and providers are much closer and more intimate. Furthermore, the process’s cost is likely to rise.

Lead generation, on the other hand, aims to collect leads from a bigger demand generation campaign. In order to lower their Cost per Lead (CPL) and maximize their ROI, businesses can run multiple campaigns concurrently with it because it is less expensive than ABM.