Why Does Account-Based Marketing Fail?
A year into an account-based marketing program, the platform dashboard shows engagement climbing across a target list of several hundred companies, and the weekly report flags a dozen accounts as "surging." The head of sales says her team is still calling the same accounts it always called, none of the surging ones has turned into a meeting, and the platform contract is up for renewal next month, so before anyone renews it or writes the idea off, it's worth answering a plain question first: why does account-based marketing fail?
Account-based marketing fails when the account list isn't drawn from your most profitable customers, sales and marketing don't work the same accounts together, or the program is judged on engagement instead of signed deals.
Each of those causes leaves a different trace in records you already keep, so the sections below start with what account-based marketing is and then show how to find out which one is costing you.
What Is Account-Based Marketing, and How Does It Work?
Account-based marketing (ABM) means choosing a named list of companies you want as customers and having marketing and sales work those accounts together, with outreach, content and ads tailored to each one, instead of marketing to a broad audience and waiting for leads. It works backwards from the usual approach, because you decide who you want before you spend anything to reach them.
In practice an ABM program has three parts: the list of target accounts, the people inside each account who influence the purchase, and a plan for reaching them that sales and marketing share. ABM platforms help by showing ads to people at the listed companies and flagging which companies seem to be researching your category, but the list and the shared plan matter more than the software, and a short list can be worked without a platform at all.
The list should come from the buyer you've already found to be the most profitable, which is what the IMPACT Prospect step works out from your own customer data.
ExampleThe contractor's named list of property management firms
A commercial HVAC contractor doing about $40M a year, the example we follow through every step on this site, runs a small ABM-style program inside its channel mix. Alongside Google search, LinkedIn and the local building owners' association, it reaches out directly to a named list of property management firms, offering each a free five-year HVAC replacement forecast for one building.
- Accounts on the list
- About 60 named property management firms
- Who the list is aimed at
- Firms managing two or more commercial buildings in the service area, with equipment more than ten years old and no single service contract
- The offer
- A free five-year HVAC replacement forecast for one building
- Personal touch
- A page built for each of the largest firms
The list comes from the buyer description on the IMPACT Prospect page, which is why it holds no public-bid buyers.
Why Do Account-Based Marketing Programs Fail?
In the programs we review, ABM fails for four reasons, and in our experience the first one often drives the others: the list is built from the wrong data, sales and marketing work different accounts, success is measured on engagement, or the list is too long to be personal.
Four reasons ABM programs fail, and what fixes each
| Cause | What it looks like | What fixes it |
|---|---|---|
| The list isn't built from your most profitable customers | Accounts were chosen by industry, size and revenue filters in a data tool, or by which companies are biggest | Rank your own customers by lifetime gross profit and build the list from companies that look like the top group |
| Sales and marketing work different accounts | Marketing runs ads to the list while sales prospects its own territory, so warm accounts never get a call and callers don't know what the account has seen | One shared list, an owner in sales for every account, and a weekly review of the same accounts |
| The program is judged on engagement | Reports show ad impressions, site visits and engagement scores, and nobody can say how many meetings, opportunities or deals came from the list | Measure meetings, opportunities, signed deals and gross profit from listed accounts |
| The list is too long to be personal | Hundreds or thousands of accounts get the same ads and the same email, with a company name swapped in | Cut the list to what your team can research and contact personally |
The measurement problem is widely felt. In Gartner's 2024 survey of technology marketers, respondents with knowledge of account-based marketing named measuring attribution (39%) and measuring overall ABM success, such as ROI (36%), among the top three challenges, alongside a lack of people (36%); the public summary doesn't give the sample size.1
When sales and marketing don't agree on who owns an account and what happens when it responds, the failure looks the same as any lead hand-off problem, which why is sales not converting leads shows how to trace.
How Do You Choose Target Accounts for Account-Based Marketing?
Choose target accounts by ranking your existing customers by lifetime gross profit after the cost to win, describing the buyer type at the top, and listing only the named companies that match that description closely enough for sales to approach each one personally.
- Rank your existing customers by lifetime gross profit after the cost to win, using two or three years of history if you have it.
- Group them into the buyer types your sales team already recognizes and find the group worth the most over the whole relationship, which how to segment B2B customers covers in detail.
- Write a short description of that buyer, including the signs of a poor fit, as how to create an ideal customer profile shows.
- List the named companies in your market that match it, checking each against the description by hand rather than trusting a database filter.
- Cut the list to what your team can work personally, given how many accounts each salesperson can research and contact well in a month.
- Agree the list with sales, with one owner for every account and a note of who at each company you need to reach.
ExampleWhy the contractor's list holds only property management firms
The ranking on the IMPACT Prospect page settles who belongs on the list. Public-bid buyers stay off it, because the contractor's written description names any buyer who requires a public bid as a poor fit, even though they're the easiest to find.
- Property management firm
- $89,760
- Owner-occupied business
- $19,200
- School or public-bid buyer
- $6,400
Lifetime gross profit per customer, after the cost of winning them.
How Do You Measure Whether Account-Based Marketing Is Working?
Measure account-based marketing by what happens to the listed accounts in your CRM: how many have had a real sales conversation, how many became opportunities, how many signed, and what those customers are worth in gross profit against what the program cost. Engagement scores can show which accounts to call this week, but they don't show whether the program is paying back.
Count the program's full cost (the platform, the people, the content and the ads) and divide it by the accounts it won beyond what a matched group of untargeted accounts won in the same period, then compare that with the most you can afford to spend to win one of those customers, which how to measure account-based marketing sets out step by step. That ceiling depends on how long your customers stay, how much of their profit arrives early, your cash flow and your goals, so there's no general rule to copy. Give it at least one full sales cycle before judging, since with a short list a single deal can swing the result.
Judge the program on your CRM rather than the platform's report, because a platform that credits itself whenever someone at a listed company saw an ad will claim deals sales was already working, which the Channel Selection step covers.
ExampleThe ceiling the contractor’s named list is judged against
The step pages don't report results for the contractor's outreach list, but the test is the one its other channels face: because its customers stay about seven years and its cash flow can carry a one-year payback, it chose to spend up to one year's gross profit to win a property management firm, so the outreach's full cost per signed firm has to come in under that ceiling.
- Accounts on the list
- About 60
- Ceiling per new firm
- $13,680
Should You Do Account-Based Marketing?
ABM is worth doing when each customer is worth enough to justify personal effort, the companies worth winning can be named in advance, and your sales team has time to work them; it's usually a poor fit when customers are small and numerous or when nobody can own the accounts. For high-ticket B2B offerings, we've seen a short list of the right accounts, each with its own landing page and sales follow-up, outperform broad advertising, with ads supporting the outreach rather than replacing it.
How to build an ABM strategy turns those three conditions into a fit test you can run on your own customers' gross profit, and explains why the list should wait until you know which buyer earns you the most.
If you run a smaller business, ABM can be as simple as a list of twenty or thirty companies you'd most like as customers, a useful offer and a personal approach to each, with no platform needed. If you lead marketing at a larger company, ABM is usually one channel among several, and the Channel Selection step shows how to choose that mix and fund it around what each buyer is worth.
Rebuild the Account List From Your Own Customer Data
Before you renew the platform or end the program, check where the account list came from. If it came from database filters rather than your own customers' profit, start with the IMPACT Prospect step, rank your customers by lifetime gross profit, and rebuild a shorter list around the buyer at the top.
Related questions
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- How Do You Create an Ideal Customer Profile?
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- How Do You Calculate Customer Lifetime Value?
- How Do You Increase Customer Lifetime Value?
- How Do You Calculate the Profitability of a Customer?
- How Do You Generate High-Quality Leads?