Today I’m pleased to announce that Account-Based Marketing (ABM) has officially made it to the mainstream with recognition by Forrester as a new technology category. But I’m even more proud of our extended team of customers, partners, investors and employees, for building Demandbase into a company with a platform and suite of solutions that’s earned us the leader position amongst a dozen plus companies considered. For the last few years, people have been asking me questions like “how did you pioneer the ABM category? What are the risks? And can you tell me how it happened so I can do the same in my industry?” I generally shrugged these questions off because I felt like we were just getting started. And while in some respects I still feel this holds true, I thought this new milestone offers me the opportunity to offer a few insights.
I used to think category creation was something the marketing department owned. First, they’d come up with a three word description whose TLA generated a unique, buzzy sounding acronym. Then they’d say it 10,000 times and voila, you’d have a category. While this obviously isn’t the case, for the people reading this who lived in the dot com days know exactly what I’m talking about.
The reality is that category creation is difficult to get right and takes tremendous commitment from all employees, including increased investment and patience from investors and an ecosystem that perseveres to achieve incredible customer results. For Demandbase, we had to push through the challenges of customers not ever hearing of ABM, or investors asking for comparable exits in ABM or explaining to engineering candidates that building an ABM platform with AI may offer more unique challenges than the job at Google they were considering. These are actually the easy ones, but if you can persevere, you might just have the beginning of a new category.
The Pay Off
With risk comes reward, or failure, obviously. While I’ve failed at category creation in the past (which is way more common by the way), I’m really excited by the pay-off Demandbase is realizing in the marketplace. Our top line revenue continues to grow at a rapid pace and it no longer takes months before customers find or create new budget. Overcoming this obstacle, means sales cycles getting shorter and the predictability of our business becomes easier and easier. And there’s nothing like the success of ringing the bell four times or more often in a given month. A bona fide category also makes it much easier to sell into new industries that may not be for early adopters. Just four years ago, nearly 70% of our new deals were with high tech companies. Today, that proportion has dropped to near 20% with the rapid adoption by banks, healthcare companies, consulting firms and manufacturers.
Category creation also offers a unique incentive for employees. I’ve held dozens of positions during my career, but outside of Demandbase, have never been at a company that truly pioneered and led a category. In fact, when I did a quick poll at our company, I learned that this experience is unique to everyone here as well. Why is this important? Because it’s part of the mission and glue that bonds our team together and build an amazing culture. I remind employees that this unique experience will become an asset that they can take to their next opportunity. Who isn’t interested in meeting with the initial team that lived at Salesforce.com during the evolution of SaaS and CRM?
Finally, I can’t forget the financial impact. Even though we’re recognized as a leader in one of the first major analyst reports on ABM, I recognize we’re still early in our journey. But if we maintain our trajectory through continued success with customers and keep investing heavily in innovation to extend our advantage, I’m confident that history will continue rewarding the #1 player in a category at values three times that of the number two or number three player.
Interestingly enough, this blog post started with a focus on how we got here, but I didn’t think it was nearly as exciting as what’s in front of us. The truth is, that ABM has been a practice used for 50+ years. I wasn’t around before then, but 25 years ago when I was at GE, I remember teams would line up marketing programs dedicated to the most valuable global accounts. When I started Demandbase, all I did was recognize that billions of dollars were being wasted in B2B marketing and that technology dedicated to ABM could transform B2B and the way companies market and sell to each other. It’s required an exciting 10 years of ups and downs, $100 million dollars from great investors and nearly 300 of the best people in the industry to get us to this important milestone. Now we’re ready to step on the gas and go even faster! A blog post on the complete journey can always come later.