The power of incumbency: Rethinking your marketing resource allocation

In the ever-evolving landscape of Account-Based Marketing (ABM), the allocation of ABM budgets has come under scrutiny. Data from the latest 2024 Client Buying Index (CBX) research by Momentum ITSMA reveals critical insights that challenge traditional budget strategies and emphasize the importance of client-centricity and personalization.

Read the full report to explore these insights further and optimize your ABM approach in 2024. 

The dilemma of ABM budget allocation

Many marketers still adhere to an outdated 50:50 budget split between acquiring new clients and retaining existing ones. However, the CBX findings suggest a need to rethink this approach. In today's competitive market, enterprise buyers show a strong preference for their current providers, making it crucial to focus more on key accounts rather than over-investing in new client acquisition.

The power of incumbency

One of the standout findings from the CBX report is that incumbents have a significant advantage in the buying journey. In 2024, 66% of buyers chose their incumbent providers, up from 46% in 2021. This preference is driven by a sense of familiarity and trust that existing providers have built over time. For ABM strategies, this means allocating more resources towards nurturing and retaining key accounts can lead to higher returns on investment.

Barriers to switching

The report highlights two primary barriers to switching providers: high switching costs and integration issues. Over 70% of respondents cited these concerns, which could explain why only a minority of clients consider themselves advocates for their current providers. This presents an opportunity for marketers to focus on improving integration and reducing switching costs as part of their ABM efforts.

Increased caution in decision-making

With the complexity and cost of solutions increasing, buyers are becoming more cautious. They are researching an average of nine vendors, nearly triple the number from 2018, and shortlisting 3.5 vendors on average, up from 2.1 five years ago. Early positioning of content and presence is therefore crucial in influencing decision-makers early in their buying journey.

The growing role of generative AI

Generative AI is becoming an essential tool in the buying process. The report shows that 50% of buyers use generative AI to mitigate risks, analyze provider information, and accelerate deals. This trend underscores the need for robust, accessible content that can be effectively utilized by AI tools to influence buyers' decisions.

Tailored messaging and thought leadership

The importance of personalized messaging and thought leadership cannot be overstated. As an incumbent provider, leveraging your knowledge of clients and the industry can place you top of mind during the decision-making process. The CBX report emphasizes that thought leadership is critical for building trust and standing out as a preferred choice. Senior leaders engage with thought leadership that offers strong analysis and data, making it a strategic investment for ABM.

Innovation and client engagement

Innovation remains a key driver for clients. The report indicates that clients leave in search of new ideas and solutions. Activities like executive briefing centers (EBCs) can enhance client understanding and showcase long-term partnership value. Nearly 72% of respondents who attended an EBC felt better informed about the latest trends and developments.

About the Client Buying Index

The 2024 Client Buying Index provides comprehensive insights into enterprise buying behavior, drawing from a global survey of 354 business leaders. The findings highlight the need for a shift in ABM strategies towards greater emphasis on existing clients, personalized content, and innovative engagement. By realigning ABM budgets and focusing on key accounts, marketers can drive better ROI and foster long-term client relationships.

In our latest webinar – Stand by me: Why it pays to invest in current clients over new logos, I dig deeper into these findings alongside Jodi Lebow and Editorial Lead at Momentum ITSMA, Hannah Gresty. Watch on-demand here.