Account-Based Marketing (ABM) offers an exhaustive list of benefits for most businesses.
A list of the latest ABM statistics shows that companies that utilized this strategy saw incredible results including:
- Up to 200% higher ROI
- 30% boost in revenue
- 66% increased the number of leads generated
- 83% saw increased engagement from targeted leads
- 50% of teams were more productive and able to optimize their time on qualified leads
- Shorter sales cycles with a 27% quicker trajectory in profit growth
However, these kinds of benefits are only the results of a successful ABM approach – which is by no means an easy task for every organization. The only way to actually ensure that your business’s efforts in relation to ABM are successful is to closely monitor the most important metrics that signal progress.
Accurately measuring the ROI for ABM — or pretty much any marketing strategy — has always been an incredible challenge for businesses of all shapes and sizes. Some argue that there is too little data to base an opinion off of while others are drudged down by so many metrics that they don’t know where to begin.
The best way to really get a firm understanding of the success of a company’s ABM strategy is by knowing which metrics to track and how to properly arrive at KPIs.
There are two types of ABM metric groups: Acquisition and Expansion. Acquisition refers to the number of new leads and conversions achieved by targeting prospects and accounts, while Expansion measures the number of repeat customers and the growth in customer lifetime values (CLV).
Within these two main metric groups are key sub-metrics that need to be accurately measured and monitored in order for marketing teams to truly understand how effective their strategies truly are.
1. Website Traffic from Targeted Accounts
Let’s start with the acquisition metrics. Increasing your website traffic is a key sign that your marketing efforts are paying off, but only if your website visitors are spending a significant amount of time on your website. If traffic numbers are high but so are bounce rates, then it might mean that you are not properly attracting relevant audiences. This is why monitoring website traffic growth from targeted accounts is a far better way to determine any real improvements.
Your marketing team can match IP addresses with specific accounts (using reverse IP lookup tools). These IP addresses can then be tracked so that all of your targeted accounts interactions are monitored. Other ways to segment and target include creating cohorts based on demographics and browsing history.
If there is a significant increase in the number of targeted accounts visiting your website, then it is a clear sign that your business is successfully increasing awareness and funneling in more leads.
In order to determine the exact percentage of your website traffic is from targeted accounts, you just need to follow this simple formula:
# of visits from targeted accounts x 100 / total # of visits
2. Target Account Reach
Some target accounts are more valuable than others simply because of their relevancy or because of their position as a decision-maker for their organization. Although your marketing may be reaching the majority of your targeted accounts and bringing them into your site, it doesn’t necessarily mean that sales will follow.
Target account reach helps you understand where your ABM efforts are producing the greatest returns by measuring the percentage of key decision-makers engaged. You can take things a step further by using this metric to assign attribution to determine the specific types of content that are generating the best results.
In order to calculate this metric accurately, your team will need to know which targeted accounts can be considered decision-makers, so good account data is needed. This metric is calculated by:
# of decision-makers engaged / total # of decision-makers at a target account
3. SQA and MQA Pipeline Growth
Growth in the number of MQA (Marketing Qualified Accounts) and SQA (Sales Qualified Accounts) is another way for both your sales and marketing teams to see how an ABM approach is helping the organization as a whole.
Many B2B teams track MQLs (Marketing Qualified Leads) and SQLs (Sales Qualified Leads), but in order for these to turn unto qualified accounts, they must hit certain pre-determined engagement qualifications based on behavioral activity – such as signing up for a webinar or downloading online content – that signal likelihood of a conversion.
In order to figure out the number of MQAs and SQAs that are coming as a direct result of ABM, use the following formula:
# of MQAs or SQAs / # of correlating MQLs or SQLs
4. Sales Velocity
Perhaps the ultimate goal of any marketing strategy, ABM or otherwise, it is increase sales.
Since ABM has been shown to significantly shorten the sales cycle and generate more leads, it would make sense that a successful strategy would have a higher rate of sales.
Sales velocity can help your team determine exactly how their efforts are influencing revenue. Marketers can also break down each content channel and activity to better understand which campaign is making the maximum impact. This metric is calculated as follows:
total # of opportunities x average purchase size x conversion rate / sales cycle length
5. Cross-Sells and Upsells
We now come to the expansion metrics. ABM marketing is not just useful for funneling in more leads – it can also influence client relationships, which in turn improves the CLV. Marketing targeted accounts should not end after their first conversion, and marketers should be well aware of how their marketing is influencing current customers.
Cross-selling and upselling customers with additional or upgraded products and services is a straightforward way to increase the CLV and create more repeat customers. Teams using an ABM approach should ask themselves how they are trying to increase order values with additional sales and how many accounts are purchasing cross-sells or upsells.
By calculating this number, you will be able to understand how effectively your company is building relationships with customers, especially post-sale:
# of customers who purchased a cross-sell or upsell / total # of customers
6. Referral Quality and Net Promoter Score (NPS)
Customer referrals are extremely beneficial to businesses. A Nielsen Harris Online Poll found that 67% of consumers are more likely to convert if they were referred to a business from a friend or colleague. Your marketing team should be focused on whether or not your ABM efforts are influencing the number of referrals that are coming in, as well as the quality of these leads. The ratio of referrals who convert can be measured by:
# of referred customers/total # of customers
The NPS for an account will let you know how satisfied they are with your product and how likely they are to recommend it to others. It is usually measured on a scale of 0 to 10 or -100 to 100, labeling customers likely to exhibit value-creating behavior as “promoters,” neutral ones as “passives,” and unsatisfied ones as “detractors.” The final score is calculated as:
% of promoters – % of detractors
7. Retention Rate
Repeat customers tend to be far more valuable than first-timers and they also cost far less to sell again to. Business with a successful ABM strategy reported 36% higher retention rates on average.
If the gap between the total number of conversions and the number of repeat customers is quite significant, i.e. your retention rate is low, then your “churn rate” is high. Therefore, if your numbers aren’t improving over time, it could be a sign that you’re failing at cultivating relationships with target accounts after the initial sale.
Therefore, understanding how your ABM strategies are influencing customer retention is extremely important to determining the actual ROI. Figuring out the retention rate is quite simple:
# of repeat customers / total # of customers
The Perfect Formula Remains Elusive
There is no one right formula, approach, or blueprint to follow, which will make your business strategy an absolute success. It takes time, adjustments, and patience – but eventually, you start to discover the methods and tools that work best for your business and your audience. Just make sure you
- Define KPIs
- Keep measuring metrics
- Experiment and tweak strategy to improve KPIs
The most important thing here is monitoring your campaigns constantly (automation can help!) and identify your drawbacks.
What metrics do you track for ABM success? How does your business calculate ABM ROI? How do you change tack if things aren’t working? Care to share in the comments?
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