Boardrooms have long been battlegrounds for sales and marketing teams pleading their case for the most valuable department of any business. Account Based Marketing (ABM) coupled with the right ABM metrics may have an answer for the historic feud.
In one corner, marketers argue without their efforts there would be no leads to convert into sales. Pointing to audience engagement and attribution metrics to show how their marketing activities drive revenue.
Sales teams have the power of conversion to make their case stating that without their skill set, no leads would ever close. Not to mention the inevitable accusations of poorly qualified leads being passed on from marketing that sales won’t even bother with.
Many executives struggle to keep peace between the two organizations. Account-based marketing (ABM) attempts to mend those broken relationships and align sales and marketing teams with both functions playing an equally important role. The holistic approach is gaining traction according to the 2020 State of ABM Report, over 94 percent of respondents have an active ABM program.
Why Does ABM Work?
According to HubSpot, ABM is all about bringing sales and marketing together to create personalized buying experiences for a mutually identified set of high-value accounts. These accounts are often ideal customers that have most likely already engaged with your organization or your brand and are displaying behaviors that show they’re ready for purchase. In other ABM strategies, organizations choose to focus on landing those larger lookalike accounts or rather businesses that are quite similar to existing customers for an additional revenue opportunity. In either case, sales and marketing work together to come up with that list of target accounts they want to go after.
By focusing only on those identified, high-priority target accounts, marketing can then hone in on campaigns and tactics that are tailored to that prospect with a mutually agreed-upon budget with sales. In return, the buyer receives a consistent experience with communications, interactions and personalized content for them. This seamless customer experience results in greater ROI and helps to streamline the sales cycle. By focusing on customers further down the buying journey and not wasting efforts on experimental tactics to bring in a large pool of early-stage or irrelevant leads that may never end up being qualified, marketing can be assured sales will follow up.
ABM makes sure sales and marketing are always working towards the same goals. But how do they tell how well these programs are performing? After all, each team will still want to make their case for bringing value to the organization.
Marketing Versus Sales Metrics
Marketing and sales teams have traditionally measured success very differently. While marketing will point to the number of leads brought in and opportunities opened, sales teams will look at their contributions to the organization’s pipeline and overall revenue as signals for success.
The biggest difference between ABM and traditional lead generation programs is that the measure for success is about quality, not quantity. By focusing on ideal, targeted accounts rather than casting a large net for leads of all kinds, organizations are engaging with a smaller number of the right leads.
This means that traditional metrics like conversion rates don’t apply to measuring ABM success but that doesn’t mean there aren’t other metrics to accurately gauge the effectiveness of an ABM campaign.
ABM Metrics That Matter
Tracking performance is crucial to both sales and marketing functions. When executing an ABM strategy, there are a few ABM metrics to measure that will help benchmark strong performance and ensure future campaigns are set up for success.
1. Data Coverage and Quality
A key theme that has emerged in account-based marketing is the notion that businesses are buying in teams rather than an individual pulling the trigger on a purchase. Members from various departments spanning HR to finance now weigh in on the purchase, so a good ABM strategy should look to speak to each role individually which requires in-depth intelligence on your target accounts.
This means researching and capturing the right contact information for the entire buying team at the target account and understanding what level of decision-making power each of those members has.
Establish how complete your knowledge is of your target accounts to identify any information gaps in a certain company, sector or business function and focus resources on filling in those gaps. This can also help identify where you need to build out specific content to address the pain points of each individual in the buying team.
2. Target Account Awareness
When deploying ABM campaigns, it’s great to understand how your target accounts have interacted with your brand in the past to reflect how well your contacts understand your solutions. Accounts that don’t know you are unlikely to purchase from you.
Tracking their level of awareness can look at metrics like your web traffic and visits to your site but it can also dive deeper into email click-throughs and time spent reading your content. Perhaps you’ve interacted with them at trade shows or they’ve seen a product demo in the past. Understanding their level of awareness will also help you identify the right content to serve up throughout the ABM campaign depending on what stage your accounts are in the buying journey.
3. Buying Team Engagement
Engagement is where the sales really come to life—it’s the interaction that deepens the connection between your prospects and your brand. It’s about building a lasting relationship not only for an individual sale but for long-term loyalty and brand trust.
The more time an account spends researching or interacting with your brand, the more committed they are to purchase and the more time and attention you should invest in that account. According to Demandbase’s ABM Engagement Master Class, 60 percent of buyers who feel a higher brand connection are more likely to purchase, even at a higher price than competitors.
Measuring engagement can be complex and will depend on the tactics used throughout the campaign but a few starting points to look at could be:
- Introductions the contact makes to other members of the buying team
- Proactive engagement with your social media accounts
- Interactions with the sales team, meetings scheduled and time spent on calls
Digital engagement is also crucial to measure and this can look at email opens, content downloads, survey fills or newsletter sign-ups. Assigning a scoring system to each engagement metric can then help you prioritize accounts based on the time or the sheer number of interactions the target contacts have had with your content or your sales team.
4. Channel Reach
Again because ABM is not looking at the total addressable market but targeted accounts, assessing channel reach is all about trimming the fat in the marketing campaign by looking at where efforts were wasted and target accounts did not engage. Having an ABM campaign with lots of activity can look great on the surface but if that activity didn’t reach the right prospects, was it really successful?
It’s a simple exercise to determine if you were successful in reaching your target accounts and then comparing content types and channels to determine which were the most effective ways to reach those accounts. It also helps determine which channels were generating the most engagement amongst target accounts to streamline future campaign efforts and figure out where to allocate resources.
5. Sales Influence
It’s now time to focus on the numbers and track the total live pipeline with ABM program influence. It’s difficult to apply traditional attribution models to longer sales cycles so instead focus on which activities generated the right results. This can mean reporting on the percentage of total target accounts that have engaged, moved into an open opportunity or the ultimate goal, became a closed-won deal.
Each organization might have different methods for customizing the stages of this new ABM funnel but the most important thing is to have alignment from internal stakeholders, beyond just the sales and marketing teams, to understand this alternative way of reporting on the pipeline.
There are a couple more ABM metrics that can help illuminate ABM’s impact on revenue beyond looking at the accounts in the pipeline.
Sales Cycle and Deal Velocity
Deal velocity is valuable within an ABM metric strategy as it determines how fast the revenue is flowing in. It helps you understand the sales cycle length and how changes to the ABM strategy or account targeting parameters can change this critical metric.
To accurately account for deal velocity, several factors must be accounted for, including the number of accounts that the sales team is working on, the average deal size, conversion rates and timing.
Follow this equation from Altudo to calculate sales velocity by multiplying the number of leads with average deal size and conversation rate and then dividing by conversion time.
When deal velocity is measured accurately, it can inform data-driven ABM planning and increase marketing-attributed or -influenced revenue.
Average contract value (ACV) is an ABM metric that has similarities to traditional B2B analytics such as customer lifetime value (CLV) or average deal size. Measuring average contract value can provide insight into profitability for strategic ABM planning and can be easily formulated by dividing total customer contract value by total new customers.
Use ACV to track changes in the value of a new closed-won account during your sales process and if an account is a good fit to introduce to higher-value products. Doubling an existing deal is just as good as a net new account after all. Analyze how each marketing channel is affecting ACV to refine your approach for the remaining quarters.
Establishing a metrics engine for your ABM strategy will help your organization uncover the right marketing activities to employ to drive higher revenue. Marketing and sales teams come together with a new purpose and common goals that allow both to contribute tremendous value to the bottom line.
It is critically important to create a solid foundation of data before diving into ABM execution to set you on the right path to track these ABM metrics accurately. Investing in the right data platform and reporting/insights to better understand your target accounts can be a crucial first step in setting you up for ABM success.