With the advancements in B2B marketing in recent years, more companies are adopting the hyper-personalized approach of account-based marketing (ABM). Due to its targeted approach, ABM continues to be one of the most successful and preferred marketing solutions as far as B2B businesses are concerned.
Marketers have reported witnessing a drastic increase in the conversion rate as well as in the overall ROI after incorporating ABM into their existing sales and marketing strategies. However, the bottom line of an ABM campaign involves measuring and evaluating the campaigns in order to track their performance and optimize them for better results.
While many companies are effective when it comes to strategizing and executing ABM campaigns, when it comes to measuring the results, they tend to lack the same efficacy. This undoubtedly impacts the overall marketing efforts and its future in the company.
Account-based marketing examines two sorts of data: funnel metrics and account behavior, as well as business results and profit. In the coming sections we will delve into how these are used in effectively measuring ABM performance
Traditional marketing methods were built on quantity-casting a broad audience. ABM, on the other hand, by definition is personalized, though it can be used to target multiple accounts at the same time. ABM usually begins with a prospect at a high-value organisation and then it is used to try to extend your relationships within that organisation, it's commonly referred to as "reversing the funnel."
Because ABM prioritises quality over quantity, KPIs like net additional leads, marketing-qualified leads (MQLs), and conversion rates aren't relevant. You should also maintain a strategic distance from visitor-centric metrics like page views and impressions. When separated by account, this data can be useful for indicating engagement, but it's hard to engage within your pipeline. Every level of the funnel has ABM metrics, so you can begin demonstrating your pipeline effect right away. Although channel-specific data is essential, you should also measure general campaign metrics to see if your ABM initiatives are effective.
There are two common frameworks that marketers use to measure an ABM campaign:
Activity-based metrics are easy to track and include operations like the number of cold calls or discovery calls made per day. By evaluating these metrics, your sales and marketing teams can set goals for the future as well as optimise current initiatives.
Outcome or result-based metrics include certain measures like ROI, average deal size, and more that are driven by the business results of a certain campaign. Tracking outcome-based metrics is important for businesses to evaluate the effectiveness of a campaign or to compare a new campaign with a previous one.
Below are some of the key metrics that are crucial for determining the success rate of an ABM campaign.
The time taken for a lead to progress through the stages of your pipeline is known as "pipeline velocity” i.e. how much time does it take for a lead to convert to an opportunity and an opportunity to a customer. Are leads generated ABM faster or slower than what was previously observed. If ABM isn't helping to accelerate this process, it's necessary to reconsider your strategies and target accounts. Considering the velocity of your pipeline is critical for a data-driven strategy. There are several methods for determining pipeline velocity:
The formula to calculate the pipeline velocity is:
(Number of opportunities x average deal size x conversion rate) / Sales cycle length in days
The duration of the B2B buyer's journey is the first factor to consider. Depending on the intricacy of the acquisition, decisions are made over several weeks or months. Whenever a potential contract appears to have stagnated, however, it can be difficult for salespeople to retain long-term engagement. Because your sales staff are frequently responsible for several clients, it's possible for less active contacts to be lost in the rush.
You may also determine the velocity of revenue possibilities within the high-value account's pipeline in building a pipeline acceleration campaign. When technology is used to enhance the number of touchpoints while also customising the interaction for each contact, this is referred to as acceleration. Measuring these touch locations gives you immediate feedback on how to improve the process.
Like pipeline velocity, the influenced pipeline is another key metric to evaluate the success potential of a particular ABM campaign. This metric determines whether or not the targeted accounts in your pipeline are impacted by your ABM initiatives at any given moment. This metric is quite straightforward to measure as it only requires businesses to determine whether their marketing efforts have influenced the accounts by any channel at any stage of the funnel. The influenced pipeline metric enables us to analyse ABM strategies and channels and if they are having a positive impact on the accounts. A proper evaluation of this metric helps businesses to eliminate the requirement of creating complex models in order to determine the channels that provide a certain degree of influence on acquiring a lead.
This metric in ABM is used to calculate the number of transactions closed or not within a particular time frame. The deal close rate is usually calculated using the following formula:
Win ratio = deals closed / (deals closed + deals lost)
The high percentage of this metric reflects two crucial aspects of your campaign:
Due to the average duration of ABM campaigns, the effectiveness of this metric can only be evaluated after the conclusion of the campaign. However, the deal close rate metric can be highly effective in terms of comparing the performance of two different ABM campaigns.
Irrespective of the type of marketing campaign, the ROI metric is relevant and important in order to measure the performance of the entire campaign. The ROI metric assists businesses to determine whether to increase the usual deal size or reduce the expenses related to ads—among other considerations. The ROI metric basically mirrors the effectiveness of a particular ABM campaign, which is why the importance of this metric goes without saying.
The ROI of a campaign also helps in determining new campaigns by comparing them to the past data of previous ones. You can easily make a rough estimate of various aspects of a campaign, such as the amount you should be spending on average or whether a campaign is effective enough compared to the previous campaigns. Evaluating this metric properly will help you determine whether a campaign is worth continuing or not, apart from any requirements for modifications.
Content engagement rates determine the effectiveness of various types of content, personalised for each account. The accuracy of your account selection and the effectiveness of content personalisation can be reflected through the percentage of engagement rates. In order to track the content management rates, there are certain aspects to consider, including content viewability, ad engagement rates, email marketing metrics, and lastly, content conversion rates.
In general, targeting high-value accounts requires longer sales cycles since several stakeholders might be involved in making the final decision. Contrary to traditional marketing, in ABM, the sales cycles are generally shorter due to the hyper-targeted approach of this B2B marketing strategy. However, it is crucial to track the length of each account’s sales cycle in order to optimise the process of closing a deal. Divide the entire duration of each sale completion by the total number of transactions to measure the average sales cycle length.
Similar to any other marketing initiative, tracking ABM campaigns will allow you to avoid high marketing expenses, analyse the performance of the campaign, and measure the profit potential. Make sure to set up a framework to track and monitor the engagements, activities, and outcomes of your campaign before implementing the strategy. Only through effective evaluation of the campaigns can businesses make decisions regarding their marketing strategy.