As account-based marketing (ABM) continues its rise in B2B marketing prominence, marketers who hope to find success must learn how to adapt to the nuances of an account-based system.
When it comes to measurement and analytics, if marketers continue to use the same metrics and goals that they used for demand generation, organizations will not see the success that they expect.
In the 2016 ABM Metrics Survey, we asked marketers what their primary metric for ABM success was. The wide range of answers show that there is still quite a bit of confusion.
While the plurality of respondents said that revenue was their primary metric, nearly half said that they use either engagement metrics or opportunity conversion as the primary metric of success.
Clearly, there is some confusion around the best way to measure and analyze ABM success.
ABM Analytics: Indicators vs. Goals
I’ll be pretty straightforward with this: revenue should be the primary goal for all marketing. Whether you are doing demand generation or account-based marketing, the goal is to generate revenue and make a positive impact on the bottom line.
That is the goal. Everything else is an indicator for revenue.
These indicators, however, are still important. And this is where the differences between ABM and other strategies come into play. To figure out which indicators are important to measure for ABM, let’s take a look at what we call the Unified Triangle of Success:
The Action phase in ABM revolves around orchestration tools -- identifying target accounts, determining the right people in those accounts, and then serving them highly targeted ads.
The Response phase is measuring the engagement. Are people reacting positively? Are they taking the next step?
And finally, the last phase is achieving the outcome or goal, which in this case is generating revenue.
What makes this triangle effective, however, is that it’s cyclical -- it doesn’t end at the outcome. Just like the previous phases, to make effective use of ABM analytics, the data from the Outcome phase must be used to impact the next phase. In this case, marketers need to use their revenue data to impact their future ABM execution.
In the well-known ABM fishing metaphor, this phase is the spear. These are the tools to execute ABM. How do you identify your targets? What personas within target accounts do you want to reach? And when you execute, how do you that you are reaching these people?
The metrics in this phase include click-through-rates (CTRs), conversion rates, net new contacts/accounts, etc. These are really high level indicators of downstream revenue. Because they are so high in the funnel, they are not very accurate proxies for revenue. There are still a ton of steps remaining to get to revenue at the bottom of the funnel.
In the next phase, we will discuss indicators that are a bit lower in the funnel, and are more indicative of goal achievement.
Continuing the fishing metaphor, the Response phase is the fish finder. Once you know what you’re looking for and have the tools to engage, you need to go find them.
This phase contains the bulk of the key indicators. The deeper you get into the funnel - closer to revenue - the better the indicator is. For example, web visits are one of the highest indicators in the funnel. You get a lot of them, but they don’t mean very much because they are a poor indicator of downstream revenue. On the other hand, sales opportunities are a much more accurate indicator of revenue, but there is a much lower volume compared to web visits.
With that in mind, there are a few response metric indicators that we find to be useful in ABM measurement.
The first is Marketing Qualified Accounts (MQA). Similar to MQLs in demand generation, MQAs have engaged, and based on certain firmographic characteristics (e.g. more than X employees and is in X industry), pass a qualification threshold.
Another key indicator is the Account Engagement Score. Using an algorithm to predict the likelihood that an account will convert to a customer, account engagement scores wrap up the success or lack of success of ABM efforts for any particular account and inform both the marketing team and the sales team of the best next step. If the score indicates that the account is ripe for the sales team (i.e. many key personas within the account are highly engaged and deep in the funnel), the sales team know to reach out to them. On the other hand, if the score indicates that the account is not yet ready for a sales representative to reach out, the marketing team knows that they need to engage them further.
Pipeline and Pipeline Velocity are also good indicators that your ABM efforts will pay off. Once accounts have reached the opportunity stage, there are a lot fewer requirements and hoops to jump through until the account becomes a customer. Forecasting the conversion from opportunity to customer tends to be much more accurate than lead to customer, for example. Furthermore, if your efforts can create momentum and increase pipeline velocity (decrease the time from lead to opportunity), the more likely you will close accounts and bring in new customers.
The last indicator is Win Rate. This calculates what percentage of all closed deals within a time period were closed-won. If ten sales opportunities closed this month and five of them were closed-won deals, your win rate would be 50%. You can also calculate win rates for a variety of pivots. What is the win rate for opportunities that had Event touchpoints? What is the win rate for opportunities that read X ebook or Y ebook?
To finish off the fishing metaphor, the outcome phase is the scale. This is where you weigh the fish to see ultimately measure whether you were successful.
As discussed earlier, the outcome phase is measured in terms of revenue. You’ve identified the target accounts that you want to engage, you’ve made contact (ideally both on the marketing and sales side), and now you get to see what you’ve brought it in terms of revenue.
Were your efforts successful? Did you achieve your goal? Did the revenue from new customers generated outweigh the costs of pursuing your target accounts?
Using Revenue Data To Refine Your ABM Strategy
Marketing efforts are not a one-off deal. Therefore, you can take the revenue data and feed it back into the system and make the other phases more effective. That’s the beauty of the unified triangle.
Once the fisherman has caught the fish and weighed it, he can put that information back into the system so that next time he searches for fish, he has even richer data. If the fish finder led him to catch only small fish, he would maybe want to search elsewhere for larger fish. If he caught big fish, he would want to know to go back to the same place and use the same methods in the future.
Just like the fisherman, if ABM indicators like pipeline velocity or win rate leads a marketing organization to keep chasing smaller deals, they would want to adjust the algorithm or strategy based on revenue data. Revenue is the key measurement that should drive strategic change.
Indicators like engagement, win rates, or velocity are important leading indicators. But alone, they won’t win you the fishing contest. To win, you need to focus on the goal of ABM: revenue.