7 Account Based Marketing (ABM) Metrics You Should Be Tracking
Successful account based marketing is widely considered the holy grail of B2B marketing — it takes a hyper-personalized approach to identifying and converting the right prospects for your business. ABM metrics measure the effectiveness of this strategy, and they require an equally nuanced approach.
Measuring the right account based marketing metrics can make or break the success of your ABM strategy over time — they tell you whether you’re targeting the right prospects, spending the right amount of money on marketing and sales, and providing a quality buyer (and then customer) experience.
Companies that successfully execute an ABM strategy earn results that are hard to ignore. According to recent research from Forrester and Rollworks:
- 72% of B2B companies experience higher customer loyalty and profitability
- 58% are seeing larger deal sizes
- 65% are seeing increased opportunity volume, quality, or both
- 68% are experiencing shorter sales cycles
- 61% have realized more efficient use of marketing and sales resources
Achieving these results requires continual and accurate measurement of ABM metrics to enable real-time strategy development, adjustment, and improvement. In the sections that follow, we’ll cover 7 account-based marketing metrics you should be tracking to maintain a successful ABM strategy for your B2B business.
- ABM benchmark metrics focus on both lead quality and quantity.
- The three Rs of strategic marketing — reputation, relationships, and revenue — are considered core ABM metrics for B2B companies.
- Total addressable market and accounts in-market uncover existing sales and revenue potential within your industry.
- Win rate is a straightforward ABM metric that measures how well your strategy is converting prospects to customers.
- Comparing customer acquisition cost and customer lifetime value shows you whether or not your ABM strategy is yielding long-term profit.
- It’s important to measure ABM metrics post-sale (i.e. retention and customer satisfaction) to ensure your sales efforts are translating to customer success.
How is measuring ABM different from traditional marketing metrics?
The hallmark of account based marketing is its focus on quality rather than quantity. When you implement an ABM strategy, you’re focused on converting at a higher rate by pursuing leads at a lower volume, but that fit squarely within your ideal customer profile.
Rather than quantity-based metrics such as total number of qualified leads, ABM metrics are more about your ability to take a tailored approach to each individual prospect. ABM flips the funnel upside down to target the right accounts before they enter your pipeline, rather than weeding them out from a large number of leads generated by mass-marketing.
Because ABM is so individualized, it can be difficult to standardize metrics and reporting criteria. It requires a shift toward metrics that indicate correct targeting, an optimized buyer experience, and long-term customer satisfaction.
7 Account Based Marketing (ABM) Metrics You Should be Tracking
There are technically three metrics to cover here, but they’re generally discussed as a package: reputation, relationships, and revenue. Considered central to ABM success, these three Rs indicate whether or not your overarching ABM strategy is working. They answer key questions like:
- How is your brand viewed by market stakeholders (buyers, customers, competitors, peers, etc.)?
- Is your ABM strategy facilitating stronger relationships with prospects and customers?
- Is your ABM strategy accelerating revenue opportunities for your company?
Most B2B companies report that their ABM strategy has led to improvement in some or all of these three areas. If you aren’t experiencing similar results, it may be time to revisit and revamp your approach.
Total addressable market
Your total addressable market (TAM) is the total existing market demand for your product or service. Calculating this metric helps you understand how much of the market you’ll need to capture in the form of ABM-won sales in order to meet revenue goals.
There are a few ways to calculate TAM:
- Top-down approach – Uses industry data to discover existing demand in various market segments across your industry
- Bottom-up approach – Looks at historical sales averages and multiplies them by the total number of potential customers in your market
- Value-based theory – Considers how much potential customers may be willing to pay for your product now and in the future
As a secondary ABM metric to total addressable market, you’ll want to measure accounts in-market to understand how many companies are actually showing buyer intent based on their current actions and engagements.
Measuring accounts in-market enables you to set accurate goals and make accurate forecasts related to the number of closed deals during a specific time period. The surest way to measure this metric is with intent data, ideally delivered through an AI-powered intent data platform.
Perhaps the most obvious metric to measure in any marketing and sales strategy — ABM included — is your win rate. By definition, win rate is the percentage of deals in your pipeline that you close as a sale. It’s a simple and straightforward way to evaluate your strategy’s effectiveness.
ABM can give your win rate a boost — 86% of marketers recently reported improved win rates as a result of ABM. If you’re launching a new ABM strategy or revamping your existing one, look to your win rate to indicate whether it’s working.
Customer acquisition cost
Because of its highly individualized nature, ABM often naturally incurs higher costs than mass marketing tactics. It’s important, then, to closely monitor customer acquisition cost (CAC) and how it compares to customer lifetime value (which we’ll cover next).
Customer acquisition cost can be calculated by adding the total cost of marketing and sales, then dividing it by the total number of new customers acquired.
You can reduce CAC by taking standardization measures whenever possible without sacrificing the quality of the buyer experience. For example: if you create standardized sales enablement materials tailored to each of your top ABM customer segments, your sales team can spend less time curating and creating content for each lead.
Customer lifetime value
Customer lifetime value (CLV) is the total amount of money a customer spends during the lifetime of their relationship with your company. CLV indicates whether the time and financial investment you put into customer acquisition yields profit for your company long-term.
To calculate customer lifetime value, you first need to calculate customer value — the average purchase value multiplied by average purchase frequency rate. Then, to get CLV, you multiply that product by the average customer lifespan.
To evaluate how well your ABM strategy is driving profit, compare your CLV to CAC ratio. If your ratio is 1:1 or less, you’re not earning profit (and may be losing money). Most B2B companies aim for a healthy CLV to CAC ratio of 3:1.
It’s important to continue measuring ABM metrics even after you close the deal. CLV is one of the most essential post-sale metrics to measure, but customer satisfaction and customer retention rate are two others to consider making part of your ABM performance evaluations. In the end, you want to be sure that the effort you put in pre-sale is translating to a quality customer experience and continued revenue growth for your company.
Over to You
An ABM marketing strategy is most effective when complemented by strong outbound marketing tactics that generate the right leads for your company.
Revboss’s outbound email software and lead generation services are custom-built for startups, consultancies, marketing agencies, and other B2B organizations.
Schedule a quick call with us and find out how we can help you win more clients.