Account Based Marketing KPIs: How are they effective?

ABM (Account-Based Marketing) is a strategic approach to marketing that focuses on targeting specific accounts or organizations, rather than casting a wide net to attract a broad audience. 

When it comes to measuring the success of an organization’s ABM efforts, there are several key performance indicators (KPIs) that can be useful metrics:

1. Total available market
2. Account engagement
3. Deal size and revenue
4. Conversion rate
5. Customer retention and expansion
6. Pipeline velocity
7. Customer lifetime value
8. Churn rate
9. Return on investment

Let us understand each type of KPIs in more detail:

1. Total available market

The success of account-based marketing campaigns doesn’t lie in what kind of account information you generate. It lies in how well you leverage that information. 

Account coverage is a metric that shows you the gap between the information you have on each target account and the impact you create with that information. If you have identified the key stakeholders and decision-makers, and have personalized content for each of them during their journey, there’s no reason for the content to not make an impact.

The next thing to look for is whether you are engaging all the stakeholders at the account. Most marketers also say that your contact list should keep growing, because that would indicate you are expanding your impact. While that’s true in general, do not spread yourself too thin and waste resources in trying to engage people who have no role in the buying decision.

The two key ratios to look for are:

• Number of perfect-fit accounts you have begun engaging, as a percentage of total perfect-fit accounts you have been able to identify, and
• Influencers and decision-makers you’re currently engaging, as a percentage of the total influencers and decision-makers at the target account

Tracking the total available market as an ABM KPI provides insights into the scalability and growth potential of your ABM program. 

2.  Account engagement

Your engagement rates are a very quick, high-level measurement to get a general sense of how things are going with your content. 

The term is so broad it could be considered a group of ABM KPIs rather than one single metric. Engagement will cover the extent and quality of your target account’s interaction with your content, which includes your emails, ads, ebooks, website pages, webinars, podcasts, blogs, and other similar assets.

Here’s what you want to ultimately figure out:

• How (and if) your target accounts are interacting with your content
• What kind of content is pulling in more new accounts
• Which piece of content is working and which isn’t
• What kind of content do your existing customers like
• Define what exact action you’ll call engagement

Remember, the better the engagement rate of a particular account, the closer they are to making a decision about the purchase. That means your account-based marketing campaign is working. Conversely, poor engagement could indicate either a lack of adequate personalization or poor content-account match. 

Because there are multiple touchpoints in B2B sales, you will need to dive deeper to uncover all the places you need to make improvement.

This metric measures the level of engagement and interaction between your organization and the target accounts. It can include metrics such as: 

• Website visits
• Content downloads
• Email open rates
• Social media interactions

Tracking account engagement helps you gauge the interest and involvement of your target accounts.

3. Deal size and revenue

If you want to find out what is ABM match rate, the average deal size is a great metric to study. That’s because your ABM deal size should be bigger than the average contract value or deals your regular marketing activities bring in. So if you have done the right homework for your ICP and all that, your ABM campaigns should result in bigger deals.

By tracking the average deal size and revenue generated from target accounts, you can measure the impact of your ABM campaigns on the bottom line.

4. Conversion rate (Win Rate)

What is ABM technique if not a strategy to increase your ticket size and improve your win rates? Keeping a close watch on how many customers actually sign on the dotted line is certainly a very effective way of measuring and even learning from a successful ABM strategy.

This is one metric that can tell you a number of things.Are your pieces of personalized content actually resonating with your audience? Are the clicks on your websites actually translating into sales? Are your sales and marketing teams truly aligned and translating MQLs (marketing qualified leads) into SQLs (sales qualified leads)? Are all the efforts actually paying off?

Your conversion rates also tell you about your overall efficacy. Are your win rates going up or stagnating? Which competitors do you routinely lose business to? What product categories or geographical segments have you never failed to win?

Tracking the conversion rate as an ABM KPI provides insights into the effectiveness of your account-specific strategies.

5. Customer retention and expansion

No collection of ABM metrics can be said to be complete without Customer Retention Rate. Yes, ABM conversion rates are the one metric you should always keep your eyes on. But don’t forget to retain existing customers. 

We don’t need to remind you that acquiring a new customer is 5x more expensive than retaining an existing customer, do we? And because B2B sales take more time than B2C, you have a larger window within which to reinforce your relationship and keep the customer stay with you.

You engage differently with existing customers than you do with new accounts. For example, to customers who are already using your solutions, you can ask for their feedback. How happy are they with your solution? What is the overall adoption of your solution in their organization? Are there features they aren’t fully using?

And because they’re already using your solution, you have a tremendous lead. So don’t forget: you should always watch out for cross-selling and upselling opportunities to existing customers. After all, retention doesn’t mean you should stagnate; as the customer grows, make sure your sales opportunities grow too.

ABM is not just about acquiring new customers but also nurturing and growing existing accounts. 

Some of the  Customer retention and expansion metrics include:

• Churn rate 
• Upsell/cross-sell revenue
• Customer satisfaction scores

They can provide insights into the success of your ABM efforts in building long-term customer relationships.

6. Pipeline velocity

Shortening the sales cycle and accelerating sales is a key goal for ABM. Between the first touchpoint and the last, you should be able to drive your target account at a faster pace. In simpler words, you want to know how soon a target account converts into a paying customer.

Under ABM, you align your sales and marketing teams to increase the sales velocity. Forrester says companies with a strong alignment grow 19% faster. Marketing teams can keep a tab on how engagement is growing across different channels. Sales teams can keep track of the speed of conversion. 

And in the entire process, you want to pay more attention to where there’s friction and what you’re doing to eliminate that friction.

Pipeline velocity refers to the speed at which leads move through the sales pipeline. In an ABM context, it measures how quickly target accounts progress from one stage to another in the buying process. 

7. Customer lifetime value (CLV)

Customer Lifetime Value (CLV) is a crucial Key Performance Indicator (KPI) in Account-Based Marketing (ABM) that provides valuable insights into the long-term revenue potential of your customer relationships. CLV measures the total value a customer brings to your business throughout their entire engagement with your company.

In ABM, where the focus is on building strong, personalized relationships with target accounts, understanding the lifetime value of your customers becomes even more important. By measuring CLV, you can identify high-value accounts that generate substantial revenue over an extended period, enabling you to allocate your resources effectively

Tracking customer lifetime value as an ABM KPI helps measure the success of your account-specific strategies.

8. Churn rate

One crucial KPI in Account-Based Marketing is the churn rate, which measures the rate at which target accounts or customers discontinue their engagement or partnership with your company. Churn rate is a key metric for assessing the effectiveness of your ABM efforts because it directly reflects customer satisfaction, retention, and the overall success of your account-based strategies.

Measuring churn rate in ABM involves tracking the percentage of target accounts that have ceased their engagement within a specific period. This can include customers who have canceled subscriptions, terminated contracts, or no longer show active interest or involvement with your company. By analyzing the churn rate, you can gain valuable insights into the effectiveness of your ABM initiatives and identify areas for improvement.

Tracking churn rate as an ABM KPI allows you to identify patterns and trends among key accounts.

9. Return on investment (ROI)

Your earnings, expressed as a percentage of your investment, is your Return on Investment or ROI. This ABM formula seeks to gauge how well you’ve been deploying your funds, and that’s why it remains one of the most widely used and quoted metrics.

In many cases, it’s not as easy as it sounds. What costs do you attribute to purely marketing? What exactly is the return? How should you factor the period between the time you began investing and the time you began to see results?

Despite all these quantitative challenges, ROI gives you a pretty accurate picture of how your campaigns are doing. 

Along with the ROI, it’ll help if you ask three questions:

• Is ABM making it easier for your reps to connect with the target accounts?
• Are your channels nurturing your target accounts faster than before?
• Are you seeing a rise in inbound demand?

If your answer to each of the above is a clear ‘Yes’, you can be sure you are achieving a good ROI.

Tracking ROI as an ABM KPI provides insights into the cost-effectiveness and profitability of your account-specific marketing activities. It helps you allocate resources efficiently and make data-driven decisions to optimize your ABM approach.

These KPIs facilitate informed decision-making, enable effective communication and alignment across departments. Additionally, they serve as powerful motivators and tools for recognizing achievements.