7 Account-Based Marketing Metrics to Track (& Benefits)

We live in the world of personalization, and customer-focused marketing and account-based marketing are the approaches that help you bring customization into the B2B space.

If you are interested in adding account-based marketing into your overall digital marketing strategy, then you might want to know how to measure your performance.

Our guide will help you understand the intricacies of account-based marketing and identify some of the most important metrics that teams use with ABM.

What is Account-Based Marketing?

Account-based marketing (ABM) is the practice of performing marketing and sales activities on individual accounts instead of targeting wide audiences on the internet. 

With account-based marketing, each account/company is essentially a separate market that you need to target and nurture. It means that, instead of just bringing traffic from various sources and hoping that they will convert, you do the following:

1. Identify the company that your leads are working at.
2. Find, contact, and engage other people (preferably decision-makers) in that company.
3. Tailor your marketing and sales efforts to the needs and specificity of that company and its decision-makers.

With this approach, you make sure that everyone with a say in that company likes your product and has given the green light to purchase.

As a sales and marketing practice, account-based marketing relies on these four fundamental principles:

1. Client-first approach. You should focus on identifying and solving your account’s pain points instead of just selling your product.
2. Sales and marketing collaboration. Your salespeople and marketers will be working as a single team when communicating with and engaging account leads.
3. Focus on relationships. Your team should prioritize building long-term relationships with accounts instead of winning short sales.
4. Flexibility and tailored campaigns. Each account has different needs and processes. Thus, your team should tailor its campaigns to meet these needs.

Overall, account-based marketing is a popular (70% of marketers do it) approach to building your B2B revenue stream. But is it really worth getting into? We have four arguments coming up next, why you should consider an ABM strategy.

4 Account-Based Marketing Benefits

Other than being a popular method, account-based marketing is also quite effective too. Businesses with well-established account-based marketing practices and teams credit over 70% of their revenue to ABM.

This approach also enjoys a great reputation among those who have used it, as almost 90% of ABM practitioners have noted that it outperforms other marketing approaches.

But this is only part of the story; here are several more benefits that you can look forward to if you decide to take the ABM approach.

Benefit #1: It increases efficiency

When you are communicating closely with the decision-makers of your sales lead account, you have the benefit of obtaining lots of valuable insights and information from them. These insights include:

• The industry your account is operating in.
• The problems and needs of each decision-maker of the account.
• Their role in the company.
•  Their professional and personal goals, and more.

Thus, account-based marketing is a highly data-driven strategy, and with all of these insights, you can personalize your approach to each account and continuously optimize your campaigns, thus vastly increasing your efficiency.

You can also increase your efficiency by taking advantage of specialized ABM tools that will automate many of your tasks, save you time and let you scale your account-based marketing activities with ease.

Benefit #2: Shorter sales cycles

Another great side of implementing ABM is that it helps you shorten the cycle time from acquiring the lead to closing it with revenue.

A mature account-based marketing team has the necessary processes set up that let them:

• Filter out leads.
• Eliminate those that are not likely to have a high conversion rate or will not generate the required revenue.
• Focus on the right accounts that are the most promising in terms of their expected contract size and the probability that they will become paid users.

This elimination process and the focus on high-value accounts significantly shortens the average cycle time as you remove the low-value and long-cycle prospects from your list.

There is another way ABM helps you shorten cycle time. Your teams are targeting the decision-makers in the account and increasing their interest in the product. And engaged decision-makers move through the sales funnel much faster.

Benefit #3: Higher ROI

Account-based marketing is considered one of the best-performing approaches in terms of ROI.

And here’s the reason why. Firstly, by shortening sales cycles, your team is able to increase close rates (a.k.a win rates). Secondly, thanks to its data-driven approach and specialized tools, you can save lots of time and effort.

Thus, with more results and fewer resource costs, you significantly increase the profitability of your marketing and sales efforts.

Benefit #4: Internal alignment

Account-based marketing assumes the direct involvement of many of your departments in the process. This lets you create cross-functional teams that include everyone from marketers to sales assistants, writers, and designers. 

As you set unified goals and KPIs on the cross-functional team, instead of having different KPIs for each separate department, and the team works together to achieve these goals, you get a superior level of alignment among everyone involved.

To conclude, account-based marketing lets you increase your sales output while spending less time and resources. It is also great at uniting everyone in your team around a common goal.

Sounds exciting, right? But before jumping into implementing account-based marketing, let us explore it a bit more. In particular, let’s see what are the different types of ABM out there.

3 Types of Account-Based Marketing

When it comes to implementing an account-based marketing strategy, we need to decide on the following:

• The number of accounts we want each of our marketers to manage.
• The depth of campaign personalization we want to have.
• If our ABM marketers should focus more on retaining existing accounts versus acquiring new leads.

Depending on the three criteria mentioned above, we can identify three distinct account-based marketing types – Programmatic ABM, ABM Lite, and Strategic ABM.

Now let’s examine each type in more detail and understand how they differ from each other.

Type #1: Programmatic ABM

The programmatic approach to account-based marketing is about contacting and nurturing a large number of accounts by grouping them into distinct categories and creating tailored campaigns for each category.

It is also known as the one-to-many approach because your marketers are focusing on lots of accounts (sometimes thousands) at the same time.

Marketing and sales teams are taking advantage of technology, bulk messaging channels (e.g., email marketing, webinars, or social media channels like LinkedIn), and specialized tools to automate this process as they would be physically incapable of managing so many accounts at the same time.

Compared to the other two, this approach involves the least amount of personalization as marketers will use the same content, processes, and designs for multiple accounts belonging to the same category (e.g., same niche or location).

In terms of focus, the teams performing programmatic ABM will give more priority to acquiring new accounts than working with existing ones to increase their retention and lifetime value.

Type #2: ABM Lite

ABM Lite (also known as the one-to-few approach) stands in the middle between the other two when it comes to targeting and personalization.

Unlike programmatic ABM, this approach does not target thousands of accounts simultaneously. An average marketer will usually handle no more than 20 accounts, and the average campaign will be targeting around 5 accounts at the same time.

By targeting fewer accounts, this approach adds room for more personalization. Each individual campaign will target a few companies with similar traits like business needs or challenges.

Considering that marketers manage fewer accounts, too, they have more time to speak to key decision-makers and understand their individual requirements and pains.

The focus of ABM lite is different from the programmatic approach too. With ABM lite, marketers balance their time between maintaining relationships with existing accounts and finding new and closing deals with them.

Type #3: Strategic ABM

Among the three types of account-based marketing, Strategic ABM is the most personalized one that prioritizes quality over quantity. The alternative name for this approach is one-to-one, and it speaks for itself too.

Here, marketers focus on attribution and handle only a couple of accounts simultaneously. It means that they can afford to spend significant time and resources on meeting all key decision-makers in each account and engaging each one individually.

For this approach, personalization becomes a critical factor. Thankfully, the extra time that marketers dedicate to learning about their customers lets them gather lots of valuable insights, create a detailed customer profile and deeply-personalized marketing campaigns.

Finally, strategic account-based marketing requires teams to focus more on maintaining existing relationships and increasing their customers’ lifetime value instead of acquiring new accounts.

To sum up, there are three different approaches to doing account-based marketing, and each one is tailored for a different need. Your choice depends on your preference for quantity versus quality.

Now, with account-based marketing all clear to us, let’s move on to the metrics worth tracking.

7 Account-Based Marketing Metrics to Track

Account-based marketing can be a great approach to building up your recurring revenue streams, but are you sure you are doing it right? The best way to see if everything is going well is, of course, by measuring your performance.

But if you want to track and measure your ABM efforts, you will face another question – which metrics should I follow?

Out of all the ABM metrics out there, we have filtered out the seven most prominent ones that can help you monitor and improve your account-based marketing endeavors.

Let’s see which ones they are.

Metric #1: Pipeline velocity

Pipeline velocity (a.k.a. deal velocity) is a metric that helps you answer the question – how much sales am I (my team) generating each day with the current pipeline we have set up?

This metric takes into account two important pieces of information. Firstly, it is the number of days it takes you to convert a marketing-qualified lead into a paying customer. Secondly, it is the average amount of sales revenue you are generating.

Thus, the formula for pipeline velocity looks like this:

Now let’s illustrate this calculation with an example.

Let’s imagine you are looking at 200 opportunities, and you expect an average deal size of $1,000. The past data shows that your team converts around 10% of leads into customers, and it takes them 20 days.

In this case, your pipeline velocity will be $1,000. It means that, on average, your team is capable of generating $1,000 per day in sales.

Pipeline velocity is a great health check metric for your teams as its drop can indicate an issue in the team or its processes.

Metric #2: Target account coverage

Targeting the right people in the account is a major challenge in account-based marketing. Sometimes, you do not know for sure if your targeting process is correct until you start running your campaigns.

This is where measuring target account coverage can help you, as it shows:

• If you have reached out to the relevant people/decision-makers.
• If your efforts in engaging them are effective.

To calculate this metric, you can use this formula:

Target account coverage shows the percentage of account decision-makers you have managed to engage. The value ranges from 0% to 100%, where the latter means that you have engaged everyone you contacted.

Metric #3: MQLs

MQL stands for marketing qualified leads. It is the number of people who have expressed interest in your products or services. Usually, people become marketing qualified leads if they have signed up for your emails or downloaded your whitepaper.

There is also another term called marketing qualified accounts; these are the companies or accounts that you think are interested in your products enough to contact them and do a sales pitch.

You usually get your list of marketing-qualified accounts by filtering the MQL list based on certain behaviors and actions (e.g., they are actively using your free trial and are about to cross the free-paid threshold).

To understand your effectiveness in generating MQAs, you can calculate the ratio below.

This ratio shows how well you are able to get qualified accounts out of your list of qualified leads.

Metric #4: Customer churn rate

The customer churn rate tells you how many paying customers you have lost during a specific period of time (usually a month).

There are several churn-related metrics that you should track. Firstly, it is the number of lost customers itself. Then, there is also the percentage of the customer base you are losing each month that you can calculate with this formula.

Finally, there is the so-called revenue churn. In this case, you are calculating the lost revenue instead of the number of lost customers.

Calculating this type of churn especially makes sense when you have small and very large customers simultaneously. For instance, when some of your customers make up less than 1% of revenue each while others represent 30% of all of your incomes. In such cases losing a single customer can either be negligible for your revenue or, on the contrary, very significant.

Metric #5: Account engagement

When working on an ABM campaign,your goal is to keep a high level of engagement for your accounts to increase the chances that they will convert into paying customers.

Thus, it is essential to track and monitor the engagement rate of each account. Depending on the communication channel, there can be many engagement metrics such as response rate or communication frequency.

But no matter which metric/s you track, you need to make sure that they stay on an adequate level or continue growing.

There is also the practice of comparing various communication channels based on these metrics and choosing the one that your account decision-makers prefer the most.

Metric #6: Net promoter score (NPS)

Net promoter score is a popular metric many marketing and product teams use to understand if customers like the products so much that they are ready to refer them to others.

NPS is usually a one-question survey that asks the respondent to rank the likelihood (on a scale from 0 to 10) of recommending your product to a friend or colleague.

To calculate the score, you classify the respondents the following way:

• Those with scores of 9 and 10 are promoters.
• 7 and 8 are passives.
• People with 0 – 6 scores are detractors. 

After the classification, you apply this formula.

If you have a positive NPS score, it means that people like your product and will recommend it to others.

Metric #7: Annual contract value (ACV)

Annual contract value shows how much your paying customers spend on your product on average.

It is an important metric to track in account-based marketing, as it lets you see if the customers you are converting get you more annual revenue than what you had in the past.

To calculate the annual contract value, you can use this formula.

Another good use of the ACV is for segmenting your customers into different revenue groups and using different ABM approaches for each segment.

To summarize, the annual contract value was the last one of the seven key metrics that we had put aside for you to use in your account-based marketing efforts. Each of them covers an important area in ABM and is crucial to track and monitor.

Now Over to You

Account-based marketing is a great strategy for your B2B marketing efforts, and our set of metrics will help you make sure that you are doing it right.

Just remember that there are no silver bullets and 100% right templates to follow, feel free to add or subtract any metric based on your needs and business context.

Good luck implementing account-based marketing!For more interesting guides like this, you can visit our blog.