Measuring account-based marketing success: Beyond traditional metricsby
Account-based marketing offers an alternative to top-of-the-funnel marketing, and therefore requires a different set of metrics to monitor performance. In the following article, Alisha Lyndon shares her thoughts on measuring ABM success, after which a number of other experts share some alternative thoughts.
Marketers have a problem with the way they measure campaign success, and it’s damaging our industry’s reputation. For far too long, marketers have been using outdated metrics such as marketing qualified leads (MQL) or campaign response rates which give limited insight into marketing’s true contribution to sales and other organisational goals.
It seems that more and more marketing activity today is geared around generating leads, whether it’s organising an event, creating downloadable content, running email campaigns - but to what end? So CMOs can boast to the boardroom about their success, while the sales director sits there wondering why their own figures are flatlining.
Given the huge amount being spent on digital marketing platforms, marketing professionals are under increasing pressure to justify their investment in technology - and measuring leads simply doesn’t cut it.
Marketers failing to drive sales
It shouldn’t be news to anyone that marketing metrics are at odds with sales. Industry analysts Forrester have shown that only 1 in every 100 leads turns into revenue; and even this figure doesn’t differentiate between a single purchase and a valuable, long-term relationship - which is precisely what marketing should be fostering.
Whatever happened to the connected business; to marketing contributing to the most fundamental strategic business-wide goals, such as sustained growth? Continuing to measure leads has a very strong whiff of marketing marking its own homework. What’s more, it bears no relation to the way in which purchasing decisions are made, and is a frankly useless way of managing and evaluating the long term relationships that are essential to a successful business.
The problem is, to a large extent, a structural one. Traditional marketing focuses on pushing leads through a “funnel”, which is why so many marketing departments continue to give so much credence to lead volume. Organising and hosting an event that generates hundreds, even thousands of leads is therefore counted as a success, even if not a single one of them leads to revenue.
Meanwhile, because this approach focuses on individual leads, it’s a particularly poor way of measuring influence across buying decisions in end user organisations. Research shows that there are, on average, 22 people involved in a typical enterprise purchasing decision. By measuring a single person as a lead, marketers can do little to build the consensus that’s so important to making a sale - especially for expensive, big-ticket items within enterprise organisations.
A different approach to marketing
The current position in which marketing finds itself is largely a product of the steady drifting apart of the sales and marketing departments and the emphasis on shiny toys such as AI or machine learning. The goal of marketing, surely, must be to work hand-in-glove with sales to build meaningful, long-term relationships - not just to shift product or sell services, but to treat each customer as an individual; to understand their pain points and influence purchasing processes, engaging them along the way.
This is exactly what account-based marketing (ABM) sets out to achieve. The goals of ABM are the antithesis of the traditional, top-of-the-funnel approach. Instead of focusing on volumes, ABM practitioners pick the most important accounts, spend time identifying the individuals and teams responsible for purchasing decisions. They then create a strategy that doesn’t target “leads” as an outcome, but builds long-term valuable engagements based adding value to each customer’s unique context.
Naturally, this strategy requires a new way of measuring marketing success; a set of metrics that goes far beyond counting leads, but focuses rather on long-term revenue and relationships. We believe that these metrics - or, at the very least, this approach to evaluation - is one that can provide lessons to every marketer.
Towards more meaningful metrics
Before we start talking metrics, we first need to establish the goals for marketing. For ABM practitioners (indeed, we’d argue, for all marketers) this is based around three pillars: first, to grow relationships; secondly, to build reputation within the customer’s organisation and within their purchasing team; and finally, to generate revenue - both from new opportunities and securing ongoing investment from existing customers.
So instead of gathering a plethora of anonymous leads, marketers should be cultivating relationships. This means focusing on growing their interactions with senior people within the team they are targeting, measuring both the number of interactions and the actual engagement achieved.
In terms of reputation, we should be tracking how the customer’s perception is changing: for example, do they see us foremost as organisations with something to sell, or as a partner who helps them solve problems? Are they aware of our full product portfolio, and the strategic benefits that we can bring? Are we talking their language, and understanding their needs - and those of their own customers? And above all, how is this translating into uplift in RFPs and proactive bids?
Finally, marketers must be judged on the amount of revenue that they are creating, such as measuring the number of new opportunities that they are creating or existing customers who are using more of what they’ve purchased. This is not the same as measuring leads - it’s about looking at real, meaningful engagement that leads to more proposals, increased pipeline velocity and, ultimately, new business or growth and increased cross-sell / upsell within existing accounts.
Changing the marketing mindset
As marketers, we’re used to having to justify our work and our budget, but if we continue to rely on traditional metrics such as MQLs, it helps no-one - least of all ourselves.
But without a fundamental shift in the marketing mindset, these practices will perpetuate because they are instilled at an early stage in marketers’ careers. Simply put, marketing practitioners are not sufficiently encouraged, or trained, to develop the commercial focus that’s so important to measuring the success of their work. The result is that marketing ends up talking a completely different language to the rest of an organisation, which makes marketers’ hard work appear less credible and less appreciated.
Yes, a move to more meaningful metrics does mean that marketers have to do more ‘heavy lifting’, and eschew some of the more ‘fun’ aspects of their work, such as events, that do little beyond filling the top of the marketing funnel.
Demonstrating the benefits of committing to responsible, meaningful metrics is the best way to convince marketers of its merits. One of the great advantages of this approach is that the metrics are so transparent: because the marketer is cultivating relationships within targeted accounts, it’s easy to measure the results, including ROI, of any activity that takes place. Our recent work with Google, for example, resulted in direct engagement with more than 450 named stakeholders in key target accounts, 209 new relationships with C-level decision-makers, 39 event attendees from previously unengaged accounts and, as a direct result, a multi-million dollar sales pipeline.
As marketers, we’re supposed to be the experts at selling and building reputations, but for many years, our industry has failed to do this for itself. We need to do more to trumpet our success - and the first step is surely for us all to start measuring what that success looks like.
A reminder of the marketing metrics that Alisha believes should become more prominent under an ABM philosophy:
The number of interactions with senior people within the team targeted.
The engagement achieved with these people.
Do customers see us foremost as organisations with something to sell, or as a partner who helps them solve problems?
Are they aware of our full product portfolio, and the strategic benefits that we can bring?
Are we talking their language, and understanding their needs - and those of their own customers?
How is this translating into uplift in RFPs and proactive bids?
How many new opportunities are being created?
How many existing customers are using more of what they’ve purchased and how much more?
Additionally, Sue Duris recently reached out to a handful of martech vendors to gauge some alternative thoughts on how to measure ABM campaigns: Matt Benati, CEO and co-founder of LeadGnome; Shari Johnston, SVP of marketing at Radius; and Tony Yang, VP of marketing of ConversionLogic. The following metrics recommendations were surfaced:
- Length of sales cycle. When examining the average length of sales cycles of ABM campaigns, organisations should find that the focus on each target account has allowed them to more quickly reach the right people and gain consesnsus, therefore leading to shorter sales cycles than with non-ABM campaigns.
- Lifetime value. Benati suggests that customers onboarded through an ABM process will become advocates and happy customers renew more often and for longer periods of time than unhappy/neutral customers.
- Average deal size. Johnston suggests that while MQL target metrics or other volume-based metrics will not align well with ABM, organisations could see overall deal sizes rise.
- Conversion rates throughout the funnel. Johnston also adds that this figure should improve for ABM campaigns.
- Engagement of buying groups. Yang explains: "The fine people at TOPO have some great ABM material on their blog, in particular their version of the Account-Based Funnel along with the concept of an account engagement score, which is something that Jon Miller and his team at Engagio talk a lot about as well. I believe the core concept shared by all of these experts is that it’s important to understand and track engagement of buying groups in your target accounts from a marketing perspective. Thus you can begin to understand whether or not your campaigns are helping to build engagement for sales with decision makers at the target account."