A New Way to Think About Marketing Metrics
“You can’t manage what you can’t measure.” – Peter Drucker
Measurement and metrics are critical in any facet of marketing, and Account Based Everything is no different. But only specific metrics are suited to the specialized discipline of Account Based Marketing and Account Based Selling.
ABE requires a new set of metrics.
Marketers have made significant progress in the use of metrics to demonstrate the impact of their work, earning more accountability and ultimately, respect. Unfortunately, many marketers are still far too focused on vanity metrics such as the number of Twitter followers or Youtube video views. These are not only distracting, they’re dangerously misleading. More marketers are thankfully adopting more revenue and lead-based metrics, such as how many MQL’s were delivered this quarter and what percentage sales is accepting and converting to opportunities. But even this approach isn’t appropriate when it comes to optimizing account-based activity.
Traditional demand-gen metrics aren’t enough.
The rise of Account Based Marketing and Account Based Everything demands new ways of thinking about marketing metrics. While leads, opportunities, pipeline, and revenue are important and even necessary metrics, they are not sufficient to measure account-based strategies. This is a fundamentally different approach that requires fundamentally different metrics.
If your account-based strategy is going to see the kinds of big gains it has the potential to deliver, you need metrics that are suited to this specialized discipline – or you’ll be pursuing and rewarding the wrong things. Here’s why we need to start thinking about measurement differently:
Account-based strategy calls for account-based metrics.
What happens when a salesperson celebrates closing a big deal? They write the company name on the whiteboard – not the name of the person who signed the contract. By definition, Account Based Marketing focuses on key accounts, so it follows that the metrics must do the same. You need to measure ABM with an account-centric lens, not one that is lead-centric.
It’s called “business to business”, not” business to lead.”
Quality, not quantity.
In account-based strategies, marketing won’t be generating many “hot leads” – so even metrics that incorporate quality (like “marketing qualified leads”) become less useful. Rather than focusing on creating new leads, marketers operating under an account-based strategy need to think about their top priority as influencing the people who matter within the right accounts. That’s a new and different mindset about how marketing is measured, or claims victory.
Low volumes change our priorities.
The low volumes of account-based activity change the metrics we know and love (or maybe hate). The sheer quantity of leads used in Account Based Everything are too low for traditional funnel metrics such as conversion rates.
For example, a sales rep with 20 accounts can’t accept a 5% conversion rate – she needs to be thinking about growing revenue from every single account. Which would the sales rep value more — 20 random low-level professionals downloading your whitepaper, or one meaningful conversation with a decision-maker at one of her target accounts?
Marketing can’t wait for closed revenue to measure success
Companies have recently reported a 24% increase in the length of their sales cycle (according to SiriusDecisions). The larger the deal size, the longer the sales cycle. The longer the sales cycle, the more we need metrics to understand what’s going on as it progresses.
Ideally we would always be able to measure ABM using closed deals and revenue. And marketing certainly should measure those things. But in reality, we can’t afford to wait that long before we measure success – especially when there’s a long gap between top-of-the-funnel lead generation and bottom-of- the-funnel pipeline creation.
As an account develops, marketers need a way to measure progress in the middle-of-the-funnel. That’s exactly where engagement comes in. By tracking how deeply the right people at an account engage with your brand, you have a quantifiable way of showing development throughout a potentially long nurturing process.
This is about influencing pipeline.
Marketing sources 25-45% of pipeline for companies selling to non-named accounts, but sources less than 10% of pipeline at strategic or enterprise accounts. This means, instead of relying on marketing generated pipeline to prove our value, account-based marketers need to show their impact on revenue by demonstrating how well they influence deals and improve key business outcomes.
- Win rates
- Deal velocity
- Average contract value (ACV)
“If you believe ABM success is measured only on lead volume… think again. ABM is about influence.” – Megan Heuer, SiriusDecisions
Customer expansion, not just new logos.
The traditional marketing funnel metrics focus almost exclusively on new business. But, deepening relationships with existing customers is a major part of Account Based Everything. We need metrics for both sides of the “bow-tie.”
Cross-sell and upsell pipeline and revenue are certainly part of this equation, but we should also consider:
- Customer satisfaction
- Net promoter scores
At the end of the day, the larger and more complex our deals, the less we can measure our efforts in terms of ‘marketing sourced’ leads and pipeline. Clearly, Account Based Everything warrants its own approach to metrics – one that measures the right things in the context of large, complex deals.
What are you measuring? What’s working?