Account-based marketing (ABM) has been one of the best ways for B2B (business-to-business) companies to reach their target audience. The approach is choosing the specific business for which you want to be your customer, then creating personalized marketing campaigns and targeting them! By running ABM campaigns, you will have a better chance to convert them into your customers.
Like any other marketing aspect, keeping up with the effective KPIs (key performance indicators) related to the ABM is very important. If you want to evaluate the performance of your campaigns and be more effective, you should track these AMB metrics.
But which metrics should your ABM tracking focus on? What are the most effective AMB KPIs to be considered? Now, we want to review which ABM campaign your business should have, including:
- Open rate
- Customer acquisition cost (CAC)
- Customer lifetime value (CLV)
- Click-through rate (CTR)
- Conversion rate
- Churn rate
- Sales velocity
Open Rate
Open rate is one of the first metrics you should analyze in your AMB KPIs. It is specifically related to email marketing and is also one of the best AMB strategies.
You can guess it from the name “open rate,” which measures how many people open your email. Calculating ABM more precisely requires multiplying 100 by the total number of recipients who open your email and dividing by that figure. You can also write it as a simple formula:
open rate = (# of opened emails / # of received emails) x 100
For instance, if you send an email to 120 people and 40 of them open your email, you have 33% open rate.
The open rate shows the effectiveness of your email marketing campaign. If your email opens at a low rate, it could be because the emails were unwanted or didn’t have engaging subject lines.
Customer Acquisition Cost (CAC)
CAC (customer acquisition cost) shows how much it costs for you to earn the average client.
Running an effective ABM campaign costs money, and you want to ensure you’re not spending more than you earn.
For calculating CAC, you should start with the total money you spent on a campaign. After that,
To calculate customer acquisition cost, start with the total money you spent on a campaign. Then, divide that cost by the number of clients you earned from that campaign. Here it is as a formula:
CAC = total campaign spending / # of clients earned from campaign
So, you can calculate how much money you spend on average per client.
Customer Lifetime Value (CLV)
CLV (customer lifetime value) is the other metric of ABM campaign analysis. This metric indicates the revenue that clients can expect throughout their relationship with you. While this metric might not apply if all your revenue comes from one-time sales, it’s essential for companies that strive to build long-term partnerships.
To calculate CLV, multiply each client’s expected lifespan by their revenue-earning rate – the following formula illustrates this method:
CLV = total client lifespan x revenue rate
It is very important to track customer lifetime value as it shows you how much you get from a specific client. Sometimes, the monthly payment seems few, but if you try to be with them for ten years, the cost is astronomical!
Click-Through Rate (CTR)
CTR (click-through rate) shows you how many people click on your given ad or an email link. As you know, many people might see your ads, but some people open them. By calculating the CTA, you can see how many people click.
You can calculate CTR by dividing the number of clicks received by the impressions (the total number of people that see the advertisement) and multiplying it by 100. It looks like the following formula:
CTR = (number of clicks/number of impressions) x 100
A low CTR indicates they are not doing a good job attracting users’ interest. Low CTRs indicate that the ads are not engaging users.
Conversion Rate
Conversion rate is an essential metric when tracking ABM as well as other types of marketing; it measures the percentage of prospects who convert.
This metric can assess various conversions; however, its primary application lies within sales. Simply divide the number of clients over leads during a specified period by 100 and multiply that figure. Here’s an example formula that illustrates this idea:
conversion rate = (total new clients / total leads) x 100
The importance of this metric should be evident — it shows the effectiveness of ABM campaigns in converting target businesses into customers.
Churn Rate
Churn Rates are another ABM metric on our list. They reflect the rate at which existing clients leave your relationship; this metric only applies to businesses that rely on long-term customers; single-purchase businesses do not need to worry about this metric.
Divide the number of lost customers by the total customer count at the beginning of a period and multiply that figure by 100 – this formula looks something like this:
churn rate = (# of lost customers / total # of customers) x 100
Sales Velocity
Sales velocity indicates how quickly leads progress through your sales funnel and become customers. You can calculate each customer’s sales velocity and use this to determine your average sales velocity.
Calculating the sales velocity is easy — just track the time between when someone was a lead and when they became a customer. No formula is required!
Why is this metric so important for ABM tracking? When leads slowly convert into customers, revenue is earned at a lower rate. You must also spend more money (and time) on marketing campaigns. If you notice a slowing sales velocity, it’s time to find ways to increase the speed.
Conclusion
All in all, now you know which ABM campaign KPIs can help you reach your target audience and how to calculate each part of it. You should consider all parts and grow your ROI.
FAQs
1. How Often Should I Check My ABM Campaign KPIs?
Think of your ABM campaign like a delicious recipe. You wouldn’t just throw all the ingredients together and hope for the best, would you? You’d check on it every now and then, making sure everything was simmering nicely and tasting right.
It’s the same with your ABM KPIs. They’re the indicators that tell you if your targeted B2B marketing efforts are on track. But how often should you peek into the pot?
For quick-cooking metrics like email opens or website clicks, daily or even hourly check-ins can be like tasting as you go. You’re making sure your messages are hitting the mark and engaging your audience.
Slower-cooking metrics like customer lifetime value or sales velocity are more like checking the oven timer. You don’t need to constantly open the door, but you want to keep an eye on the progress to ensure it’s baking evenly.
The key is finding the right balance. Check-in often enough to stay informed, but don’t get overwhelmed by data overload. Remember, you’re building relationships, not staring at numbers all day.
2. My ABM Campaign Isn’t Working! What Now?
Uh oh, your email subject lines are crickets, your website clicks are tumbleweeds, and your customer churn is like a runaway train. Don’t throw in the spatula just yet! Every chef encounters the occasional burnt dish.
First, figure out what’s gone wrong. Are you targeting the right audience? Maybe your recipe (messaging) is bland or needs a pinch of creativity. Or perhaps your oven (channels) isn’t the right temperature for this particular dish.
Once you’ve diagnosed the problem, it’s time to get your hands dirty. Refine your target audience like a chef carefully choosing the freshest ingredients. Rephrase your messages to be more captivating, like adding a dash of spice or a drizzle of humor. And don’t be afraid to experiment with different channels, like switching from the stovetop to the grill for a change of pace.
Remember, even the most seasoned chefs have had their share of kitchen disasters. The important thing is to stay calm, identify the issue, and adjust your approach. With a little tweaking and some creative thinking, your ABM campaign will be back on track in no time!
