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Which ABM KPIs Should Your Business Track?

Account-based marketing (ABM) is easily one of the most effective ways for business-to-business (B2B) companies to reach their ideal clients. By choosing specific businesses you want as clients and then targeting those businesses with personalized marketing campaigns, you have a better chance of converting them than you would with generalized campaigns.

Just like with any other type of marketing, it’s important to keep up with key performance indicators (KPIs) related to your ABM. Tracking these ABM metrics is crucial for evaluating the performance of your campaigns and allowing you to make them more effective.

But which metrics should your ABM tracking focus on? What are the best ABM KPIs to measure? On this page, we’ll cover seven ABM metrics you should track, including:

  1. Open rate
  2. Click-through rate (CTR)
  3. Conversion rate
  4. Customer lifetime value (CLV)
  5. Customer acquisition cost (CAC)
  6. Sales velocity
  7. Churn rate

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1. Open rate

One of the first metrics to track in your ABM analytics is open rate. This KPI is specific to email marketing, which is one of the most effective ABM strategies.

As the name indicates, open rate is a measure of how many people open your emails. To be more specific, you can calculate ABM by dividing the number of people who open an email by your total number of email recipients and then multiplying by 100. Here, it is written out as a formula:

open rate = (# of opened emails / # of received emails) x 100

So, if you send out an email to 60 people and 20 of them open it, you have a 33% open rate for that email.

Open rate is important because it shows you how effective your email marketing campaigns are. A low open rate means that either your emails are unwanted, or they just don’t have very engaging subject lines.

2. Click-through rate (CTR)

Click-through rate (CTR) is a measure of how many people click on a given ad or email link. A lot of people might see your ads, but only some of them will click on those ads. CTR lets you see just how many.

To calculate CTR, you can divide the number of clicks an ad receives by the number of impressions (that is, the total number of people who see the ad), and then multiply it by 100. As a formula, it looks like this:

CTR = (number of clicks / number of impressions) x 100

CTR is important because it shows how engaging your ads and emails are. A low CTR signals that they aren’t doing a good job of drawing users’ interest.

3. Conversion rate

Conversion rate is one of the most essential metrics— not just for ABM tracking but for all types of marketing. As the name indicates, it’s simply the percentage of your prospects that end up converting.

You can apply this metric to different types of conversions, but it’s frequently used for sales, specifically. For a given period, you can divide the total number of new clients by the total number of leads and then multiply by 100. As a formula, that looks like this:

conversion rate = (total new clients / total leads) x 100

The value of this metric is obvious — it shows you how effective your ABM campaigns are at converting your target businesses into clients.

4. Customer lifetime value (CLV)

Customer lifetime value (CLV) is another essential metric for your ABM analytics. It measures how much revenue you can expect to earn from a given client over the course of their relationship with you. If all of your revenue is earned through one-time purchases, this isn’t really a relevant metric. But it’s important for companies that foster long-term relationships with their clients.

To calculate CLV, you need to multiply a client’s total expected lifespan by the rate at which you earn revenue from them. Here’s what that looks like as a formula:

CLV = total client lifespan x revenue rate

So, let’s say you provide services to a client for a monthly fee of $300. If you expect that client to stay with you for two years, you would multiply that $300 rate by 24 months. That client’s CLV would then be $7200.

It’s important to track CLV because it lets you see how much you’re actually getting in total from a particular client. Maybe their monthly payment seems slim, but if you expect them to stay with you for 10 years, that really adds up!

5. Customer acquisition cost (CAC)

Customer acquisition cost (CAC) is a measurement of how much you spend to earn the average client. After all, it costs money to run an effective ABM campaign, and you want to make sure you’re not spending more than you’re earning.

To calculate customer acquisition cost, start with the total amount of money you spent on a given 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

That tells you how much you spent, on average, per client.

Comparing this metric to your average CLV is one way of calculating your return on investment (ROI) and making sure you’re driving a profit.

6. Sales velocity

Sales velocity is a metric that tracks how quickly your leads move through the sales funnel to become customers. You can calculate the sales velocity of each individual customer, and then you can use that to determine the average sales velocity across all of your clients.

Calculating sales velocity is pretty straightforward — you just trace how much time passed between the time someone became a lead and the time they converted into a customer. No formula needed!

Why is this metric important for your ABM tracking? Because when leads take a long time to become customers, you earn revenue at a slower rate, plus you have to spend more time (and therefore more money) on your marketing campaigns. So, if you track a slow sales velocity, you’ll want to look for ways to speed it up.

7. Churn rate

Last on our list of ABM metrics, we have churn rate. This is the rate at which existing clients end their partnership with you. Again, this is only relevant for companies that maintain long-term clients — it doesn’t apply to companies that rely on one-time purchases.

To calculate your churn rate for a given period, divide the number of lost customers for that period by the number of customers you had at the start of the period, and then multiply by 100. As a formula, that looks like this:

churn rate = (# of lost customers / total # of customers) x 100

So, if you start a quarter with 75 clients and you lose 5 of them, you have a 6.6% churn rate.

A high churn rate indicates that there’s an issue with your products or services. You’re doing a good job of earning customers, but you’re not satisfying them after they convert.

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Get help tracking and optimizing your ABM KPIs with WebFX

If you’re looking for help with your ABM analytics — or if you simply want help building and optimizing your ABM campaigns themselves — one of the best things you can do is partner with a digital marketing agency like WebFX. We offer ABM services that can help you reach exactly the right businesses online.

If you’re interested in partnering with us, be sure to give us a call at 888-601-5359 or contact us online today!

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