5 Classic Marketing Success Metrics Behind Today’s ABM Strategies
If you’re in B2B, it’s hard not to hear account based marketing success stories these days. A company doubled revenue or tripled ROI, for example, by leveraging a new set of analytical frameworks and tools. These stories are always told with metrics and may seem too good to be true.
But in fact, businesses do actually get great results this way. We’ve seen our customers get them, and we continue to improve the InsightBASE® platform to help them get even more. Their achievements and new data-driven best practices go into the spotlight where they belong.
But have you thought about what is going on behind the account based marketing scenes? For example, marketers may have helped land a whale, but why did they invest resources in targeting that whale? How did they get management buy-in on their methods? How are they helping track and deliver ongoing value to the organization beyond one particular deal?
The answers to those questions are also told with metrics – but these aren’t new. They’re classic marketing success metrics that form the backbone of today’s hottest data-driven marketing strategies. Find them outlined below.
Classic B2B Marketing Success Metric #1: Customer Lifetime Value (CLV)
Customer Lifetime Value is the total profit to your business of working with a given customer over the entire relationship. While there will be a number of variables specific to your business and market, the general calculation method is to multiply the customer’s average order value by the number of the customer’s anticipated orders.
In account based marketing, a high estimated CLV for a given account will indicate that it is worth your efforts in the first place. This success metric also offers a powerful measuring stick for the effectiveness of data-driven marketing strategies over time. An existing account’s CLV may actually rise as intent data reveals new up-sell and cross-sell opportunities and allows you to deepen the relationship with more relevant marketing content.
Classic B2B Marketing Success Metric #2: Customer Acquisition Cost (CAC)
Your Customer Acquisition Cost is your total expenditures on sales and marketing (like advertising, promotional efforts, salaries, etc.) for a given time period divided by the number of new customers landed during that period. Generally, you’ll want to see a falling CAC over time, as sales and marketing teams get smarter and deliver more bang for each buck spent for (and on) them.
In a properly executed data-driven marketing campaign, the CAC is another indicator of marketing effectiveness that should look like a “counterweight” to the CLV. As the CLV increases the CAC decreases. Or in other words, closing bigger, better sales gets easier over time.
Classic B2B Marketing Metric #3: Marketing Qualified Leads to Sales Qualified Lead Ratio (MQL / SQL)
A Marketing Qualified Lead (MQL) is a lead your marketing team considers strong enough to turn over to sales. When your sales team accepts the lead and agrees to pursue it, it becomes a Sales Qualified Lead (SQL).The ratio of MQL / SQL has been a traditional measure “pure” marketing performance, as the hand off to sales was as close as marketers could come to converting the lead into a customer. The underlying goal of the MQL / SQL success metric, of course, is to see just how good the MQLs actually are.
How that goal is accomplished in today’s account based marketing landscape is starting to look a little different, though. Intent data makes an objective case for MQLs and allows sales reps to spend less time qualifying them and more time converting them into customers (and repeat customers). Eventually, it’s likely that the concept of the SQL will become less relevant, and account based marketing effectiveness will track in terms of the MQL / Customer ratio.
Classic B2B Marketing Success Metric #4: MQL Velocity
MQL Velocity refers to how fast an MQL moves along the buying journey to becoming a customer / repeat customer. The faster the time-to-revenue, the better. While many other B2B marketing metrics – including the three outlined above – require top-level number-crunching, it’s usually obvious to marketers and sales reps in the trenches when an individual prospect is “hot” and has a high MQL Velocity.
That’s probably why most account based marketers we work with report their first big “It works!” moment after a sale happens faster than previously thought possible. Access to intent data allowed them first to identify the hot prospect and then accelerate its MQL Velocity with high-relevance marketing content.
Classic B2B Marketing Success Metric #5: MQL Momentum
MQL Momentum refers to the rate of growth of the number of your MQLs from time period to time period, e.g. month-on-month. It’s important to note that while the preceding 4 metrics are powerful performance indicators which can guide improvements moving forward, none are as good a predictor of future revenue as MQL Momentum. With consistent sales performance, you should be able to use MQL Momentum to make accurate projections (or give early warnings) concerning your revenue in coming months.
The latest data-driven marketing tools (like InsightBASE) help put your MQL Momentum maintenance on autopilot. Different prospects enter the market for your products or services at different times, and now you can know who they are and when they do it.
In conclusion, even though where we’re going in marketing these days is exciting, it’s worth remembering where we’re coming from. The above outlined classic marketing metrics have stood the test of time and will continue to offer familiar, well-established perspectives on your business as you take it forward into the age of account based marketing.