As a B2B marketer, you’re probably well-versed in the basics of demand generation and account-based marketing. But how familiar are you with account-based demand generation? This approach isn’t merely a blend of the two concepts; it’s a nuanced breed of marketing that requires precision and can yield powerful results.
As with most types of marketing (and as Peter Drucker so famously said), you can’t manage and improve it if you don’t measure it. But many marketers are unsure how to properly measure account-based demand generation and what KPIs to use.
We’ll dig into that. But first, a quick overview of what account-based demand generation is and why it’s impactful.
Why Account-Based Demand Generation?
Account-based demand gen narrows your focus to only the highest quality and best-fit accounts, whether they’re current or future customers. It’s a shift away from chasing leads to instead maximizing growth by honing in on your highest-value accounts. This approach saves time and money that are often wasted marketing and prospecting into accounts that will never buy from you.
Account-based demand generation is not a trendy flash in the pan. In fact, it has quickly become the proven way to sell into the enterprise. That’s because it accounts for buying committees with a larger base of decision-makers, as well as complex and often lengthy sales cycles. It also sets your team up to effectively land and expand within the organization.
So, with these benefits in mind, how can you capitalize on a strategic approach to demand gen and measure your progress?
Account-Based vs. a Traditional Lead Funnel Model
Since the account-based model is different from the lead funnel model, it’s not surprising that the metrics you need to evaluate will be different too. Yes, this will be a significant change for most teams, but the results will quickly prove worth the effort.
Take Masergy for example. This software-defined networking solutions company built their account-based strategy from soup to nuts and drove some impressive results: a 7x increase in opportunity creation and 50% higher opportunity MRR. They were also able to reduce their sales cycle by 10%. Big wins for any team trying to sell into complex enterprise companies.
Here are a few of the differences between account-based and lead-based that you need to pay attention to.
- 360-degree account analysis: While the lead funnel model focuses on individuals, an account-based approach demands analysis of all the touchpoints across an account buying center. Account-based technology offers better visibility into how activities impact known and anonymous contacts throughout the entire deal cycle. With this level of insight, you’re able to track engagement at every stage, even among anonymous website visitors, which means you can strike while the iron is hot (rather than waiting for them to identify themselves) and do so in a highly personalized way, often eliminating the need for a form fill altogether.
- Play impact: Account-based demand gen focuses on mapping out and deploying multichannel campaigns. These campaigns are made up of specific actions your team will take based on key triggers — like people from your target account researching a competitor’s brand, requesting a demo, or hitting a meaningful threshold of engagement. Very similar to traditional marketing tactics. But the difference is that you’re not just triggering plays based on a lead’s activity. Again, it’s about the entire buying committee.
- Conversion rates: Traditionally, the quantity of leads entering the funnel has been a top-priority metric, but in account-based demand generation, the conversion rates throughout the entire funnel provide deeper insight into which of your efforts are truly driving pipeline velocity.
Since this is a relatively new approach to demand marketing, it’s imperative to capture and report on success metrics to gain buy-in and prove that your marketing is having an impact on business outcomes.
What Metrics Should I Track?
So, now that we’ve covered some of the mindset shift necessary to move from a traditional demand generation model to an account-based one, let’s get into the specific metrics to track.
One important point to note throughout all of your account-based measurements: your entire team should operate from one scorecard. This will ensure everyone is working toward shared goals and will help you work together to communicate account-based influence on organizational success and revenue.
Let’s take a look at the metrics you need to measure at every stage of your account-based demand generation program.
In order to know how far you’ve gone, you first must capture where you already are. Important baseline metrics to gather right away include:
- Pipeline metrics
- Pipeline from target accounts ($)
- Days from first touch to open opportunity
- Days from open opportunity to closed-won deal
- Revenue: Your monthly revenue is a good starting point. Be sure to make apples to apples comparisons from the same time the previous year.
- Average contract value/customer lifetime value
- Win rate
Engagement is quintessential to account-based demand gen. It’s a key indicator of overall effectiveness and should be measured at various levels.
To start, you’ll need to define what meaningful engagement looks like for your company. In other words, what type and volume of engagement qualifies an account as sales-ready? The criteria for meaningful engagement will be different for every organization, but you can set your own benchmark using the following model. We recommend diving into your current open opps’ journeys and using their pre-opportunity engagement levels as a baseline.
Sample Model for Meaningful Engagement
__ total website visits from __ people
__ visits to high-value webpages from __ people
__ content downloads from __ people
__ email opens from __ people
Keep in mind that this is an example of a more complex model for meaningful engagement. There’s nothing wrong with keeping it simple and saying that meaningful engagement for you is 10 website visits from 4 people at an account.
Once you understand what meaningful engagement looks like, you can start tracking the following engagement metrics.
- Engagement rate: The % of your target accounts engaged in any capacity
- Rate of meaningful engagement: The % of accounts engaged at your agreed-upon meaningful engagement threshold
- Deanonymization rate: The % of unknown website visitors from best-fit accounts that you’ve converted to contacts over a given time period
- Account penetration rate: The # of target personas engaged per account
- Time from first touch to meaningful engagement: How long it takes to convert accounts from first touch (including anonymous web visits) to a meaningful level of engagement
- Cost per engagement: How much money you’re spending on paid channels to get your best-fit accounts to engage
- Avg. cost per engagement from first touch to open opportunity
- Avg. cost per engagement from open opportunity to closed-won
Finally, once you’ve been running account-based deman gen programs for a period of time, you’ll want to review how your they’re contributing to won deals, customer retention, and expansion revenue. This will help you attach these initiatives to the business’ bottom line and connect the dots between demand, engagement, and revenue. Look at:
- Closed-won deals from target accounts (#)
- Net-new revenue from target accounts
- Customer retention rate (%)
- Expansion revenue
As with any marketing strategy, there are near endless KPIs you can track. While the above will help give you clear insight into the efficacy of your demand generation program, every organization will have specific metrics that are crucial to them. Use the above as a guideline, but take into account, you may have some specific KPIs that will matter most to you and your stakeholders.