How do you recommend companies adjust their KPIs as they move to an ABM-centric marketing approach?

If you're still on an inbound (MQL) model, I would start by pivoting every report through the lens of "target account vs. non-target account".  

•  # of campaign responses
• # of opportunities generated
• $ pipeline generated
• ACV
• # closed won
• $ closed won

What matters gets measured. Over time, (ideally) it will reflect that target accounts drive the biggest impact to the business. (If not, it likely means that you'll need to take another look at the target account / ICP criteria.)

In my experience, that usually is the catalyst to change how can we drive more "target account" pipeline? To do that, we'll need to think differently about engaging with an account & identify more of those leading indicators. Then, you can start thinking about the KPIs and what it means for an Account to be "Qualified".

I'd recommending focusing a lot more on engagement and less on lead generation or MQLs. In general, you should know the people you want to engage in each account, and you'll have them already populated in your CRM. This completely eliminates the need for any "lead source" tracking to prove effectiveness. Additionally, you'll want your team to keep engaging the important few until they're ready to take the next step with your company, so measuring actual engagement with marketing materials/programs is key. Several tools out there help with this such as Demandbase and 6Sense, but it can also be homegrown if you have the appetite for it. If I were to oversimplify a lot, assign points based on activities, roll them up to the account level, ensure they decay over time, and then set thresholds based on what matters most for your business. Maybe you need a lot of engagement within a few key contacts, maybe you need the whole village to get activated! If you're not sure, start somewhere, backtest, measure, and iterate. 

• The first KPI to monitor is leads generated from target accounts. The rest is all noise. If an organization has adopted an ABM centric approach, your sales reps are working on named accounts, so even if you engage with accounts outside that list and generate leads, you won’t find any takers. So, focus all efforts only towards those accounts.

• The other big shift is from pure lead generation to account engagement. How many CXOs have you engaged with? How many mid-level, senior stakeholders are engaging with your campaigns (content, events, etc.).

• As you build this, over a period of time, you can measure increased marketing footprint within that account.

• For existing customers, customer advocacy becomes a key metric as existing business units then become your evangelists as you upsell to other business units.

ABM is an upmarket play which means sales cycles are longer and the buying committee is bigger. Marketing needs to target, engage, and convert multiple persona within an account. This means the account will have multiple engaged leads/contacts. Hence it is important to switch to an account-based scoring model to get a holistic view of the account. 

KPIs to track include: 

• Target Accounts Engaged

• Marketing Qualified Accounts  (MQAs)

• Opportunities from target accounts

• Closed-won deals from target accounts
  

With ABM, marketing and sales are working together at every stage of the funnel starting from aligning on the target account list for 1:1, 1:few, or 1:many campaigns. The ultimate goal is to win more, win big, and win faster. So we also need to track win rate, average contract value (ACV) and deal cycle time.

• Win more: ABM should drive higher win rates 

• Win big: ACV would be higher 

• Win faster: Deal cycles would be shorter

In any strategy, it's not just about how much you measure but also what you’re measure and why. It's about setting the barometer for what success looks like and how KPIs are monitored, discussed, and leveraged to drive improvements. It's beneficial to break your KPIs into Operational North Stars – these are the Key Results (KRs) that every GTM TEAM should strive for. They are the metrics on your CEO's daily dashboard.

Remember, ABM is about targeting specific audiences and accounts with more specific and relevant marketing tactics that focus on who they are, the problems they have and how your solution is differentiated in solving for their problems.  Therefore, your company's KPIs should align with this approach:

• Percentage of target accounts in your marketing database

• Percentage of target personas generating MQLs

• Percentage of pipeline originating from named accounts

• Percentage of target personas as the primary contact

• Percentage of expansion pipeline from named accounts

• Percentage of revenue from named accounts

• ACV (Average Contract Value) from named accounts

• Average Deal Cycles from named accounts

All of these should have quarterly goals set.

You'll need to adjust the way you measure account vs lead activity:

• Instead of measuring leads generated, measure account engagement and influence

• Instead of measuring marketing qualified leads MQLs, measure account qualified opportunities

• Instead of measuring pipeline creation, measure pipeline and account progression

• Instead of measuring customer acquisition cost only, measure account lifetime value and develop ROI of CAC <> LTV

Then align those KPIs with sales goals

• Work with sales to define key account milestones and goals

• Develop KPIs that measure progress towards these milestones and goals

• Regularly review and update KPIs as needed with sales

• Have recurring performance reviews and deep dives

A marketing organization that is set on a traditional waterfall for KPIs (ex: AQL, MQL, etc.) will need to adjust metrics for an ABM approach. This does not mean the entire org needs to rip and replace their current success metrics, but when it comes to the specific ABM motion, it should be held to a different funnel than a traditional demand generation motion.

The funnel structure I like to start with is as follows -

1. Identify: This is the holding pen for accounts that are identified to go to market, but have yet to launch. For example, if you are expanding into a new vertical like healthcare, having this holding pen is great when communicating what is to come to executives and other company leaders.

2. Surround: This represents the accounts currently surrounded with ABM tactics in market, but have yet to engage with those channels.

3. Engage: This represents the accounts that have our ICPs engaged, but have yet to hand raise to connect with sales. Leveraging an ABM tools like 6sense or DemandBase is great for this reporting.

4. Breakthrough: This represents the accounts that have hand raised to speak with sales. The funnel doesn't just end here. It's vital for the ABM owner to ensure these meetings occur, give guidance to sales on multi-threading in order to drive more penetration within the account and also have a strategy in place when a meeting doesn't end up coming to fruition.

The above funnel is a starting point and can be tailored to a particular organization or even a PL motion. Having north star KPIs per funnel is important - ex: how many accounts are you benchmarking to breakthrough with?

Overall, when proving out an ABM approach, compare the results between ABM accounts and non-ABM accounts. More often then not, you'll see a large lift in SDR efficiency, buying committee awareness, account engagement, meetings set and pipeline/ARR/revenue.

I largely view ABM as a way to help drive revenue targets. The KPIs should be in support of this not in comparison to it. Some of these KPIs will include:

• % Closed won of target accounts
• Pipeline generated from target accounts
• Engagement rates from target accounts

There also needs to be alignment across the entire business on this go-to-market motion. It can’t be the ABM department in a silo. This means being okay with saying no to potential opportunities that are not part of your target list which your KPIs will also reflect.

You may also find this question helpful: What is your methodology for identifying the right company targets in an ABM strategy?