Welcome to our article on key account-based marketing metrics! As a business owner or marketer, it's crucial to track and measure the effectiveness of your marketing efforts. But when it comes to key accounts - those high-value customers that are essential to the success of your business - it's even more important to pay close attention to the metrics that matter. In this article, we'll delve into the specific metrics you should be measuring to ensure your key account-based marketing strategies are driving results and helping you reach your business goals.
CLV is a prediction of the total amount of money a customer will spend on your products or services over the course of their relationship with your business. It's a key metric for companies to consider because it can help you understand the value of a customer to your business and make informed decisions about how much to invest in acquiring and retaining them.
To calculate CLV, you can use the following formula:
CLV = (Average sale price x Number of sales per year) x Average customer lifespan
This calculation takes into account the average amount of money a customer spends with your business each year, the average number of years they remain a customer, and the average sale price of your products or services.
By understanding the CLV of your customers, you can prioritize your marketing efforts and allocate your resources towards retaining and upselling to your most valuable customers.
Retention rate is a measure of how well a business is able to keep its customers over time. It's calculated by dividing the number of customers at the end of a period by the number of customers at the beginning of that period, and expressing the result as a percentage.
For example, if a business had 100 customers at the beginning of the year and 90 customers at the end of the year, its retention rate would be 90%.
Retention rate is an important metric for companies to track because it can indicate the health and stability of the business. A high retention rate means that customers are satisfied with the products or services being offered and are likely to continue doing business with the company. On the other hand, a low retention rate may indicate that the business is losing customers and may need to address issues with its products, services, or customer experience.
There are a variety of strategies that companies can use to improve retention rates, such as offering excellent customer service, regularly updating and improving products, and providing personalized experiences to customers.
Customer acquisition cost (CAC) is the total cost a business incurs in acquiring a new customer. It's an important metric for companies to track because it can help them understand how much they need to spend to acquire new customers and if their customer acquisition efforts are sustainable in the long term.
To calculate CAC, you can use the following formula:
CAC = (Total sales and marketing expenses) / (Number of new customers)
This calculation takes into account all of the expenses a business incurs in its sales and marketing efforts, such as advertising, sales commissions, and marketing staff salaries, and divides it by the number of new customers acquired during that period.
By understanding CAC, companies can make informed decisions about their sales and marketing budgets and optimize their customer acquisition efforts to ensure they are acquiring customers in a cost-effective manner. It's also helpful to compare CAC to the lifetime value of a customer (CLV) to understand if the investment in acquiring a new customer is worth it. If CAC is significantly lower than CLV, it may be a good investment for the business.
NPS is a measure of customer satisfaction and loyalty. It's a simple way for companies to gauge how likely their customers are to recommend their products or services to others.
To calculate NPS, companies ask their customers a single question: "On a scale of 0 to 10, how likely are you to recommend our company to a friend or colleague?" Customers who respond with a 9 or 10 are considered "promoters" and are likely to be loyal customers and advocates for the business. Customers who respond with a 7 or 8 are considered "passives" and are somewhat satisfied but not necessarily loyal. Customers who respond with a 0 to 6 are considered "detractors" and may be unhappy with the business and are likely to spread negative word-of-mouth.
NPS is calculated by subtracting the percentage of detractors from the percentage of promoters. For example, if a business has 50% promoters, 40% passives, and 10% detractors, its NPS would be 50-10 = 40.
NPS is a helpful metric for companies to track because it can provide insight into how satisfied and loyal their customers are and can help identify areas for improvement. It's also a useful tool for benchmarking against competitors.
Customer satisfaction is a measure of how well a business is meeting the needs and expectations of its customers. It's an important metric for companies to track because satisfied customers are more likely to make repeat purchases, recommend the business to others, and provide positive word-of-mouth.
There are a variety of ways companies can measure customer satisfaction, such as through surveys, focus groups, or online reviews. It's important for companies to regularly check in with their customers to understand their level of satisfaction and identify areas for improvement.
Improving customer satisfaction can help companies increase customer loyalty, reduce customer churn, and improve overall business performance. Some strategies for improving customer satisfaction include offering excellent customer service, regularly updating and improving products or services, and being responsive to customer needs and feedback.
Upselling and cross-selling are sales techniques that companies use to encourage customers to purchase additional or complementary products or services. Upselling involves offering customers a higher-priced or upgraded version of the product or service they are considering, while cross-selling involves offering customers related or complementary products or services.
Tracking upselling and cross-selling success is an important metric for companies because it can help them understand the effectiveness of their sales efforts and identify opportunities for growth. It can also help companies increase their average order value and improve customer loyalty.
To measure upselling and cross-selling success, companies can track the percentage of customers who make additional purchases or the amount of revenue generated from upsells and cross-sells. This information can help companies optimize their sales strategies and identify which products or services are most effective at driving upsells and cross-sells.
Brand advocacy is the act of promoting a brand or product through word-of-mouth or other forms of promotion. It's an important metric for companies to track because it can have a powerful impact on the success of a brand. Consumers are often more likely to trust and consider products or services that have been recommended by friends or family, and brand advocates can help generate positive word-of-mouth and drive sales.
There are a variety of ways companies can measure brand advocacy, such as through social media mentions, online reviews, or customer referrals. It's important for companies to regularly track and measure brand advocacy to understand the impact it is having on their brand and identify opportunities for improvement.
To encourage brand advocacy, companies can focus on building strong relationships with their customers, offering excellent products or services, and providing a positive customer experience. By creating loyal, satisfied customers, companies can turn them into advocates for their brand.
Lead generation is the process of attracting and identifying potential customers for a business. It's an important aspect of the sales process, as it helps companies build a pipeline of potential customers to target and convert into paying customers.
Conversion rate is the percentage of leads that are successfully converted into paying customers. It's an important metric for companies to track because it can help them understand the effectiveness of their sales and marketing efforts and identify areas for improvement.
To measure lead generation and conversion rate, companies can track the number of leads generated and the number of those leads that are successfully converted into paying customers. This information can be used to optimize sales and marketing strategies and identify which tactics are most effective at generating and converting leads.
There are a variety of tactics companies can use to generate leads, such as content marketing, social media advertising, and email marketing. It's important for companies to regularly track and measure lead generation and conversion rate to ensure they are effectively attracting and converting potential customers.
ROI is a measure of the profit or loss generated by an investment. It's calculated by dividing the net profit generated by the investment by the cost of the investment, and expressing the result as a percentage.
For example, if a business invests $100 in a marketing campaign and generates $200 in revenue, its ROI would be 100%.
ROI is an important metric for companies to track because it can help them understand the profitability of their investments and make informed decisions about where to allocate their resources. By calculating the ROI of different investments, companies can determine which investments are most effective at generating a positive return and prioritize those over others.
It's important to note that ROI is not a measure of the absolute value of an investment, but rather a way to compare the profitability of different investments.
A marketing qualified lead (MQL) is a potential customer who has demonstrated an interest in a company's products or services and has the potential to become a paying customer. MQLs are typically generated through marketing efforts such as content marketing, email marketing, or social media advertising.
MQLs are different from sales qualified leads (SQLs) in that they have not yet reached the point of being ready to make a purchase. MQLs may need additional nurturing and education before they are ready to become paying customers.
Tracking MQLs is an important metric for companies because it can help them understand the effectiveness of their marketing efforts at generating leads and identify opportunities for improvement. By regularly reviewing and analyzing MQL data, companies can optimize their marketing strategies to better target and convert potential customers.
A sales qualified lead (SQL) is a potential customer who has been identified by the sales team as having the potential to become a paying customer. SQLs are typically generated through marketing efforts such as content marketing, email marketing, or social media advertising, and are then qualified by the sales team based on specific criteria, such as budget, authority, need, and timeline (BANT).
SQLs are different from marketing qualified leads (MQLs) in that they have been vetted and are ready to move into the sales process. They are considered more likely to become paying customers and are typically prioritized by the sales team.
Tracking SQLs is an important metric for companies because it can help them understand the effectiveness of their lead generation and qualification processes and identify opportunities for improvement. By regularly reviewing and analyzing SQL data, companies can optimize their sales strategies and better target and convert potential customers.
Key account-based marketing is a strategy that focuses on building relationships with high-value customers who are essential to the success of a business. To ensure that key account-based marketing efforts are driving results and helping companies reach their goals, it's important to track and measure a range of key metrics. Some of the key account-based marketing metrics that companies should be measuring include customer lifetime value, retention rate, customer acquisition cost, net promoter score, customer satisfaction, upselling and cross-selling success, brand advocacy, lead generation and conversion rate, ROI, marketing qualified leads (MQLs), and sales qualified leads (SQLs).
By regularly tracking and analyzing these metrics, companies can optimize their key account-based marketing strategies and drive results.
Want to target individual accounts using personalization? Try Markettailor for free.
In the highly competitive construction industry, it's more important than ever for companies to stand out and effectively target their marketing efforts. Account-based marketing (ABM) is a strategic approach that focuses on targeted outreach to specific, high-value accounts rather than broad, mass...
In the financial industry, where competition is fierce and margins can be thin, effective marketing strategies are crucial for success. One such strategy that has gained traction in recent years is account-based marketing (ABM). ABM is a targeted, personalized approach to marketing that focuses on...