Rethinking ABM ROI Metrics: Time for a Paradigm Shift

Measuring B2B marketing success is broken, and it’s costing companies millions.  

‘What gets measured gets managed,’ Peter Drucker famously said. But what happens when what we’re measuring in B2B marketing is fundamentally flawed? What are we really managing then? In this post we’ll discuss one of the more painful aspects of B2B marketing – why is it so hard to measure?

Let’s be honest, folks—the metrics we’re using to measure B2B marketing success are about as suited for the job as a square peg for a round hole. Here’s the kicker: most of these metrics are borrowed from our B2C counterparts. And don’t get me wrong; B2C knows how to woo individual consumers. But B2B is a whole different animal, one with multiple heads called “buying groups”. Using B2C metrics to measure the effectiveness of a B2B marketing campaign is like using a teaspoon to measure a waterfall. You’re just not capturing the full picture.

Why is it broken?

So, why does this misalignment happen? Let’s roll back the tape. B2B marketing took a page out of B2C’s playbook because, historically, that’s where marketing started. The digital age only exacerbated this mismatch. With click-through rates, impressions, and individual conversions taking center stage, we’ve lost sight of what’s really important in B2B: the collective decision-making process and the longer-term relationships. In B2B, you’re often not convincing just one person to click “buy.” You’re navigating layers of management, procurement officers, and technical gatekeepers. One conversion metric is hardly the story.

Classic Attribution’s Downfalls

Let’s face it, classic attribution models like “last click” or “first touch” are rather simplistic when applied to the intricate webs of B2B sales cycles. These models tend to give undue credit to specific touchpoints—say, a white paper download or a single sales meeting—without capturing the aggregate impact of multiple interactions over time. It’s a bit like saying the last domino knocked all the others down when, in fact, a chain reaction was involved.

The Incremental Approach: Seeing the Big Picture

Incremental measurement, on the other hand, goes beyond isolated events to evaluate the true incremental impact of your marketing activities. Instead of asking, “Did this particular webinar lead to a sale?” you’ll ask, “How much more likely is a buying group to make a purchase if they engage with our webinars compared to if they don’t?” This approach captures the nuanced influences that a range of marketing activities can have on the complex decision-making processes in B2B buying groups.

Guiding Decisions and Strategy

The beauty of incremental measurement is that it helps you make data-backed decisions based on actual behavioral changes in your target audience. You can allocate budgets more efficiently, understanding which activities move the needle the most for specific buying groups. For instance, you might find that interactive workshops contribute significantly more to final purchasing decisions among tech companies than white papers do. Armed with this insight, you can direct more resources to developing workshops tailored to this segment, optimizing your marketing mix for greater ROI.

Example: Webinar vs. White Paper

Scenario:

Let’s say your company offers both webinars and white papers as part of your marketing strategy. Your classic attribution model shows that a majority of sales in the past quarter were last touched by white papers. Consequently, you might be tempted to pour most of your budget into creating more white papers.

Classic Attribution Results:

White Papers: 70% of final touchpoints before sale

Webinars: 30% of final touchpoints before sale

Incremental Measurement Approach:

Instead of just looking at the last touchpoint, you set up an experiment. You split your buying groups into two sets. One set (Group A) receives invitations to both webinars and white papers, while the other set (Group B) receives only white paper invitations.

After running the campaign for a quarter, you compare the sales conversion rates between the two groups.

Incremental Measurement Results:

Group A (Webinar + White Paper): 15% conversion rate

Group B (White Paper Only): 9% conversion rate

This suggests that the presence of webinars made buying groups 6% more likely to make a purchase.

Analysis

Classic Attribution would have led you to invest more heavily in white papers, which seem to be the ‘final touch’ in many sales.

Incremental Measurement, however, reveals that webinars actually play a significant role in influencing buying groups even if they aren’t the final touchpoint. As a result, you discover that webinars have a strong incremental impact on conversion rates and deserve a fair share of the budget.

In this hypothetical example, incremental measurement helps you identify the collective impact of your marketing efforts, whereas classic attribution would have had you chasing after a potentially less effective strategy. Armed with the insights from incremental measurement, you can allocate resources more efficiently for better ROI.

The Road to Implementation

Of course, transitioning from classic attribution to incremental measurement won’t happen overnight. You’ll need to set up control groups, execute test campaigns, and collect enough data for meaningful analysis. But the benefits, from more effective budget allocation to improved sales alignment, are worth the elbow grease.

Your Next Steps

So, what’s next? Take a hard look at your current metrics. If they’re more about flash than substance, it’s time for a revamp. Let’s start focusing on metrics that reveal the cumulative impact of our B2B marketing efforts on the people who truly matter—the buying group.