ABM Budget Forecasting: 5 Steps for Beginners

Samuel Hall
5 days ago
14 min read

Updated: 4 days ago

Want to maximise your ABM budget and avoid wasting resources? Here's a simple 5-step process to help you allocate funds effectively, focus on high-value accounts, and improve ROI:

Set Account Tiers: Divide accounts into three tiers based on revenue potential and strategic value. Allocate more budget to high-value Tier 1 accounts.
Calculate Cost-Per-Opportunity (CPO): Determine how much you're spending to generate qualified sales opportunities and use this to refine your budget.
Use Scenario-Based Forecasting: Plan for growth, steady conditions, or downturns by creating flexible budget models.
Leverage Technology: Use tools for real-time tracking and adjustments to stay on top of campaign performance.
Monitor and Improve: Regularly review key metrics like engagement, pipeline velocity, and ROI to optimise your strategy.

Why it matters: Companies using ABM report a 97% higher ROI and 73% more pipeline from target accounts. Align your sales and marketing teams, focus on the right metrics, and continuously refine your approach.

Quick Tip: Start small by targeting a few high-value accounts and scale as you optimise your strategy.

So What? How to forecast your marketing budget

Step 1: Set Up Account Tiers for Budget Allocation

To make the most of your ABM budget, it's essential to categorise your accounts into tiers based on their value. This method ensures your resources are allocated where they can deliver the greatest returns. After all, not every prospect offers the same potential for revenue or strategic importance.

"Not all accounts are created equal. You should allocate more resources to accounts that have the potential to drive the most revenue and/or strategic value for your business." - Terminus

The numbers back this up: companies using ABM report 25% seeing deal size increases of over 50%. Additionally, 86% of marketers say ABM improves their win rates. These results are a direct outcome of targeted resource allocation, which account tiering helps you achieve.

Group Accounts by Revenue Potential

Start by establishing clear criteria to divide your accounts into tiers. Focus on factors like revenue potential, company size, strategic alignment, and conversion likelihood. Your Ideal Customer Profile (ICP) should guide this process.

Tier 1 accounts: These are your most valuable prospects, typically with annual contract values of £250,000 or more. They deserve fully tailored, one-to-one campaigns. Think large enterprises that could become cornerstone clients or strategic allies.
Tier 2 accounts: Falling in the £50,000 to £250,000 range, these accounts benefit from segment-based personalisation through a one-to-few approach.
Tier 3 accounts: These are smaller prospects with potential values under £50,000. For this group, industry or role-based messaging via a one-to-many strategy works best.

A great example of this in action is LiveRamp. By zeroing in on just 15 top-tier clients that matched their ICP, they achieved a 33% conversion rate in just four weeks and saw customer lifetime value grow by 25 times over two years.

However, don't focus solely on revenue. Consider other factors like industry fit, technology compatibility, access to decision-makers, and competitive positioning. These elements can paint a fuller picture of an account's potential and help you refine your tiering process.

Distribute Budgets Across Tiers

Once you've sorted accounts into tiers, allocate your budget accordingly. The goal is to balance investment depth for high-value accounts with scalable efforts for broader outreach.

Tier	Account Volume	Personalisation Level	Budget Allocation
Tier 1 (Strategic)	10-50 accounts	Fully customised (1:1)	40-50% of budget
Tier 2 (Target)	50-500 accounts	Segment-based (1:Few)	30-40% of budget
Tier 3 (Scale)	500+ accounts	Industry/role-based (1:Many)	10-30% of budget

For instance, if your total ABM budget is £100,000 annually, you might allocate £45,000 to Tier 1, £35,000 to Tier 2, and £20,000 to Tier 3. This approach ensures that Tier 1 accounts receive the lion’s share of resources for highly personalised campaigns, while you still maintain broader outreach for lower-tier accounts.

Collaboration across teams is critical here. When marketing, sales, and customer success teams are aligned, ABM campaigns thrive. In fact, 68% of B2B organisations cite team alignment as the most important factor in scaling ABM successfully. Regular check-ins with sales can help fine-tune tier assignments and budget distribution based on real-world insights.

Keep a close eye on engagement levels, buying signals, and other key indicators to adjust tiers as needed. If an account shows strong activity, consider moving it to a higher tier - and increasing its budget allocation. Conversely, unresponsive accounts might need to be downgraded. By continuously refining your tiers and budgets, you can ensure your ABM strategy stays on track and delivers maximum impact.

Step 2: Calculate Cost-Per-Opportunity Metrics

Once you've allocated budgets across account tiers, the next step is to calculate your cost-per-opportunity (CPO). This metric is a game-changer for refining your spending strategy. By understanding how much you're investing to generate each qualified sales opportunity, you can set realistic budget expectations and make smarter decisions about resource allocation and campaign performance.

"Cost per opportunity (CPO) is a metric that measures how much it costs to generate one qualified sales opportunity from your marketing efforts." - fastercapital.com

CPO is a straightforward yet powerful tool. Whether you're presenting to finance teams, marketing colleagues, or senior executives, knowing the cost of each opportunity brings clarity and focus to budget discussions, helping everyone stay aligned.

How to Use the Formula

The CPO formula is simple: total programme costs ÷ sales-accepted opportunities. But to get accurate results, consistency is key. First, define what qualifies as a sales opportunity for your business. This could be a prospect who’s requested a demo, engaged with multiple touchpoints, or met specific scoring criteria.

Next, calculate your total programme costs. This includes every expense tied to generating new business opportunities, such as:

Salaries
Agency fees
Advertising spend
Subscriptions
Event costs
Travel expenses

For example, if your monthly programme costs are £15,000 and you've generated 30 qualified opportunities, your CPO would be £500. You can also calculate CPO for specific channels or campaigns to determine which ones are delivering the best value. When setting goals, compare your CPO to metrics like average contract value (ACV) or customer lifetime value (LTV). In challenging markets, aim for at least a 3x return on your CPO investment.

Finally, take into account factors that are unique to UK-based businesses.

UK-Specific Cost Factors

Running a business in the UK comes with specific cost considerations that can impact your CPO calculations. For instance, travel expenses and HMRC guidelines play a significant role.

Travel costs need to reflect HMRC's mileage rates: 45p per mile for the first 10,000 miles and 25p per mile after that for cars and goods vehicles. For motorcycles, the rate is 24p per mile. Additionally, if your team works remotely, you’ll need to factor in home-working costs. HMRC offers simplified expense rates based on hours worked from home:

£10 per month for 25–50 hours
£18 per month for 51–100 hours
£26 per month for 101 or more hours

Automating expense tracking can save time, ensure compliance, and provide accurate data for your CPO calculations.

Step 3: Use Scenario-Based Forecasting

Once you've established your CPO insights, it's time to take forecasting to the next level by using scenario-based planning. This method equips you to adapt to various market conditions by preparing flexible budget models. Instead of relying on guesswork, you can turn forecasting into a strategic tool, ready for growth, stability, or even unexpected challenges.

Build Baseline, Growth, and Contraction Models

Start by outlining three key scenarios: baseline, growth, and contraction.

The baseline model assumes steady market conditions with predictable growth.
The growth model anticipates increased opportunities, such as tapping into new market segments or a surge in demand.
The contraction model prepares for tougher times, like economic slowdowns, budget cuts, or intensified competition.

Here’s an example: Suppose an ABM specialist costs around £55,000 annually. In a growth scenario, their targeted campaigns might generate £275,000 in pipeline revenue. Under more moderate conditions, they might bring in £110,000. In a worst-case scenario, the existing revenue base would need to cover their cost.

For UK-specific planning, factor in variables like potential VAT changes that could impact technology expenses or corporation tax adjustments that might shrink your available budget. Currency fluctuations could also influence international campaigns, so it’s wise to include these considerations. Be sure to document key assumptions - such as conversion rates, deal sizes, and sales cycle lengths - for transparency with stakeholders.

Experiment with Key Variables

Once your scenarios are in place, test how adjusting different variables affects your ABM performance. Focus on metrics that are particularly dynamic in your business, such as engagement rates, demo-to-close ratios, or average contract values.

"By testing forecasts against a range of assumptions and business drivers (both internal and external) you can mitigate risk and better understand how the decisions you make today will impact your bottom line tomorrow." - Vena Solutions

For internal factors, you might explore how improved email personalisation could boost open rates by 15%, or how increasing account penetration by 20% might shift budget needs. Consider scenarios where your sales team's close rate jumps from 25% to 35%, or where deeper account research leads to larger deal sizes.

Don’t forget to account for external factors. For instance, an economic downturn might cut your target accounts' spending by 30%. New competitors entering the market could extend your sales cycles, or changes in data privacy laws might limit your ability to target specific segments.

Interestingly, 55% of companies don’t use scenario analysis when adjusting their forecasts. This presents an opportunity to gain an edge over competitors who overlook this step. By creating dynamic spreadsheet models - where variables can be swapped and budget impacts are instantly visible - you’ll be ready to adapt to market changes without starting your forecasts from scratch.

These flexible models will lay the groundwork for real-time budget adjustments in the next step.

Step 4: Add Technology for Real-Time Budget Adjustments

Once your scenario models are ready, the next step is to bring in technology that can track performance and adjust budgets automatically. In fast-paced ABM campaigns, manual updates simply can’t keep up. The right tech stack transforms your forecasting from reactive guesswork into a system of proactive budget management. This shift enables you to make precise, real-time adjustments to your campaigns.

Core Technology Stack for ABM Budgeting

To build an effective ABM technology stack, focus on tools that integrate seamlessly. Automation is key here, as it eliminates the time wasted on repetitive manual tasks. Your stack should include three main components: budgeting software, ABM platforms, and CRM integration.

For budgeting and planning software, choose tools with features like AI-driven workflows, rolling forecasts, and integration options. Whether you opt for a free tool or a custom enterprise solution, it’s crucial that the software integrates with your ERP system.

When selecting an ABM platform, prioritise tools that offer high-quality data, flexibility, and transparency. Look for features such as account identification, actionable insights, engagement tracking, and clear measurement capabilities.

Integration is the glue that holds your tech stack together. Your tools must connect seamlessly with CRM systems, marketing automation platforms (MAP), and campaign management tools.

If you’re operating in the UK, make sure your tools comply with GDPR regulations and can handle VAT calculations automatically. For international campaigns, currency fluctuation tracking is essential, as is the ability to adapt to different date formats and measurement units across regions.

Ease of use and reliability should also guide your choices. But before diving into specific tools, define your ABM objectives. Are you aiming to generate new leads, nurture existing accounts, or upsell to current customers? Your goals will shape your tech stack.

Beyond these core systems, additional specialised tools can refine your budgeting approach further.

Leveraging ABM Answered Resources

ABM Answered offers practical tools and resources to complement your technology stack. Their library of over 1,000 short-form videos provides quick solutions to specific budgeting challenges that might arise during campaigns.

The platform also features niche tools to optimise budget management. For example, battlecards help sales teams prioritise accounts and allocate budgets effectively, ensuring resources are focused on the most valuable opportunities. These tools integrate seamlessly with your existing systems, enhancing your overall setup rather than replacing key components.

Another standout feature is ABM Answered’s Reddit-based research tools. These provide market intelligence to guide budget adjustments. If your scenario models suggest a market shift, these tools can help validate your assumptions before you commit to significant budget changes.

The platform’s collaborative community is another valuable asset. By connecting with other ABM marketers who’ve faced similar challenges, you can gain insights that inform your technology choices and implementation strategy.

ABM Answered’s invite-only, à la carte approach allows you to test tools and demonstrate ROI without committing to a large upfront investment. Their expert interviews and curated content keep you updated on the latest budget management techniques and technology trends, helping you refine your tech stack as your ABM programme grows.

What’s particularly useful is the platform’s focus on lightweight, targeted tools. These fill gaps in your main tech stack without causing integration headaches. Instead of replacing your core CRM or ABM platform, these resources enhance your existing setup, providing specialised support for budget-related decisions.

With this tech foundation in place, you’ll be ready to move on to establishing monitoring systems that drive continuous improvement.

Step 5: Monitor and Improve Budget Performance

With your technology stack in place, the next step is to set up a monitoring system that turns raw data into actionable insights. This allows you to refine your budget strategy and maximise its impact.

Key Metrics for Budget Improvement

Tracking the right metrics is essential for improving budget performance. Unlike traditional B2B marketing, account-based marketing (ABM) focuses on account-level progress rather than individual leads. To make the most of your monitoring system, focus on three main areas: account engagement, revenue impact, and programme effectiveness.

Account engagement metrics measure how actively your target accounts interact with your marketing and sales efforts. For example, engagement scores can reveal which budget allocations are driving meaningful conversations. Similarly, account penetration rates help assess how well your programme reaches decision-makers within your target organisations. A great example comes from Hexagon, which implemented ABM strategies and achieved 60% engagement from target accounts, along with a 278% boost in click-through rates for tailored ads.

Revenue-focused metrics provide insights into your return on investment (ROI). Key indicators include pipeline velocity, which tracks how quickly target accounts progress through your sales process, and average deal size, which shows whether your budget supports higher-value opportunities. ABM often delivers impressive results here - 91% of companies using ABM report increased deal sizes, with 25% seeing growth of 50% or more. Additionally, customer lifetime value (CLV) helps you understand the long-term impact of budget decisions, a particularly useful metric for UK businesses managing VAT and quarterly financial planning.

Programme effectiveness indicators guide future budget decisions. Metrics like deal conversion rates (closed-won deals divided by total closed opportunities) highlight which investments deliver the best results. Tracking the length of your sales cycle can also reveal inefficiencies or areas where additional budget could accelerate progress.

"It's an equation. You can fulfil the promise of ABM by making certain metrics do certain things. But they have to be the metrics." – Mitchell Hanson, Senior Director of Demand Generation at ZoomInfo

Research supports the power of ABM metrics: 76% of marketers report higher ROI with ABM compared to other marketing approaches, and 86% see improved win rates. These results come from prioritising account-focused metrics over traditional lead-based measurements.

For UK businesses, it’s important to account for VAT calculations and currency fluctuations, especially if your campaigns span multiple countries. Track costs in pounds sterling and align your reporting with UK quarterly financial cycles for smoother reconciliation.

Set Up Regular Review Schedule

Once you’ve identified the key metrics, establish a regular review schedule to turn insights into actionable budget improvements. Monthly and quarterly reviews work well for balancing responsiveness with long-term planning.

Monthly reviews focus on short-term performance. Compare actual spending to forecasted amounts across your account tiers, identifying any discrepancies. These variances can point to opportunities for reallocating budget. For example, Snowflake used regular reviews to prioritise accounts and fine-tune tactics, achieving three times higher campaign attendance rates and reducing the time from opportunity to closed deals by 50%.

Align monthly reviews with your business cycles. Many UK companies schedule these just before month-end financial closes, allowing adjustments to influence the following month’s activities.

Quarterly reviews offer a deeper dive into performance trends. These sessions are especially useful during VAT return periods, simplifying financial reconciliation. Use quarterly reviews to evaluate whether your account tier allocations from Step 1 are still effective and whether your cost-per-opportunity calculations need updating. By analysing trends across multiple cycles, you can identify whether changes in account behaviour reflect temporary market shifts or more significant patterns.

Team collaboration is key during reviews. Schedule joint sessions with your marketing and sales teams to share insights and align strategies. These discussions often uncover optimisation opportunities that pure data analysis might miss. LiveRamp’s experience highlights this: by closely monitoring 15 top-tier clients, they achieved a 33% conversion rate in just four weeks and increased customer lifetime value 25-fold over two years.

When planning your review schedule, consider seasonal factors that affect UK businesses, such as holiday periods, financial year-ends, and industry-specific cycles. Adjust the frequency of your reviews during these times to remain responsive without overreacting to short-term changes.

Conclusion: Getting Started with ABM Budget Forecasting

ABM budget forecasting doesn’t have to be complicated. By following the five-step process outlined here - defining account tiers, calculating cost-per-opportunity metrics, using scenario-based forecasting, leveraging technology for real-time updates, and tracking performance - you’ll have a clear path to get started.

The best approach? Start small. Focus on a handful of high-value accounts to fine-tune your strategy before expanding. Millie Beetham, VP of ZI Labs and GTM Innovation at ZoomInfo, puts it well: "Investing in both data and technology over time gives you an 'easy button' to get to true relevancy at scale". Taking a measured, step-by-step approach ensures you build a solid foundation.

Equally important is aligning your marketing and sales teams early on. When these teams collaborate from the start, financial projections become more accurate, and both departments work together towards shared goals. This collaboration not only improves internal processes but also enhances the overall customer experience.

As you build on your initial forecasts and integrate the right technology, regular data reviews will help you refine your strategy. By using insights from key metrics, as described in Steps 3 and 4, you can make timely adjustments and improve your forecasts over time. A strong data foundation is essential for this process.

If you’re looking for tools and resources to support your journey, platforms like ABM Answered offer over 1,000 short-form video solutions and practical templates to help you fine-tune your budget forecasting. This iterative approach aligns perfectly with the step-by-step guidance in this guide.

FAQs

How do I decide which accounts belong in each tier for ABM budget planning?

To make the most of your ABM budget, categorise your accounts into three distinct tiers based on revenue potential, business alignment, and engagement levels:

Tier 1: These are your top-priority, high-value accounts that deserve the most personalised outreach and investment.
Tier 2: Accounts in this group show strong potential for ROI and benefit from targeted strategies, though with slightly less focus than Tier 1.
Tier 3: Lower-priority accounts that can be managed using broader, less resource-intensive approaches.

This tiered approach helps you channel your resources towards the accounts with the greatest impact while staying efficient across all categories.

What challenges do businesses face in calculating Cost-Per-Opportunity (CPO), and how can they address them?

Calculating Cost-Per-Opportunity (CPO) often feels like navigating a maze for many businesses. Why? It’s tough to get it right without complete data on marketing spend and lead conversions. Gaps in tracking can lead to inflated or misleading CPO figures. On top of that, pulling together data from multiple marketing channels is no small task - it’s like trying to piece together a puzzle with missing pieces. This makes it hard to pinpoint the actual cost of creating opportunities.

What’s the fix? Start by investing in reliable tracking systems. These tools can help you keep an eye on all marketing expenses and how well your leads are performing. Another key step is to regularly review your CPO metrics. Doing this not only highlights inefficiencies but also helps fine-tune your marketing strategies. The payoff? Better resource allocation and a boost to your bottom line.

How can scenario-based forecasting help my business stay prepared for economic changes?

Scenario-based forecasting equips businesses to tackle economic changes by considering multiple possible outcomes instead of depending on one fixed prediction. This method helps pinpoint critical uncertainties, evaluate how different scenarios might impact your operations, and craft strategies that can adjust to evolving conditions.

By simulating various possibilities, businesses can make better decisions, manage risks more effectively, and stay agile when faced with unforeseen challenges. This forward-thinking approach strengthens resilience, protects financial health, and helps maintain a competitive edge in an ever-changing market.