Insights
Study: The metrics tracked by agencies that have profit margins above 20%
What metrics are most commonly tracked in agencies?
The Study Research Report Pricing and Controlling in Agencies (Hubspot Partner Publication) shows:
- No surprise: 9 out of 10 agencies regularly check their revenues
- After all: 74% track their profit (Not in the chart: 63% also measure profitability per project)
- Remarkable: Only about 1 in 3 agencies track the number of leads generated.
- Surprising: Only 21% of agencies track their utilization rate (ratio of billable hours to hours worked)
Source: Research Report Pricing and Controlling in Agencies (Hubspot Partner Publication)
Which metrics are actually crucial?
Knowing sales and profit and breaking them down by customer, project or employee is important - but these key figures relate to the past. As a basis for decision-making, it is crucial to use KPIs that are action- and future-oriented:
Utilization rate
The utilization rate - the ratio of billable hours to hours worked - predicts tomorrow's profit. If the utilization rate is too low, it is still possible to react in time, make decisions and have an impact on upcoming profits. But only every fifth agency is aware of this.
Leads generated
The number of generated leads of today indicates the revenue of tomorrow. So if it becomes apparent that the number of new leads is not sufficiently high, the agency’s sales activities can be stepped up in time before sales dry up.
What do the most successful agencies do differently?
If we look for some sort of secret to success, it's interesting to compare the least profitable agencies with the most profitable.
According to the study, it is twice as likely that particularly successful agencies track these 3 metrics:
- Conversion Rate Leads-to-Customers
- Revenue per Employee
- Customer Satisfaction
Source: Research Report Pricing and Controlling in Agencies (Hubspot Partner Publication)
Quick Insights
➜ The best metrics are action and future-oriented.
➜ Utilization rate is more or less "tomorrow's profit".
➜ Generated leads are practically "tomorrow's revenue".
➜ The most profitable agencies also focus on: Customer satisfaction, revenue per employee, leads-to-customer conversion rate.