Teamleader is a CRM and business management software aimed specifically at agencies. In its latest guide, the tool looked at the essential KPIs to successfully develop an agency and ensure its good health.
The guide is based on concrete feedback from several experts: Jan Belletti, co-founder of Sixtine, Jeanette Eder, Head of Operations at DISXT, Maarten Bosmans, Chief Financial Officer of The Reference and Margaux Rogot, CSM and Team Leader at Noiise.
The essential KPI is obviously turnover, all agencies seek to develop and generate growth.
To monitor it regularly and accurately, it is important to rely on tools such as Teamleader, which can provide you with reports and an overview of your situation.
For a relevant analysis of your turnover, you will have to take into account the seasonality during the year and the moments with strong activity, or conversely a weaker activity. This allows you to better distribute your costs based on the seasonality of the business.
Another point to monitor: recurring sales. They ensure good financial stability and perfect predictability.
The second KPI to watch closely is your profitability. In order not to blindly pilot your business, you need to know your profitability per client, per team or even per employee. This is essential in determining the margins of the agency as a whole.
To know your margins, and therefore your profitability, you also need to have a clear view of your costs. Concretely, to measure your margin, you need to have as much information as possible about each project: estimate, hourly rate applied to the client, workload distribution, hours dedicated to the project, cost per employee mobilized, external costs, overheads…
Again, these calculations can be tedious by hand. A management tool like Teamleader will allow you to centralize all this information.
KPIs to measure your customer relationship and your performance
Measure customer satisfaction
Teamleader recommends in its guide to focus on the satisfaction of your customers. You can measure this in a “transactional” way, asking for feedback after every important contact, with for example a satisfaction survey. You can also measure it in a “relational” way, establishing an exchange with the client to discuss the collaboration and the latter’s feelings.
Know your average rate
Projects are based on estimates and budgets with an hourly rate. But there are often discrepancies, sometimes huge, between the hourly rate defined upstream of the project and reality: longer deadlines, modified deadlines, additional teams mobilised… The average rate lets you know if the hourly rate you are offering corresponds to reality, and therefore to make better predictions for your future projects.
The “First Time Right” or FTR metric
Another interesting KPI proposed by Temaleader in its guide: the FTR. It allows to measure a work immediately validated by the customer, without return from him. An important metric for verifying that projects are on schedule, on time and on budget.
The billability of a project
The 4th KPI proposed by Teamleader is the billability of a project, in order to optimize margins. Project billability tells you the number of billable hours, but not how much you’ve actually billed the client.
For accurate estimates, you’ll also need to look at average hourly wages and your performance.
These analyzes must allow you not to overestimate or underestimate your billability and therefore to remain profitable.
The other chapters of the guide are dedicated to cash flow, billing, but also team management. A complete ebook, based on concrete examples and expert advice from recognized professionals.