What are KPIs?

Understanding how your creative agency is performing and if there are any areas that need improving is a crucial part of staying competitive against other agencies. This is where KPIs come into play. 

KPIs or Key Performance Indicators, are a measurable value that tracks the effectiveness of various business goals, as well as identifying areas that need improvement. KPIs can vary between businesses but their main aim always stays consistent, to determine performance and progress towards desired objectives. 

KPIs measure the goals of your agency against actual data, this helps to ensure that decisions aren’t being made based on assumptions, enabling you to gain a competitive advantage and ultimately achieve long-term success. 

Why KPIs are important 

KPIs are the silent workers behind your creative agency, they keep your projects on track and your clients satisfied. There’s a vast amount of KPIs so first of all it is important to take time to identify what goals you want to accomplish, once these have been identified it will be clearer which KPIs will be important in tracking your progress towards your goals. Below are just a few examples of how KPI’s could enhance your creative agency.

KPIs for progress and success 

By setting measurable KPIs, you can track the progress of projects and determine whether you’re on target to reach your agency’s goals. For example, a KPI may be to win a certain amount of clients by the end of the year, by tracking customer leads and successes from that, whether these were through advertising, networking or referrals and comparing it to the KPI, you can see if you are on track with your goal or not yet meeting it and show which sales channels are working well and which did not create any new opportunities. 

They can also help determine what success means to you and your business, be it client satisfaction, average project turnaround time, project efficiency, and the list goes on. 

For example, project turnaround time KPIs will determine the time taken from the beginning to the end of a project. A shorter cycle time will mean a faster return on investment and room to take on more projects. 

Turnaround time will highlight the efficiency of your procedures, it can highlight if projects aren’t getting completed in the required time frame which could then delay other projects, and therefore force you to look deeper into ways of improving efficiencies, whether with new software or tech, or working on better ways to create more accurate time estimates on projects.

KPI’s and Project Profitability 

KPIs can provide insights into financial performance. By tracking KPIs such as gross margin, return on investment (ROI), or cash flow, businesses can identify areas where they are profitable and where they may need to make changes to improve their financial performance. 

Monitoring both revenues earned and percentage growth over time can give ideas of your agency’s health and trajectory. 

You may set specific KPIs for annual revenue goals, this can then be broken down each quarter and measured against actual revenue to see if you are hitting targets. If not, you can then come up with a plan to get this back on track. Was this due to seasonality? Not enough monthly recurring clients? Is your client retention rate decreasing etc? 

These kinds of KPIs can also highlight which projects are worth your time and which ones are draining you without realising. Categorising projects based on their profitability can help you make the right strategic decisions about which projects you want to pursue moving forward.

KPI’s and Technology

Relying on outdated data and figures is risky in the world of business, technology can help to guide you in real-time. Finding the right tech and software for your agency is key in helping you see if your current KPIs are on track. 

For example, you cannot compare a project’s performance against its KPIs if you have not got the correct data from the project itself. So, having software like Productive, Harvest or Monday.com, that can track your estimated time on the projects vs actual project time, the estimated costs vs actual costs, the expected timeline etc can really help to show if you are meeting your goals.

KPI’s in your creative agency  

Mastering KPIs isn’t about being number-obsessed, it’s about using those numbers to gain insights on how you can grow your agency, keep track of your goals, and analyse and improve your procedures.

If you want to find out more about how to identify the right KPIs to track in your agency, check out this blog.