I’ll probably write about this topic on many occasions. I’ve owned a digital agency for eight (8) years now. I’ve been in the interactive industry for close to twenty (20) (eeek). Being a bit of a data wonk, you would think by now that I would have the right metrics down cold to measure the agency’s performance. I do and I don’t.
Let’s start with what I consider the key elements to even try to measure in some way, shape or form:
- Financial performance – you got to make money
- Client satisfaction – happy clients make great advocates
- Employee satisfaction – happy employees produce great work
- Delivery performance – the work we actually produce, how long it takes, how good it is, etc.
- Sales & Marketing effectiveness – you must feed the beast
What I have learned over time is that you cannot provide too much data or it is overwhelming to people who are not knee deep in it. So, I have tried to boil it down to the one’s I find pack the most punch. These metrics and perhaps more importantly, their cross section can help you to rather quickly assess the health of an interactive agency. They are:
- Revenue – actual and forecast
- Gross Margin
- EBIT (Earnings Before Interest and Taxes)
- Employee Satisfaction
- Client Satisfaction
- Utilization Rate
- Cash on Hand (and Debt)
I’d love to have or see good industry benchmarks for this stuff. I’ve searched repeatedly, and have found some, but generally you need to look really hard for digital agency specific stuff. Certainly you can get some data from SoDA, 4 A‘s and the like.
I’ll pick up my thoughts on actual benchmarking in another post. Anybody else found a good source of this stuff?