Agency guide

Agency management intelligence: the insights you need to drive agency performance

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Want to take your agency from good to GREAT?! Silly question? BUT, are you tracking the right stuff to make it happen? Are you tracking the right stuff at the right time? Are you doing anything with it?

To move forward, you need to know what’s going on in your agency. And what to do about it when it needs to be better.

Business analysis often skips the to-do list, especially when you’re too busy working in your business (the fun stuff). But you could be missing out on a game-changer.

In this guide, we explore the business intelligence you need to drive performance and shape decision-making that can elevate your agency from good to great.

#1 Profitability

Agency profitability is one of the key metrics you should be reporting.

The more profit you make, the more money you have available to reinvest in your people and growth strategy each year and ultimately increase your agency's value.

Healthy, sustainable agencies look to achieve above 20% profit margin (or EBIT).

But it's essential you drill down a bit further. It can be easy to fall into the trap of thinking big, long-term clients and projects are the most profitable. But how much of that revenue actually translates into profit?

Working out your most profitable areas can give you a big competitive edge. It might feel like turning down work or ditching clients is against the grain. But hanging on to unprofitable stuff just makes you busy... without making you successful. Revenue for vanity, profit for sanity!

Project profitability

Which projects generate the most profit and why? Is it the type of work, a phase within a project that takes longer, the people working on it, a project manager, an account handler or a client?

Are your client services team accurately estimating projects rather than re-engineering from the client budget?

Are they charging for additions when there is scope creep? Here’s a sobering thought. If you overservice by just 10%, you’re effectively working for free for five weeks of the year. So look carefully at whether you’re sticking to your estimate. If projects are regularly running over time without being charged or even acknowledged, why is this? Over-servicing: 5 reasons agencies do it, and how to stop it

When you’re running a job, Synergist tracks the actual time and costs incurred to give you a real-time view of estimated, quoted and invoiced values vs actuals. You can see all jobs at a glance on your ‘Job list’ or get more detail from the individual job/phase dashboards. You can also break complex projects down into phases and stages, which allows you to estimate and report on project profit in more detail. Plus, you can run reports by job type, service type, account manager or team for profitability analysis.

Example Job performance dashboard in Synergist

The BenchPress Profit and Growth report found those agencies which measure gross profit by project are likely to be the most profitable. Learn more about measuring and boosting project profitability

Top tip: it’s not a good idea to measure profitability retrospectively, particularly for larger projects. Reviewing in real time helps you spot any projects that could overrun, so you can instantly get things back on track. Synergist allows you to set alerts when your timing and budget reach a certain percentage, giving you advance notice to keep things running smoothly.

Client profitability

The three metrics for a good client are Fortune, Fame and Fun.

Tracking client profitability helps you identify who is really boosting your agency's profit margins... and who could be draining them.

Do you know who your 'treasure clients' are, those who are making you money?

Do you 'vampire clients' are, those who take up more of your time than they're paying for?

Understanding the value of your clients can help you prioritise sectors, services, time and attention accordingly.

Example Client profitability report from Synergist Management dashboard

Synergist tracks each of your client's revenue, gross and net profit, plus 'Client investment' — the difference between the recommended charge and how much you've billed across all their jobs. Ultimately, it’s a measure of how much you've under- or over-recovered across all their jobs so you can ensure each client is profitable. Learn more about measuring and improving client profitability

Example client performance dashboard in Synergist showing client investment

Top tip: Acquiring new clients costs money – think marketing, sales, pitches and procurement. So make sure you're tracking your time and cost investment, so you can recoup it when you win the work.

#2 Sales pipeline

Getting your pipeline forecasting right helps you estimate what resource you’re likely to need, see any peaks and troughs and track ongoing trends.

For example, you might notice short-term spikes in work for a certain team, which could be managed using freelancers. But if these spikes prove to be more long term, you could look to recruit. Similarly, you can spot any gaps which might need filling. But it’s only by analysing the data that you’ll know which is best.

Forecasting can also support your strategic planning, helping you identify opportunities and risks. Plus, it’s a great client management tool, establishing whether your client spending is on target.

Most agencies create a pipeline forecast report, looking at what's coming in from new and existing clients. But are you properly drilling down into the numbers?

Top tip: Weighting an opportunity based on the likelihood of it coming to fruition will give you a more accurate forecast. For example, if the value of your job is £4000, and you add a 75% weighting (aka probability), your pipeline will forecast £3,000. In Synergist, you can add a % weighting to each opportunity. Synergist will then calculate the ‘Weighted value’ of the opportunity for you and give you a more accurate forecast.

Opportunity list in SynergistExample opportunity list with percentage weighting in Synergist

New business forecasting

To achieve year-on-year growth, you should aim for 25% of your income to come from new business.

One key question to ask is, ‘Are we generating enough new leads, contacts, and opportunities?’ This means understanding your current win ratio and average sales value and calculating from there. So, how many opportunities do you need to create to achieve your targets, and how many conversations do you need to have to achieve that number?

Other things to monitor are whether you’re attracting the right opportunities and the right type of work, taking an in-depth look at what opportunities you’re winning/losing, who to, why and where from.

Sometimes, in agencies, it’s easy to spend a lot of time analysing opportunities you win rather than lose, but it’s important to track the reasons for the losses. Why aren’t you winning these? Is there any commonality, like a specific type of job? On the flip side, when you win opportunities, are you tracking things like which sectors or services the business is coming from?

For wins and losses, it’s about identifying patterns to help you create more wins.

Arguably, the most important thing to track here is the time and cost to close, both on opportunities you win and lose. Are you continually monitoring the time you spend on new business pitches? You might know an opportunity is worth £100k, and when you get to 5% of this value, take stock and ask if you’re in a position to win the work. Is it worth putting in more time if the value of the work isn’t high enough?

Essentially, tracking can help you make better decisions.

Sales dashboardExample Sales dashboard showing new and existing client forecasts in Synergist

Existing client pipeline

Retaining existing clients is crucial for sustainability, and uncovering new opportunities within those accounts is the most cost-effective way of growing gross profits. 

Top tip: Don’t derive more than 20% of gross profit from a single client. To reduce risk if you lose a client, ensure your agency has a balanced revenue stream from a range of clients. 

It’s important to forecast how much revenue you expect to gain from your existing clients and track against your client targets.

Is there year-on-year growth or decline? Are your clients aware of all the services you offer? Is your team actively promoting and cross-selling other areas of your agency that can help boost client spending with you?

Are your clients happy? This is obviously a key barometer of success. You could be creating brilliant content and have a superb strategic plan, but if you’re not measuring client happiness you’re not necessarily creating something that’s sustainable for growth.

Top tip: 55% of clients want more from their agency:

  1. More services
  2. More knowledge and productivity
  3. More focus on value for money

Your ultimate measure of client happiness is: would they recommend you unreservedly without caveats?

Check our Agency Works webinar: The key to client-agency chemistry

As with new business, it’s a good idea to track won and lost opportunities and how much you’re investing. If you have incurred costs, can you recoup that over the lifecycle of working with the client?

# 3 Capacity

Planning and forecasting capacity is the natural next step from your business pipelines. It informs so many different things, such as your hiring and freelance decisions and new business efforts.

The gap between what you’ve estimated, what you‘ve booked and what you still have available is key information. You can see what skills and time you need to sell to keep all your teams busy and, conversely, if you’ve oversold anything to the point that teams will be overstretched. This, in turn, helps you make the right decisions about getting freelancers or recruiting if the increased workload is likely to be long-term.

Synergist scheduling dashboard

Example capacity dashboard report in Synergist

Sometimes you can manage these peaks and troughs by working collaboratively with clients to manage their deadlines to fit your capacity. This is good for your agency, but also means clients can be assured they’re getting the right people working on the job.

You can also look at your systems for working with freelancers to make sure everything is as tight as possible. Are you booking them in advance, is there a PO system in place, are they doing timesheets, who is managing the freelance budget? Getting all of this process in place can make sure you’re making the right decisions about freelancers and not seeing a negative impact on your gross profits.

Agencies do sometimes find the type of projects they’re offered are different to their existing proposition, so if you think you might need different skillsets in place then you need to accommodate and plan for that so new team members are up to speed in time.

There isn’t an easy or quick fix to capacity planning, but getting your processes in good shape will pay dividends.

Top tip: Understanding your team’s true capacity is key to avoiding burnout (or boredom)!

#4 Utilisation and recovery

Utilisation is a key agency metric and one that, if projected and planned efficiently, can work wonders with your profit.

First, you need to make sure you’re accurately calculating utilisation targets rather than just making an arbitrary assessment. For example, if you think a designer can have 80% utilisation, do they have enough capacity and enough chargeable work coming in to facilitate that?

It’s a good idea to talk to staff members to understand the full nature of their role. You can also look back at your historic data to see what utilisation's been to date to give you an idea of what you could expect in the future.

From here, you can track utilisation vs. targets. Monitoring how much time has been spent on chargeable and non-chargeable work vs. target utilisation rates lets you instantly see if your team's time is being used as planned. For example, a creative could be spending an hour a week on client update calls. Spotting things like this can help you take steps to save that time. 

Performance dashboard

Example team performance dashboard in Synergist 

Have you sold enough hours to keep everyone chargeable and busy? Nobody wants to be seen not to be busy in an agency. Admin and internal time can actually be quite a red flag in terms of what’s going on in your agency.

In some cases, team members might log more time than estimated on a particular job purely to meet their own targets or sometimes because they simply haven’t got anything else to do.

Read how ArmstrongB2B marketing agency improved utilisation with Synergist


Your utilisation rates can tell you how much time someone spends on chargeable work. Taking this a step further, your recovery rate is how much of this utilisation time you ultimately charged the client for.

Usually, agencies can’t charge for 100% of their time for a multitude of reasons. The classics are underquoting, overservicing, or taking a hit in the present for a bigger win in the future. The main reason, though, is inaccurate timesheets, when people post them late and can’t remember what they did (or even not posting them at all).

The best thing you can do to improve recoverability is train your team on how to push back when a project needs rescoping, reestimating, and requoting. The brief is king when it comes to effective estimating and quoting. It needs to be thorough and crystal clear so estimates are based on facts rather than assumptions. Enough time needs to be allocated to do a good job, and the team needs to be made aware of any delivery challenges. Set up parameters for your clients to work within, so it’s quite clear when they ask for something that is out of scope.

Industry benchmarks: The industry average utilisation rate is 62.5%. Aim for +90% recoverability.

#5 Employee engagement

So far, we’ve looked at how to use your reporting to monitor and manage your financial metrics. But all of this is pretty useless if you have an unhappy team.

"Great people create great agencies: environments where truly exceptional work, and ground-breaking client outcomes, are the norm." Alliance of Independent Agencies 

Do your people love coming into work, do they feel supported and fulfilled? Of course people move on from time to time, but a mass exodus of unhappy people doesn’t say a lot of good things about your agency.

As with your clients, would your employees recommend you as a great place to work?

This starts with creating a positive culture that unites your people together and gets the best out of them. Your agency's culture is fundamentally shaped by the behaviours of your people, which stems from your values and purpose. Have you clearly defined the values and expected behaviours? Are you using these to recruit and assess employee performance? Are your employees genuinely committed to your mission and understand how their roles contribute to it?

An agency’s greatest asset is its people, so pay careful attention to nurturing them. Do they feel engaged and absorbed in their work, a valued member of your team? Do they feel trusted, empowered, sufficiently challenged and supported in their development? Is the team fostering a supportive environment that provides psychological safety? Are you celebrating achievements and recognising contributions?

By cultivating a culture where employees are passionate, you are positioning your organisation for success.

Top tip: Aim for employee turnover below 10% each year

Data is good. Insightful data is great.

Tracking, monitoring and analysing are key elements of a successful business, and should run in tandem with the creative side of your agency. By uncovering the most meaningful insights, you can shape every aspect of your agency, from capacity to clients, profits to pipeline.

To learn how Synergist can help you uncover intelligence and help your agency grow, book a demo