Ask 100 agencies how they measure success, and odds are you’re going to hear some iteration of the same thing.

It will involve revenue, profits vs. losses, time, resources, and any number of other things that might show up on a financial report or a revenue report.

The tendency to focus on “lagging indicators” such as numbers, financials, revenue, & profit, is human nature.

But what if there was a better way to measure success? What if numbers weren’t the only metrics that mattered? What if there were a host of other metrics that were just as important, if not more so, than those numbers?

Tim Williams, a founding partner of Ignition Consulting Group joined the Innovative Agency podcast recently to talk about the metrics that he thinks are just as important as numbers.

For so many agencies, the focus is on things like billable hours, or billable time, which Tim says is really the ultimate lagging indicator. It’s a measurement of what’s already happened.

The far more important question to ask is, “what are the factors that are happening within our firm that are creating success?”

But how do you measure those factors? What are they?

Services

The first metric that will help you measure success is your services.

To what extent do you have a thorough method of understanding your client’s business? What  they do and who they help? What are their pain points? What problem in the marketplace are they uniquely qualified to solve? And how about WHY they do it?

Once your agency has a command of these details, do you have a solid strategy tailored to your client’s uniquely desired business result? To their culture or mission?

Once the agency has this alignment with the client, is it evaluating the client’s successes, not just your own firm’s? If your clients aren’t successful, they’re not going to be your client for very long – this causes the churn we see agencies spend so much time trying to fix. One agency Tim worked with took this focus on client results to the next level by putting all its agency awards and trophies in storage, replacing them with samples and displays of the successes their clients achieved as a result of the agency’s contributions.

Staff

Let’s face it. Without a successful team, your clients, and eventually your firm, aren’t’ going to be very successful either.

What is your agency’s onboarding process for team members? Do your incoming employees feel connected to the agency culture? Are they welcomed into the firm, already set up with all the tools they need to be successful? Are new team members well educated about the kinds of clients your agency serves, the ways that it serves them, and its point of view about the work?

Make sure that your offboarding process is equally as robust. Have an exit process that minimizes disruption, and ideally also positions an employee’s departure as an opportunity for the team member and the agency to both learn from their experiences together.

Lastly, are you ensuring that the professional development and training offered to your employees is robust, appropriate, up-to-date, and easily understandable?

Self-Promotion

How do you market your own agency? If you’re hoping to be taken seriously, you’ve got to make sure that you’re marketing the value your agency brings in a way that can directly contribute to your customer’s success, as well as your own.

So many agencies see their own marketing efforts as an afterthought, because they think that what they really should be focused on is paying client work, or short-term financial matters, and their own promotion takes a back seat to this. But better advance work around your agency’s marketing and its alignment with the right kinds of potential clients is a small hinge that swings bigger doors later.

Another consideration is your criteria for identifying and selecting the ideal prospective clients looks like.

How are you vetting clients? Are you sitting down with them and really learning about their  business so that you can evaluate fit ? Are you doing your best to ensure that they can’t walk away from the table without saying to themselves, “They get me – I want to do business with them?”

Systems

Systems create sanity in your agency’s business.

Do you have a good project management system that is capable of tracking and measuring all of these things in a way that transcends just hours and timesheets?

Can you accurately track and measure customer success? Can you track your employee training? Can you track the onboarding and offboarding procedures?

Most importantly, are you tracking these things the same way that you would track the things that show up on a financial statement ?

These metrics are subjective, and they require judgement. But in professional services, the most important metrics are subjective, and they require judgement.

Track these subjective numbers any number of ways, whether a scale of 1 to 10, an  “Agree or Disagree,” or simple checklists. The beauty of subjective metrics is that you can use your best judgement when determining the best measurement criteria.

The crucial thing is not which method you’re using to measure them, but that you are measuring them and tracking them and paying attention to them. They tell a big party of the story of your agency’s success, just like any balance sheet can.

This post is based on an interview with Tim Williams from Ignition Consulting Group. To hear this episode, and many more like it, you can subscribe to The Innovative Agency Podcast.

If you don’t use iTunes, you can listen to every episode here.