In any agency bringing on clients is core and remains the number 1 challenge. You will need a set of agency client acquisition metrics to do this with repeatable effectiveness.
To put your agency on the right growth trajectory means you need to acquire new clients on a sustainable and predictable basis. That calls for a consistent, process driven approach. No two ways about it, and that will require a full set of agency client acquisition metrics – the instrumentation for the job
What is not measured, cannot be managed.
With all the moving parts that comprise an agency, it requires effective management; and effective management requires measurement. This series will uncover and explain the central metrics for your agency that will help you manage more effectively. You can find out about the other metric categories at cremabusiness.com.au/blog. In helping my clients to achieve extraordinary results they learn how to harness the power of measurement; to move their agencies from chaos to control, from ineffective to super-efficient.
In the long run, your mastery of the client acquisition process will be the biggest driver of your agency’s commercial success. I liken this aspect of business to the petrol or gasoline pump for your agency. And just like your car, you need to keep your tank full to ensure you get maximum speed and range.
In your agency, acquiring clients is, as you probably know, not a simplistic exercise. It’s a process of some complexity. In general any business process evolves and improves over time as our understanding of the challenge develops. The key ingredient that makes this work is the set of measurements you make. What I’m about to go through is a very detailed and comprehensive exposition of the key agency client acquisition metrics that help my clients make some of their biggest strides.
Within the opportunity generation component of client acquisition, obviously we need to measure the number of new opportunities. Usually new opportunities are driven by a combination of various marketing activities and prospecting. So it’s important at the same time to measure and track the source so that you can see which strategies are the most effective at producing new opportunities.
The next of the agency client acquisition metrics is the number of qualified prospects generated from the opportunities. This metric gives us a very useful gauge of the effectiveness of our opportunity generation in terms of the quality and suitability of the opportunities it’s producing. You should also be capturing the date that the prospect qualifies and if they did not qualify, the reason they did not, in case it’s related to our marketing or lead generation.
Obviously it’s preferable that all opportunities qualify, but if they don’t, perhaps there is something you can do or say to reduce the amount of time you spend trying to qualify the opportunity or even get them to self-qualify. For example if you build websites and you have decided that the minimum spend you were prepared to deal with is say $5,000; if you put that on your website then people with a lesser budget will be discouraged from getting in touch which would save your salespeople time.
Conversion rate is a measure of the effectiveness of your sales process and potentially the proficiency of your salespeople. In almost all agencies the sales process is not a one-step process and depending on how this is set up there could be anywhere between two and eight valuable additional metrics within the conversion process itself. The conversion rate needs to be looked at as an overall number, then broken down by individual salesperson as well, to get the full picture. This will highlight weaknesses, where sales training or support is needed, as well as opportunities to reduce the cost of selling.
On of the agency client acquisition metrics that many miss is the ‘loss-reason’. Unless you track this with sufficient resolution it will be hard to review your sales activities and take the most appropriate and effective steps to improve conversion effectiveness. An important and very necessary sales management responsibility.
Closed business metrics
For all successful conversions, you need to also track the date and the value that the order is placed.
The time elapsed between the two tracked dates is another valuable metric that will help with sales process improvements and managing salesperson effectiveness.
So from these metrics what can we learn?
Well firstly, which lead generation strategies are the most productive. If we track these all the way through, we can measure:
- which lead generation strategies generate the most value in the shortest time.
- From conversion data, the effectiveness of our overall sales effort as well as that of specific individuals.
- From loss-reason, where we need to improve our process.
We can combine some measurements with data from your accounting system and from that you can work out:
- the cost per lead and
- the cost per acquisition.
These are direct inputs into our future marketing planning and budgeting.
So if you measure all of this you will arm yourself with almost every bit of information you need to drive a successful client acquisition operation.
Is it the whole picture? Well from a data and measurement point of view, just about. There are further insights that can be derived from this and there are some CRM systems that do a really good job of breaking this down.
If you look at the agencies that have grown their businesses at an above average rate you’ll find that their command of these concepts and data has played a pivotal role in their success. They’ve been able to use sustain sales growth to generate predictable and sometimes extraordinary profits.