Boring Business Intelligence Reports Can Revolutionize Your Creative Agency
Agency managementAgency reportingBusiness intelligence
Read time: 6 minutes
As the owner of a creative agency, you’re ultimately responsible for making sure all is running well with your company. You have the best of intentions for your team, your clients and yourself, but sometimes you can’t find the information you need to make some key decisions and have to rely on your gut instinct and best guess alone.
What if you were able to access a few key effective pieces of information that could give you the information you need so you didn’t have to make your best guess around important decisions? What if this information could help you see how to fine-tune what is already working well at your agency and fix some of the areas that are broken or not optimized as well as they could be?
These key effective pieces of information are known as Business Intelligence Reports. They’re widely used in many other industries and can be very effective for the highly creative and client-service-driven business of an agency.
In this article, I’ll explain the key business intelligence reports we at Function Point think you should pay attention to, answer the question of why, and show you the results that can be yours if you can harness this information for your own agency.
The Business Intelligence Reports Agency Owners Need to Read
1. You need a reliable report on your agency’s Productivity.
2. You need a reliable report on your agency’s Profitability.
From these two areas, you can answer questions such as:
Is my team productive and happy?
Hint: an overworked team is rarely happy.
Which clients are most profitable for us?
Hint: the fair but demanding client may be more profitable than you realize, which can help you change your attitude towards serving them.
Which type of work is most profitable for us?
Hint: this is how those other shops can confidently specialize in specific types of work. They know which work is their most profitable and they focus there, and only there.
Are our retainer clients a profit center or a black hole of never-ending servicing? Hint: just because retainer or subscription clients bring in steady revenue, it doesn’t mean you’re keeping much of it, or are you?
How do I win more?
Hint: By knowing what capacity your team actually has, what is your best/most profitable work, you can be laser-focused on the work you excel at and brings in the most profit, thereby setting your agency up for current and future success. Whether success to you means growth in size, capacity, or in the percentage of profit, these reports can help you get your business to where you want it to be.
These reports answer the questions::
● Where is your team spending their time?
● How much time is your team spending on billable client-focused activities vs. administrative work, business development and other tasks?
● Where is time being wasted or not spent on the right activities?
Can you answer this question?
Are you assigning the right work to the right people? Proper workload management gives you the information you need to plan confidently for hiring employees or freelancers.
By planning ahead you’ll avoid the scenarios we’ve all come up against: Paying unnecessary overtime costs and having enough time to find the right talent for the job. As a result, you’ll reduce the risk of having to hire less qualified people or pay a premium for rush jobs.
Another way a productivity report can help is by anticipating busy or peak periods by using historical data. Does your agency have a natural ebb and flow to its workload? Reviewing historical data lets you see the information you need to plan – as odd as that may sound.
It’s not enough to know whether you are profitable or not. You need to know why. Which clients are most profitable?
Viewing your profitability by client lets, you see where you may be over-servicing or where projects require more revisions than the budget allows. Having this information is powerful as you can adjust your pricing to properly account for the issues that may be hurting your bottom line.
Or, maybe the over-servicing and a high number of revisions are not entirely your clients’ fault. Are your salespeople discounting too much? Are they overselling your team’s capabilities? Are you working with too many clients who are not your ideal fit? This type of report will help you see if you are doing any of these profit-robbing activities.
What is your monthly burn rate?
How much money does it cost to open the doors and turn the lights on? Not paying enough attention to your “monthly burn” is one way that retainer clients can get over-serviced. Since they are “always” there, your team may feel a little more loyalty or devotion and tend to pick up additional work for them. While your team means well, this is costing you money.
What type of work/projects are most profitable?
You may find that website production is much less profitable than expected or that content production is a gold mine for your company. Knowing this, you can investigate the reasons why. This may help you to reallocate talent to certain work. This kind of reporting also helps you to identify the type of work your agency excels in. From there, you can decide if you want to direct your sales efforts towards getting a more profitable type of work. Finally, you can move forward with the confidence to specialize if specialization has always been your goal.
Set yourself a goal to gather this type of information from your own internal company reporting and set aside an hour at the end of next week to review it. The time invested will be well worth it. If you’re having challenges pulling this type of reporting together in a timely (less than a day) fashion, you may want to consider an all-in-one agency management software like Function Point that centralizes all of your data and information in one spot and has been developed specifically for the business of creative agency management.
To find out about the types of business intelligence reporting available to all Function Point agency subscribers, download the <<Business Intelligence Reports for Your Agency>> ebook.