I worked with 400+ agencies so far.
Most agencies go out of business in 1-2 years because they don't track the right metrics.
Here are 9 KPIs every agency owner must know (and how to calculate them):
1) Customer Acquisition Cost (CAC)
It's the total amount of money you spend (marketing + sales expenses) to acquire one customer.
Formula:
2) Customer Lifetime Value (CLV)
It's the total amount of revenue you can generate from one customer throughout your relationship with them.
Formula:
3) Monthly Recurring Revenue (MRR)
It's the total amount of revenue you can consistently predict every month.
Formula:
4) Cost Per Lead (CPL)
It's the amount you're spending to acquire one lead.
Formula:
5) Lead Conversion Ratio
It's the percentage of leads that turn into clients.
Formula:
6) Net Profit
Your net profit (or bottom line) is the total amount of money you're left with after all the expenses.
Formula:
7) Monthly Churn Rate
It's the percentage of customers who leave your agency every month.
Formula:
8) Lead Velocity Rate %
It calculates the growth of leads month-over-month, helping you predict future revenue.
Formula:
9) Primary Lead Sources
Though it isn't technically a metric, it helps you identify which sources are contributing the most to your agency's growth.
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