Key performance indicators are crucial for the success of your agency.
They allow you to track the most important areas in your business in order to gauge growth and decline. Without them, you’ll be operating in the dark.
You won’t know what’s working and what isn’t. Sound like a situation you’re in? No problem.
Today we will be reviewing the most important metrics that you need to start measuring.
Let’s get into it!
1. Cost per acquisition
Do you know how much you spend on marketing and advertising to acquire a single client? If not, you might be flushing your budget down the drain.
Understanding how much a client is worth to you and how much it takes to acquire them helps optimize campaigns. Agencies measuring CPA can find ways to reduce costs while acquiring more accounts.
CPA can be easily measured by taking the amount you spend on marketing and advertising then dividing it by how many customers it generates.
Here’s a CPA calculator to help you out.
Enter the number of recent customers you’ve acquired followed by the costs and it will give you an estimate.
Once you know how much it takes to acquire a customer, you can reshape pricing, onboarding, and other steps to ensure you’re profiting.
Similarly, agencies can measure cost per lead in the same manner. Instead of calculating how much is spent to acquire paying clients, you can crunch the numbers on how much budget is spent obtaining leads.
2. Website bounce rate
If users come to your website and leave quickly, what does that tell search engines? That your content isn’t important. Your rankings and traffic can decrease as a result of this.
It’s important for agencies to measure their bounce rate closely via a tool like Google Analytics. 41-55% is average, but it also depends on the industry you’re in, so no need to sweat bullets if yours is higher.
Let’s first see how we can start measuring the bounce rate to determine how to improve it later.
Measuring bounce rate with Google Analytics
You can start tracking your bounce rate by connecting Google Analytics to your website. Navigate to the admin panel and click “Create Property” with the correct account selected.
Enter the URL of your website along with your industry and timezone on the next page. Click the blue “Create” button and Google will begin collecting data on your website.
If you’ve never connected Google Analytics before, it will take up to one week for data to display.
Once it does, navigate to the page listings under “Behaviour” and “Site Content”. Here you can see the total bounce rate for your website along with the bounce rate for individual pages.
Next, let’s look at a very similar and equally important user experience metric you can also check in Google Analytics.
3. Average time spent on page
How long a user spends on your website is another UX based metric agencies should keep a close eye on.
Let’s imagine two scenarios:
- Users are spending several minutes or more on your website during each visit.
- The average time a user spends on your website is approximately 30 seconds.
What does this tell a search engine? You guessed it: it’s not the best content for their users. And what do you think they’ll do with it? Push it down the search engine results page.
On the other hand, if users spend a healthy amount of time on each page, clearly the content is useful and relevant. Seeing as UX metrics became an important ranking factor since the RankBrain update, this is a number you can’t gloss over.
Take the same steps as you did for measuring the bounce rate on Google Analytics to find the average time spent on a page via the “Behaviour” and “Site Content” tabs.
It’s ALSO believed that anything from 2-3 minutes is good, so use that as a benchmark.
4. Website sessions
Your website traffic is more important than you might realize. Sure, you can have a killer conversion rate with lower amounts of visitors, but the more users you have, the more potential leads there are to convert.
This is exactly why website sessions are a crucial metric to watch. It’s a signal of whether your traffic strategies are working and how optimized the user experience of your site is.
Sessions are one of the first metrics displayed on the default Google Analytics dashboard, as well.
Don’t get sessions confused with users or page views, though.
Sessions are the total number of individual sessions all of the users have made on your site combined.
If someone visits your website five times from the same device, that would count as one user but five sessions.
Agencies should strive to improve both sessions and session durations through high-quality content and website structure.
5. Customer lifetime value (LTV)
Knowing how much a client is worth to you over time helps shape your advertising and marketing budgets accordingly. This is what we call a customer’s lifetime value.
It’s often one of the most overlooked metrics and can lead to overspending if not calculated. It allows agencies to forecast how many clients and what closing percentage they need to hit revenue goals.
This means you’ll know how much budget to put into other areas of your business relative to what you bring in, as well.
Your agency can use the following formula to calculate the average lifetime value of customers:
Applying this formula against your previous client base will give you an exact dollar amount to expect with future accounts.
6. Social shares
Imagine the content your agency produces going viral without spending a dime. That’s possible thanks to social sharing.
Social pings and shares are not only a ranking factor on Google, but gauge the quality of content you publish.
Agencies can keep track of how many social shares they receive with a free tool like SharedCount. Begin by entering URLs of blog posts and click “Analyze URLs”.
A new field will appear below the text box displaying all of the social shares the URLs received on different platforms.
Discovering what type of content and topics are shared the most will allow your agency to double down and produce more of them for similar results in the future.
Backlinks are like a voting system. They tell search engines that other sites vouch for the quality of your content and overall site. If more sites vote for you, you fly up the ranking ladder.
Nonetheless, we have some bad news. Many agencies don’t have a clear backlink building strategy. Are you one of them?
While links will naturally occur as you publish great content that’s worth linking to, agencies can speed up the process with a defined strategy.
But let’s talk numbers first. Backlinko analyzed over one million search results and found that the first result had 35,000 links on average.
Depending on which keywords you’re targeting and what competitors you’re up against, you won’t need exactly tens of thousands of links. Actually, you don’t even need a fraction of that.
Search engines are smarter than ever. They can easily decipher a high quality and lower quality link in the blink of an eye.
That’s why you need to invest in evergreen link building strategies like guest posting. This will help your agency increase brand exposure while gaining links and referral traffic all at once.
8. Keyword rankings
The amount of keywords your agency’s website ranks for directly affects organic traffic. Think of it as a search engine market share. If your website’s URLs are seen more by people, you receive increased amounts of traffic.
Keeping an eye on how many keywords you rank for also allows an agency to measure how their SEO efforts are paying off.
We recommend using a free tool like SEMrush to keep tabs on keyword rankings. https://www.semrush.com and enter your domain in the top search bar.
You will be able to see how many — and which — search terms you rank for under the “Top organic keywords” section.
Track how many new keywords your agency ranks to make sure you’re consistently growing in the search engines. Furthermore, pay close attention to the terms that drive the most traffic to ensure they don’t fluctuate too much.
9. Churn rate
The number of clients that you work with and later lose is known as your churn rate.
Too many agencies focus on working with clients on one-off projects, never to collaborate again. Why go through the client acquisition process repeatedly when you can simply work with one in the long term?
David Ogilvy, the father of modern advertising, once said that the goal of every agency should be to work with big clients that you can keep for life. Those are words to live by.
Some agencies such as Doyle Dane Bernbach boast an insane 98-99% client retention! What can you do to achieve a similar number? Many things.
Firstly, consider upselling other services. If you offer web design, for example, you could also offer SEO, copywriting, social media marketing, etc. This allows your agency to generate more revenue while extending the life of the client relationship.
Secondly, maintenance packages on websites and other properties will reduce churn rate and keep you working with clients over a longer time period.
Don’t underestimate the power of creating a deeper relationship with clients, too. This means giving them amazing customer service and getting to know them deeper than just business.
As a matter of fact, 100% of business professionals say meeting face to face is essential for long term success with clients.
Do you know exactly how much you’re spending on advertising, what a client’s worth to you, and their lifetime value? You should.
Measuring these metrics and other KPIs will keep your agency on track to hitting revenue goals and consistently growing.
Nonetheless, it can be easier said than done. While Google Analytics and other freely available tools will help you track this information, sometimes it’s not enough.
That’s why we recommend you book a demo with Morphio today. Our platform allows you to quickly set KPIs, gain insights into their performance, and move towards your goals easier.