Sample List of Key Performance Indicators
For these specialized service companies, key areas to monitor may include: core business, delivery (or production), client services, marketing, and financials.
Core business - main category
Knowing the core business and sticking to the core is essential for a small creative service company to run well. Sub-categories may include having a mission statement in place, a vision statement, and an understanding of the services delivered.
This is how the business is built strategically and not in a reactive manner - meaning a web-design company will scramble to figure out how to write a brochure, or a writer will stay up late at night trying to understand how to code the latest WordPress theme.
Many agencies work as general contractors. Evaluate the sub-contractors like flash programmers or writers to see how well they fit with the core business.
Delivery stages - main category
Chart how quickly the initial comps are delivered on a project, revisions made, and the final drafts delivered. Evaluate how well the creative works together in understanding the client goals and needs.
Client service - main category
Setting expectations is a sub-category example. Write down the goals and stages of work. Hand the information to the client as the agreed-upon guideline and outcome. Help the client to understand the company's artistic style and work style.
Outline possible obstacles to completing the entire project and later determine how well client requests were handled. The client, or the customer, is not always right. How challenging is it to handle the attitudes and do the requests slow down the process?
Setting expectations properly lays the foundation for a long-term client relationship.
Marketing
Once a few, satisfied customers are established, referrals become critical to getting new customers for a creative service company.
Measure the most effective marketing channels and determine how much time is spent to obtain one client.
Where do most new leads come from? How well is the company's own web site optimized to bring in leads? Is spending time at local chamber mixers paying off after a three month or six month time frame?
Financials
I worked for an interactive agency where cash flow was always behind even though there were key Fortune 500 clients on board. Staff was told clients were always behind on their invoices and yet we continued spending time on the projects. The company limped along and eventually went out of business.
Jackie David, author of the blog Technoccountant's Perspective, is an accountant in La Canada, California. She works with creative service companies and advises business owners to use outside professionals. "Web design businesses and small ad agency owners may get in trouble by ignoring the client who won't pay, or not handling the books well. A bookkeeper, or accountant, may only need to work a few hours a month and be the one to follow-up on outs or keep receipts and income in order."
Agencies need to bill on time. Sending invoices on schedule is a sign the company is on top of the relationship and its business model.
Tracking key performance indicators should not be complicated. Keep indicators to no more than five so the whole team can understand the outcomes. Try and group sub-categories into the main categories and make sure the business goals match the creative abilities of the team.