045 - KPIs to keep your agency out of trouble with Drew McLellan

In this chat with Drew McLellan, you’ll learn about key financial KPIs that you should keep an eye on. These KPIs are crucial health indicators that indicate how well the agency is doing, and help you to continually turn a profit.

We also dig into some research around when organisations choose to hire an agency versus building an internal team.

Topics include:

• Dashboard financial KPIs for agencies
• Why AGI (adjusted gross income) matters so much
• What makes up Cost of Goods
• How to know when to hire
• Scoping projects effectively
• Using pricing tiers to sell more easily
• Tracking billable hours
• Utilisation
• Tracking write offs and write ups
• The ratio of billable to non billable people

Resources mentioned in the episode

• Agency Management Institute
• Drew’s list of metrics
• A sample P&L
• The research we discuss

Other resources

• Understanding your business health with KPIs

Connect with Drew

• Facebook
• LinkedIn
• Twitter
• Instagram

About Drew

Drew McLellan has worked in advertising for 30+ years and started his own agency, McLellan Marketing Group in 1995 after a five-year stint at Y&R and still actively runs the agency.

He also owns and runs Agency Management Institute (AMI), which serves 250+ agencies small to mid-sized agencies (advertising, digital, marketing, media and PR) every year, so they can increase their AGI, attract better clients and employees, mitigate the risks of being self-employed in a such volatile business and best of all — let the agency owner actually enjoy the perks of agency ownership.

AMI is the only agency network that is run by an active agency owner. It offers:

• Public workshops for agency owners, leaders and account service staff
• Owner peer networks (like a Vistage group or AAAA’s forums)
• Private coaching/consulting for agency owners
• Annual primary research with CMOs and client decision makers about their work with agencies
• The highly praised podcast Build A Better Agency

Drew often appears in publications like Entrepreneur Magazine, New York Times, Washington Post, Agency Post, AdAge, CNN, BusinessWeek, and many others. The Wall Street Journal calls him “one of 10 bloggers every entrepreneur should read.”

He also speaks at leading agency conferences and is often cited in agency centric content for his expertise in the industry.

When he’s not hanging out with clients or agency owners and their staff, Drew spends time with his daughter and pondering why the Dodgers can’t seem to win the World Series.

Drew has a Master’s Degree from the University of Minnesota but alas, he cannot remember their fight song.