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Successful Agencies Weigh In: What Drives Agency Profitability?

Successful Agencies Weigh In: What Drives Agency Profitability?

Successful Agencies Weigh In: What Drives Agency Profitability?

With over 20 years experience in the business of project management and productivity, I’ve had the chance to speak to a lot of management teams and their creatives about what drives profitability and success for agencies. From the first market research when we initially conceived Function Point to the many inspirational conversations I’ve shared with successful agency leaders, I’ve been lucky to have agencies pull back the curtain for me and my team, to let us go behind the scenes and see how agency software can help improve productivity and profitability.

But one thing I’ve never done is sat down to compile a formal report of my findings. The data, advice and learnings I’ve collected over the years have gone into making Function Point the best that it can be, but we’ve never released these insights to the public to help other agencies compare, learn and grow. In 2017, we vowed to change that and began conducting our first ever productivity survey of our customers and other creative agencies, internal marketing teams and professional service firms.

In collaboration with the Agency Management Institute (AMI), the 2018 Agency Productivity Report is based on over 400 responses to our online North American survey that targeted creative agencies and internal marketing teams. Designed to uncover the main barriers to effective project management, productivity and profitability, we broke down stages of the creative process to understand where problems arise. As a result, we now have a far better understanding of how poor project planning can result in strained client communication, differing expectations, and the over-servicing of clients.

 

Respondents indicated that they were over-servicing more than half of their clients, and only 65% of respondents stated that the majority of their projects were profitable. In spite of these statistics, only 49% of respondents had repercussions in place to combat over-servicing. Without a solid plan in place to budget for and reduce the over-servicing of clients, agencies will struggle to grow.

 

> Download the Agency Productivity Report by Function Point

Infographic: What Marketers Look for in an Agency

Infographic: What Marketers Look for in an Agency

Putting Ideas Into Play

Putting Ideas Into Play