How to measure the success of an agency retainer

Phil: So Lauren, you've a number of years of experience now managing successful marketing retainers for our clients. Could you just give me an insight into how you measure success in that relationship?

Lauren: Yes, so when we talk about measuring success, it's really important that we move past the vanity metrics. So, instead of obsessing over things like keyword ranking or traffic volumes, we should be really focused on real outcomes and what that is, is lead quality, quality signals and visibility for your ideal customers. That's what we should really be looking at.

Phil: So boiling down to those metrics that make a sort of almost a commercial difference, or give the client a tangible benefit.

Lauren: Exactly, so the agency that you're with should be able to come to you and say ‘this is the ROI, this is what you're getting for your money’ and normally, when we work with a client, we aim for a 10 to 1 ROI. 5 to 1 ROI is good, but really the right retainer and the right agency will pay for itself.

Phil: Yeah, so obviously you know you're aiming for a sort of, in an ideal world, a 10 to 1 ROI. So that's a, you know, a tenfold revenue return on the spend with the agency, whether that be, you know, the ad spend or the fees to us. So once you've got that 10 to 1 ROI, how do you go about measuring whether you've got success?

Lauren: So there's a simple way of doing it. It's looking at the lifetime value of your customer, so not just the sales that they initially make and then from there, there's quite a simple calculation that we use on everything. But it's not always as simple to get that number for return on investment because, as we know, there are activities that can't always be attributed to ROI. So it's really important that from the beginning, you decide on the key metrics that are going to prove commercial value. So you know, if you've got a website and you're interested in being more visible to your customers, what are the metrics that prove that? You know, is it looking at lead quality? At the end of the day, everything that you plug into your website should always have a commercial value and it should be tangible, so you should be able to see it in increased enquiries or lead quality. But it's really important to decide what that metric is right at the beginning.

Phil: And I guess as well, you know, ROI there can be variables in how you measure it, but ultimately you've got to measure the ROI and the lifetime value of that client, just not simply on that initial spend.

Lauren: Yeah exactly, that's really important. And going back to vanity metrics, we know that a lot of agencies out there will come to you with a report and say ‘oh you know we've increased traffic and we've increased engagement by this amount’, but what does that translate to commercially? That's really important.

Phil: So I guess what you're saying is, there's no value to be added by offering masses of detailed metrics as a smoke screen. When actually you want to see very simply in one, you know, perhaps in one screen how we're delivering value and an ROI on that spend.

Lauren: Yeah exactly and you'll know as well, so when we go and give our performance reports to clients, it's not uncommon for us to pull up Google Analytics, Google Ads to actually show them exactly what we've been working on rather than just giving them the PDF. It's really important to immerse them and get them on board with understanding what exactly we've been working on and what that translates to for their business.