Why Measuring Results Is Not Enough

PR is nothing without measuring results — impressions, positive mentions, traffic, lead acquisition, brand sentiment, tweets, likes, upvotes. The list goes on and on.

We are getting better at understanding how to quantify what works and what doesn’t. CMOs, PR agencies, and brand managers are finally speaking the same language. Are things perfect? No, of course not. But we have a common framework to measure success — and that’s a major step forward.

But what happens after the results are measured?

Campaign Results Are Only the Beginning

You might have achieved your campaign goals. Perhaps your client is happier than ever. But how did this engagement affect your team? Did it take longer than you had planned or budgeted for? Was it profitable? Did you have to turn down other work to hit critical project milestones? Were your account execs forced to work long, difficult hours?

Sometimes, under the hood, a successful engagement proves to be quite the opposite.

Let’s say you have a $12,000 monthly retainer with a new client. You delivered the agreed-upon results, but your team worked 120 hours a month with an average billing rate of $150 an hour. That means you performed $18,000 of work, but only received $12,000.

In this scenario, does the retainer cover the costs of the employees performing the work? What is the average hourly rate — including healthcare, bonuses, retirement — that you are paying your employees? And let’s not forget about taxes. Yes, in this (completely hypothetical) scenario, you might have made a client happy, but you probably made your CFO cry.

Let’s look at this from another angle: If your employees did not spend additional time working on behalf of this client, would they have been able to bill time elsewhere? By working additional hours and over-servicing clients, your team is not only working for free, they are limiting their capacity to take on other, more profitable projects.

Increase Profitability by Reducing Over-Servicing

It can be easy to overlook the high price of over-servicing. For example, say you’re a well-run agency with 100 employees, and on average, each of your team members over-services roughly one hour per week. Just one hour! Is seems so innocuous …

But with an average billing rate of $200/hour, over the course of the year, you would have given away one million dollars in free work.

One million dollars.

That’s why even a small reduction in over-servicing can yield major benefits and save your agency hundreds of thousands of dollars a year.

And once you have a grasp on the cost of over-servicing, you can then make smarter decisions around whether or not you should strategically over-service an account. For example, some marquee clients may be worth a reduction in profitability, if it means keeping them as reference or providing much-need revenue to your organization. Other projects may require significant ramp-up time, resulting in temporary over-servicing. Without careful monitoring of employee hours, there is no way to ensure that over time, over-servicing is reduced and costs are returning to normal.

Additionally, having a real-time understanding of employee availability and project costs allows for earlier, more effective dialog with clients. You can help them understand what work is and is not out of scope, and facilitate more effective communications throughout the engagement.

Measuring Costs — Not Just Results

Just as your clients demand detailed metrics around campaign performance, you should have access to real-time project costs, employee capacity, employee availability, (including, of course, upcoming vacations and time off), and any other data to improve operations.

Again, your clients could be overjoyed with your service — the results could look incredible — but if you are losing money in the process, why are you doing the work?