There are many opinions on critical KPIs for professional firms, but we are seeing "smart growth KPIs" becoming more prevalent. There are many traditional revenue & financial measures, but killer KPIs for the modern advisory firm include a much more multi-faceted view.
Start with the Basics
- Define Advisory Fees - Categorise them separately from core compliance fees
- Where possible track the catagories of advisory fees (i.e Forecasting, Quarterly reporting, Business Planning etc - these should reflect your Service Opportunity Matrix)
- Capture Monthly Recurring Revenue & Non-Recurring Revenue for each category
- Set Budget (expectation) & Target (aspiration) numbers for each category
Engagement KPIs
- Net Promotor Score - (NPS). NPS is a somewhat brutal model (advocates minus detractors), but it does remind us to keep our eye on the customer and their perceptions. The key with NPS is follow-up!
- Community Engagement - Your community includes your clients, as well as your prospects, and strategic partners.
- Newsletters - what are your click through / download rates - what is resonnating with your audience, what do you want your audience to be consuming
- Webinar & Event Registrations & attendance - again did the attendees become clients, did the clients increase there services, has ARPC grown.
- Website, Blog & Campaign engagement
- Ultimately you want to ensure all of your activity and investment engages new "ideal" prospects, converts prospects to clients and upsells existing clients leading to more satisfied customers, retained over an extended lifetime, and new revenue are secured.
Revenue KPIs
- ARPC (Average Revenue Per client) -this is a great indicator of your relationship depth, and expansion and upsell opportunities
- Value-Add Service Mix - This percentage measure of Advisory vs. Compliance is mission critical when you access accepting the right clients with the right services for your firm.
Team KPIs
- Human contact - how many meetings / phone calls / client interactions should the team undertake. This should always include Face to Face meetings (often at the client site), as well as phone calls.
- Revenue per Employee - focus on the output, not the input (timesheets).
- There are many more including Life time valye (LTV), or Monthly Committed Revenue, which are generally far more useful that historical utilisation rates and ensuring every hour is recoverable.
Tim Munro of Change Accountants is passionate about his team having "face time"
We need to get back to face-time....and be human. Technology is a great enabler, but the human connections are what really drive our business.
See the Smart KPIs checklist below.
