Project Management

Successful Agency Management: Key Strategies

Mindaugas Gluchovskis ·

2019 - Present Marketing specialist Innovative content marketeer with MSc in International Communication, Mindaugas brings fresh ideas and inspiration about project management and beyond.

agency management

If you’re an agency that wants to deliver exceptional services, maintain financial health, and achieve continuous growth, agency management is non-negotiable.

This guide is your roadmap to understanding agency management. I’m going to share with you the most common challenges, the best practices for improving agency management, and the most critical KPIs you should measure. 

Plus, there’s a whole section that will discuss all the necessary tools you need to manage a successful agency. 

Let’s dive in!

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What is agency management?

Agency management is about organizing, guiding, and bringing together an agency’s resources to meet its goals. It includes key tasks like

  • Managing teams
  • Planning for the agency’s future
  • Keeping the business strong and growing

When done right, it helps an agency deliver great services to its clients, stay financially healthy, and achieve lasting success and growth.

What does an agency do?

An agency’s main job is to offer services to other companies, no matter what kind of industry it’s in. This could be a full-service agency that does a bit of everything or one that focuses on a specific area. 

The scope of these services can vary depending on the agency’s focus and expertise. Some common services agencies provide are marketing and advertising, public relations, creative services, software development, consulting services, and more.

What agency management consists of

Agency management is all about keeping an agency running smoothly and successfully. Here’s how you make it happen:

  • Strategic planning: Focus on the future. Define clear, ambitious goals and map out the steps to achieve them.
  • Client relationship management: Keep your clients close. Build and maintain strong connections to ensure their satisfaction, happiness, and loyalty.
  • Project planning and execution: Turn plans into action. Organize and complete projects that exceed client expectations on time, every time.
  • Resource and workflow management: Use what you have wisely. Streamline your processes so that every resource is used to its fullest potential.
  • Financial management: Watch the finances. Budget wisely, monitor spending, and plan for financial growth to keep your agency robust.
  • Risk management and compliance: Stay sharp and compliant. Anticipate challenges and ensure all operations are above board to keep your agency on the right track.

To make these concepts easier to understand, let’s give some examples of agency management. 

Agency management examples

In the previous section, I mentioned that client relationship management is one of the key aspects of agency management.

In practice, client relationship management would involve using CRM software that helps an agency track all client interactions, from emails to meetings. By doing so, this agency can stay on top of client needs and quickly respond to any issues. 

Or, let’s consider project planning as another critical component of agency management. This might involve using agency project management software that clearly outlines each campaign’s tasks, deadlines, and team members. The agency can then manage client expectations effectively and ensure that nothing falls through the cracks. 

What are the common challenges of agency project management?

Agency project management often involves navigating complex tasks, client expectations, and deadlines. One common challenge is scope creep, which happens when a project’s scope expands beyond initial boundaries without adjustments to time, resources, or budget. Eventually, it can lead to missed deadlines, overworked teams, and frustrated clients.

Learn how to overcome Scope Creep in the following post.

Another challenge is effectively managing and allocating resources, including team members with specific skill sets. Improper resource management often leads to resource shortages or mismatches.

Then there’s the challenge of juggling multiple projects simultaneously, each with its own set of deadlines. Coordinating these timelines, especially when unexpected delays occur, is tricky but crucial for the success of the projects. 

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Handling multiple agency projects

It’s also not uncommon for agencies to struggle with budget management. Unexpected costs can arise, and managing these without exceeding the budget or cutting corners requires careful financial planning and management.

Another challenge that deserves mentioning is maintaining clear and constant communication with clients. You’ll need to manage their expectations and make sure they’re satisfied without compromising the quality of the project or the team’s well-being. This can be a delicate balance to strike. 

Effective project management practices

Companies that use project management practices have a 92% success rate in meeting project objectives. Despite the fact that mature project management increases the chances of a company delivering its projects on time and under budget, only 46% of companies make project management a priority. 

With this in mind, we can safely determine that adopting strong project management is critical for an agency’s success. 

Setting clear objectives and Key Results (OKRs)

OKRs are an effective methodology for optimizing agency performance and staying agile and competitive. Typically set for a fixed period, like a quarter or a year, OKRs have two main components:

  • Objectives: These are the qualitative goals you want to achieve that are aligned with your team or organization’s overall aims.
  • Key results: These are the quantitative metrics that show how you’ll reach your objectives. They need to be specific, measurable, achievable, relevant, and time-bound.

Companies like Google advise setting 3-5 key results for each objective to maintain focus and clarity. What’s more, when creating OKRs, make sure you use numbers to make goals clearer and more attainable. OKRs should be developed collaboratively, not dictated from the top down.

Involving your team in the OKR-setting process guarantees everyone is committed to the agreed-upon goals and understands how progress will be measured.

Tracking where the time went

Around 43% of hourly workers admit to time theft, and companies face losses of $50,000 per employee due to untracked time spent on activities like replying to client emails.

Tracking your team members’ time will help you identify those who are overstretched and at risk of burnout. You’ll also identify who can take on more work so that you can allocate resources more effectively. 

Time tracking offers transparency and shows clients what exactly they’re being billed for. You’ll be able to calculate billable hours and payroll accurately, which promotes clarity and fairness in the workplace. 

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Agency time tracking

Boosting team collaboration 

Boosting team collaboration is an important best practice that, if implemented well, can improve productivity and innovation within any agency.

To boost team collaboration, you need to introduce easy-to-use project management tools that offer access to accurate data, enable sharing and use of decentralized data, and make sure teams work from the same information sets.

Another point to consider is meeting overload. Research from Harvard Business Review shows that 70% of all meetings keep employees from doing productive work. To make employees feel more empowered and autonomous, you need to reduce the number of meetings they attend. Thus reducing or eliminating meeting fatigue altogether.

Another thing you may need to consider is to break down any silos that exist in your agency. As 80% of survey respondents indicate that teams within their companies operate in silos, breaking down these barriers can be crucial for boosting team collaboration. You must encourage open communication and cross-departmental projects to dismantle siloes. 

Bonus tip: Improving team collaboration has its perks, and the same applies to client-agency collaboration. Bring clients directly into your agency management tool for collaboration. Add your clients to the projects you’re handling on their behalf to allow them to track your progress in real time.

Streamlining workflow

Another effective strategy for improving agency management is streamlining workflows. One way to do this is to automate the processes that can be automated at your agency. 

Many modern software tools can suggest workflow optimizations and pinpoint steps that could be automated or removed, particularly those that are repetitive or don’t necessarily require human intervention.

These include manual data entry tasks, sending out bulk emails, segmenting email lists, scheduling and posting content across multiple social media channels, assigning tasks to team members, and more. 

Prioritization is another great strategy for streamlining workflows. It ensures that the most critical tasks are addressed first so that processes can flow freely. 

Additionally, standardizing processes across the agency promotes consistency and ease of understanding for all team members and can further improve efficiency.

Resource allocation and budgeting

The significance of proper project resource management and budgeting can’t be ignored. It can lead to more efficient use of time and materials, reduced costs, and, ultimately, higher project success rates.

What can your agency do?

Here are some some best practices:

  • Prioritize projects and tasks based on urgency and importance.
  • Use resource optimization tools for a clear view of everyone’s tasks and timelines.
  • Adopt flexible scheduling to accommodate changes in priorities or unexpected shifts to avoid project delays.
  • Maintain open communication between managers and teams to ensure clarity on responsibilities.
  • Monitor team workloads to avoid overworking and burnout.
  • Promote interdepartmental collaboration to improve efficiency and introduce new perspectives to projects.

Objectives and Key Performance Indicators (KPIs) for tracking performance

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KPIs for Tracking Performance

With the agency project management best practices out of the way, it’s time to explore some important KPIs you should track at all times to make sure the agency grows in a healthy and sustainable manner.

Although which KPIs you’re going to track depends on your specific goals, industry, and client needs, there are several KPIs that are universally vital for assessing an agency’s performance, growth, and client satisfaction: 

  • Client Satisfaction Score (CSAT): CTAS measures customer satisfaction with a product or service based on a short survey.
  • Net Promoter Score (NPS): NPS is used for calculating the ratio of customers who are promoters versus detractors of a brand.
  • Employee Retention Rate: Employee retention rate measures the percentage of employees who remain in a company over a specific period.
  • Revenue Growth Rate: This KPI tracks the increase in a company’s sales over a given time period.
  • Profit Margin: Profit margin is used for calculating the percentage of revenue that exceeds the costs of producing goods or services.
  • Utilization Rate: This KPI measures the proportion of billable hours to total available hours.
  • Billable vs Non-Billable Hours: This KPI differentiates hours charged to clients from those not charged.
  • Project Delivery Timeliness: It evaluates how closely project timelines are followed.
  • Lead Conversion Rate: It shows the percentage of leads that turn into clients or customers.
  • Customer Lifetime Value (CLV): CLV estimates the total revenue a business can expect from a single customer account throughout their relationship with the company.

Agency management solutions: Necessary tools to manage an agency

Every agency needs a comprehensive toolkit to manage various aspects of its operations, from project execution to client management and financial oversight. Consider using one or a combination of the following tools:

  • Project Management Software: Agency project management software helps in planning, tracking, and executing projects. They can also facilitate team collaboration and deadline management. Teamhood is an example of a capable project management software that meets these needs. It allows for quick setup, project visualization, and customization to suit specific workflows. Offering a range of features from collaboration tools to task and time management, Teamhood makes sure your projects stay on course and your team remains coordinated.
  • CRM (Customer Relationship Management) Software: CRM platforms such as Salesforce and HubSpot CRM track interactions with clients and prospects. They can help your agency agencies manage sales pipelines and maintain strong client relationships.
  • Time Tracking and Billing Software: Applications like Harvest and Toggl help you track billable hours and manage invoicing, so that you can be sure you’re billing your clients accurately and paying your employees properly. 
  • Communication and Collaboration Tools: Software like Slack and Microsoft Teams enable seamless communication within your team and with clients, and support file sharing and real-time discussions.
  • Financial Management Tools: Tools like QuickBooks and FreshBooks offer solutions for accounting, budgeting, and financial reporting. They’re important for keeping your agency’s finances in check.
  • Marketing Automation Tools: Tools like Mailchimp and Marketo automate marketing campaigns, and allow you to scale your marketing efforts.

Wrapping up

Mastering agency management is about creating a seamless cycle of planning, executing, and evaluating your efforts with a focus that always circles back to client satisfaction.

This client-centered approach should guide your every strategy, decision, and action toward delivering value that exceeds expectations. It’s this dedication to excellence and understanding of client needs that sets the foundation for thriving and getting ahead of the competition.

As you move forward, let this focus on client satisfaction be the driving force behind your efforts. Remember, success in the agency world is about the relationships you build, the trust you earn, and the growth you facilitate, both for your clients and your agency. With this mindset, you’re well-equipped to navigate the challenges and opportunities that come your way.

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