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The 10 KPIs that will help procurement teams to measure Agency efficiency

by Sakthi Prasad , Content Manager

16 March 2017

In collaboration with Fince Philip and Devashish Bajaj, Lead Analysts -- Marketing Services

KPIs that will help procurement teams to measure Agency efficiency

The services rendered by marketing agencies play a critical role for a company, and measuring them is an important activity for both procurement as well as marketing teams. In general, there are two ways to measure marketing services: Campaign effectiveness and Agency efficiency.

Key performance indicators (KPIs) relating to campaign effectiveness is fairly clear and are quantifiable. However, the tricky part is setting the right KPIs to measure the overall performance of the services rendered by a marketing agency. In fact, this is an area where there could be potential friction among prominent players who are involved in marketing activities: procurement team, internal marketing stakeholders and external agency or service provider.

When procurement team is involved in sourcing marketing services (as opposed to business teams), it is better to frame KPIs to measure agency efficiency -- as this would fully fall under the purview of category managers.

Agency measurement is an evolving trend for achieving effective relationships between the agency and procurement teams. Measuring the efficiency of agencies will go a long way in cementing the partnership between sourcing managers and marketing department.

Here is the select list of 10 KPIs that can be used to measure Agency performance. Please note that this is not the full list.

No	Key Performance Indicators	Measurement/Description	Ownership
Cost
1	Number of revisions of Purchase Order	Buyer may have control on the number of versions of the Purchase order. Process: Versioning of Purchase Order	Buyer
2	Invoice Accuracy	Invoicing to include all items, support third party invoices in accordance with terms of MSA. Monitoring Process: Versioning of the Invoices	Buyer
Quality
3	Translation of strategies(company / brand) into Concepts proposed	Agency accurately interprets and translates facts, strategies and objectives in usable creative deliverables. Rate 1- 5. Annual Score can be the average rating of all the project score.	Buyer
4	Ability to work with client branding guidelines	Qualitative Measure. Rank 1- 5	Buyer
Service
5	Optimum staff in budget present onsite	Attendance of Key Personnel at the Event, Meetings etc. depending on category	Buyer
6	Prompt Communication	Acknowledgements/return of phone call/emails/distribution of contact reports and meeting reports. Qualitative Measure. Rank 1-5. This Ranking can be justified with case examples. Annual Score can be the average rating of all the project score	Buyer
7	Collaboration of Agencies	The Marketing Manager will decide qualitatively if the Agency has been co-operative with other agencies and worked together.	Buyer
Assurance of Supply
8	Agency Supplier management	The Agency should facilitate the buyer to acquire all Rights from sub-contractors. Annual measure will be in 100 % of the projects if the rights were obtained.	Buyer
9	Ratio of Actual Reviews and Planned Reviews	Agency demonstrates commitment to review process and is proactive in scheduling reviews	Agency
Regulatory
10	Compliance of regulations	Buyer oversees compliance	Buyer