Professional services businesses can thrive with the right measures in place to track success and support future planning. By focusing on the metrics that matter, you can better serve your clients, increase the productivity of your team, and sustainably grow.

Here are some metrics to keep your business on track.

1. Billable (and Non-Billable) Utilisation 

Whenever I help a services business, this is always the number one lever to pull.  Your team’s productive time is the most valuable asset you have. Tracking billable utilisation tells you how much of that time is going toward client projects. It’s calculated by dividing the hours worked on client tasks by the total hours available for each staff member. It is dependent on the type of services business, but ideally, aim for 85% or more to maintain a strong output without risking burnout. This may be lower if you are in a high value niche, or higher if you are providing a highly commoditised service. If you use sub-contractors, it should be 100%.

2. Revenue Realisation per Billable Employee

Revenue realisation per billable employee is a measure of how much income each billable team member generates. The ratio can vary based on a number of factors, but should be at least 2:1, assuming you need to generate an overall Gross Margin of more than 50%. With the evolving landscape of the services industry, this measure is at risk of becoming outdated, but I believe it is still a worthwhile analysis to perform.

3. Client Acquisition Cost (CAC)

Understanding how much it costs to acquire each new client is essential for sustainable growth. This can be a bit more challenging to measure, but you can benefit by tracking this figure over time, as it includes expenses from sales, marketing, and onboarding. Lowering CAC without compromising on client quality is key to strengthening your bottom line. This is a critical measure if you have to respond to a lot of tenders in your business.

4. Project Profitability

Evaluating each project’s profitability is critical and can guide better business decisions around what customers, and what projects, you choose to take. By comparing revenue from a project with associated costs (like time/labour, and resources), you can identify which projects are truly worthwhile. Including sales effort to win the project can be an interesting exercise as well. Perhaps the billable part of the project was profitable, but the tender and procurement costs have actually resulted in a net loss.

5. Client Retention Rate

Loyal clients make life so much easier. A client who will always pick up the phone and call you first is essential to a successful B2B services business. Tracking your retention rate highlights how well you’re building long-term relationships and delivering consistent value. Retaining clients means less need for constant new acquisition efforts. High retention also often signals strong client satisfaction.

6. Lead Generation

Even if you have a great set of loyal customers, if you want to grow, you will need to generate new business leads.  The lead funnel is an important measure that is often missing in consulting firms.  A number of business acquisition tactics are in play, but accurate tracking of lead volumes and conversion is commonly missing.

7. Net Promoter Score (NPS)

Net Promoter Score measures client satisfaction by asking clients how likely they are to recommend your services to others. This score is invaluable for spotting areas of improvement, refining goal setting and planning, and assessing how well clients feel supported. A high NPS means your clients are likely to spread the word, adding natural growth potential to your business.

There are, of course, many other measures within a successful professional services business.  These are seven of the ones that I think are important levers to control and grow.

If you want to talk about these, get in touch here.