Client Profitability Analysis for Agencies

Client profitability analysis measures the profit a single client produces after the cost of the people who deliver their work. The calculation is straightforward: take the client's monthly revenue, subtract their delivery hours multiplied by your blended fully-loaded hourly cost, and divide the result by revenue. A client billing $18,000 a month who consumes 210 hours at a $85 loaded rate produces $150 of margin — a 0.8% return on $18,000 of revenue. Most agency owners can name their largest clients by revenue instantly. Far fewer can name their most profitable one, and the two lists are rarely in the same order.