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KPIs in an agency contract: which metrics to agree on
"Will there be results?" is the most common question in a first meeting with an agency. But everyone means something different by "results": one means followers, another leads, a third sales. That's exactly where disagreements start. KPIs — metrics agreed in advance and measured in numbers — solve this. This article covers which KPIs to agree with an agency, how to set them properly and what to put in the contract.
What a KPI is and why you need one
A KPI (key performance indicator) is the main measure of whether work is succeeding. With an agency it does three jobs:
- aligns expectations — both sides know what a "good result" is;
- makes oversight easy — numbers can be compared every month;
- speeds up decisions — you see at once which channel or creative isn't working.
The three layers of KPIs
Not all metrics are equal. It's important to separate them by who controls them:
| Layer | Examples | Who controls it |
|---|---|---|
| Work metrics | Number of creatives, number of tests, report date, content plan delivery | The agency |
| Marketing metrics | Number of leads, cost per lead (CPL), CTR, lead quality | Mostly the agency |
| Business metrics | Sales, cost per sale, ROMI, revenue | Agency and business together |
Sales depend not only on marketing but also on the sales team, price and product. So a KPI based solely on sales — if the agency can't influence the sales process — can be unfair. The best approach is to track all three layers.
No point A, no KPI
Before setting KPIs, write down your current numbers:
- leads per month;
- cost per lead;
- lead-to-sale conversion;
- average order value;
- monthly ad budget.
If you don't have these numbers, month one's job is to start measuring them. What to put in a brief — how to fill in a marketing brief.
How to set KPIs properly
A good KPI is:
- A number — not "more leads" but "150 leads a month" (illustrative example).
- Time-bound — for which month or quarter.
- Realistic — based on point A, budget and the market.
- Measurable — tracking is in place: pixel, UTMs, CRM — UTM tags.
- Within reach — the agency can genuinely influence it.
Illustrative example: a KPI table
| Metric | Point A | Month-3 target | Source |
|---|---|---|---|
| Leads per month | 80 | 150 | CRM |
| Cost per lead | 60,000 so‘m | 45,000 so‘m | Ad account |
| Lead to sale | 10% | 15% | CRM |
| New creatives per month | 2 | 8 | Report |
| Report date | — | 5th of every month | Contract |
These numbers are only a template: real targets are set from your point A and budget.
Metrics that shouldn't be KPIs
- Follower count alone. Followers can be bought or be the wrong audience.
- Reach and views alone. They matter but don't show sales by themselves.
- Likes. A brand signal, not a business result.
- Metrics the agency can't affect — for example, conversion to sale if the sales team doesn't answer leads.
These can appear in the report, just not as the main KPIs.
What to put in the contract
- The ad account, page and pixel in your name, with the agency as a partner.
- Report date and format: spend, leads, cost per lead, sales, next steps — what an ad report should include.
- Scope of work: how many videos, posts, creatives and tests per month.
- Response times: how quickly questions and change requests are answered.
- The business's obligations: content approval times, answering leads, sharing sales data.
- KPI review: every quarter.
KPIs for the business side
The agency's results also depend on your work. So set metrics for yourself too:
- time to first reply on a lead — lead response time;
- share of leads that got a follow-up;
- content approval time;
- sales and reasons for lost deals logged in the CRM.
How to track KPIs
- Weekly: spend, leads, cost per lead — a short message.
- Monthly: a full report, comparison with point A, next month's plan.
- Quarterly: KPI review, ROMI — how to calculate ROMI.
Common mistakes
- Setting KPIs without writing down point A.
- Watching only one metric, such as cost per lead — leads get cheap but poor.
- Demanding final KPIs in month one — the algorithm and tests need time.
- Ignoring problems on the business side.
- Never reviewing KPIs.
Questions and answers
Should an agency guarantee sales?
Sales depend on marketing, the sales team, price and product. An honest agency answers for metrics within its control and tracks sales together with you. Be wary of "100% sales guaranteed" promises.
Can cost per lead be the only KPI?
No. Cheap leads can be poor quality. Track cost per lead together with quality and conversion to sale.
When should KPIs change?
Every quarter, or when something big changes in the business: a new product, a price change, a new branch.
What if a KPI is missed?
Find the cause: marketing, sales or external factors. Then agree a concrete correction plan for the next month.
Conclusion
KPIs with an agency are a tool to align expectations and keep control of results. Track three layers — work, marketing and business metrics; write down point A, set realistic targets, and put reporting, scope and account ownership in the contract. Level Marketing starts from point A, presents the report in your office every month, and our specialists' bonuses depend on you continuing to work with us.
