Welcome to the world of packaging design. As a successful entrepreneur, you know that understanding the key performance indicators (KPIs) that measure the effectiveness of packaging design is essential for your business. In this blog post, we will explore the top seven KPIs that you need to track and calculate to ensure your packaging design agency is performing at its best.

Whether you are just starting or are a seasoned veteran of the industry, understanding these KPIs will give you valuable insights into what is working and what needs to be improved. Let's dive in and take a closer look at some of the top KPIs:

  • Client satisfaction level: Measuring how satisfied your clients are with your services is essential for maintaining positive relationships and generating repeat business.
  • Number of new clients acquired each quarter: Tracking the number of new clients you acquire each quarter is a good indication of the growth of your business and the effectiveness of your marketing efforts.
  • Revenue generated from project fees: This KPI measures the amount of money your agency earns from each project and can help you identify areas where you can increase profitability.

These KPIs are just the tip of the iceberg. To find out more about the top KPIs in packaging design, scroll down and read the full blog post. Discover how to track and calculate your agency's KPIs to help your business reach its full potential.



Client satisfaction level

Definition

Client satisfaction level is a KPI metric that measures how satisfied clients are with the service provided by a packaging design agency. The satisfaction level of clients can indicate how well the agency is performing and the overall quality of the service that the agency offers to clients.

Use Case

Client satisfaction level is a critical KPI for packaging design agencies to track because it helps evaluate the agency's performance and how well they meet the clients' requirements. High client satisfaction level indicates that the agency is meeting the clients' expectations and needs, is delivering quality work and helps in retaining them.

How To Calculate KPI

To calculate the client satisfaction level, the agency can use the following formula:

Client Satisfaction Level = (Number of satisfied clients / Total Number of clients) *100%

Calculation Example

Suppose a packaging design agency has 50 clients and out of which 40 clients reported to be satisfied with their services, the client satisfaction level would be:

Client Satisfaction Level = (40/50) *100% = 80%

KPI Advantages

  • Helps identify the strengths and weaknesses of the agency
  • Provides insight into clients' needs and expectations
  • Good client satisfaction level can help attract new clients, improves retention and maintain a competitive advantage

KPI Disadvantages

  • It is subjective and can vary among clients
  • Unsatisfied clients may not provide feedback or may provide biased reviews
  • The data may not be reliable if only a small number of clients are surveyed or if surveys are not regularly conducted

KPI Industry Benchmarks

As per industry benchmarks, a client satisfaction level of 80% or higher is considered good performance for packaging design agencies.

Tips & Tricks:

  • Regularly conduct surveys to collect feedback from clients
  • Provide prompt responses to inquiries and feedback to improve satisfaction levels
  • Identify and address the areas of improvement indicated by the feedback to maintain long-term client relationships


Excel financial model

Packaging Financial Model

  • 5-Year Excel Financial Projection
  • 40+ Charts & Metrics
  • DCF & Multiple Valuation
  • Free Email Support



Number of new clients acquired each quarter

Definition

The number of new clients acquired each quarter is a KPI metric that measures the success of a packaging design agency in attracting new customers.

Use Case

This KPI metric is crucial for tracking the agency's growth and assessing its ability to attract new customers. It also helps identify if the agency's marketing and sales efforts are effective or need improvement.

How To Calculate KPI

To calculate the number of new clients acquired each quarter KPI metric, use the following formula:
New Clients Acquired = Number of New Customers - Number of Lost Customers

Calculation Example

Let's assume that your packaging design agency acquired 25 new clients in the first quarter of the year and lost 5 clients. The calculation for the number of new clients acquired would be as follows:
New Clients Acquired = 25 - 5 = 20
Therefore, your agency acquired 20 new clients in the first quarter.

KPI Advantages

  • Measures the growth and success of the agency.
  • Helps identify the effectiveness of sales and marketing efforts.
  • Provides insights on customer acquisitions and losses.

KPI Disadvantages

  • Does not provide insights into customer satisfaction and return rates.
  • May not be useful for agencies that have a longer sales cycle.
  • Can be affected by factors outside the agency's control, such as market trends and economic conditions.

KPI Industry Benchmarks

The average number of new clients acquired each quarter varies by industry and business size. However, the following benchmarks can provide some guidance:
  • Small businesses: 10 - 15 new clients per quarter
  • Medium-sized businesses: 20 - 25 new clients per quarter
  • Large businesses: 30 or more new clients per quarter

Tips and Tricks

  • Focus on quality over quantity when acquiring new clients.
  • Track customer satisfaction and retention rates alongside this KPI metric.
  • Be aware of external factors that can impact customer acquisition, such as industry trends and economic conditions.


Revenue generated from project fees

Definition

'Revenue generated from project fees' is a crucial KPI metric used to measure the success of packaging design agencies. It refers to the total amount of revenue generated from the project fee charged to clients on completed projects.

Use Case

This KPI metric is essential for packaging design agencies to measure their financial performance. It helps in analyzing project profitability and tracking revenue generation from project fees. This KPI metric is useful in identifying the agency's strengths and weaknesses to improve its overall performance.

How To Calculate KPI

To calculate 'Revenue generated from project fees,' use the following formula:

(Total project fee received / Total number of projects completed)

Calculation Example

Suppose an agency has completed ten packaging design projects, and their total project fee received is $100,000. To calculate their 'Revenue generated from project fees' KPI, use the formula:

($100,000 / 10) = $10,000

The revenue generated from project fees for the agency is $10,000.

KPI Advantages

  • Helps in tracking financial performance.
  • Helps in analyzing project profitability.
  • Useful for identifying agency's strengths and weaknesses.
  • Helps in making informed business decisions.

KPI Disadvantages

  • Does not consider other sources of revenue apart from project fees.
  • Does not consider potential revenue lost due to project cancellations or delays.
  • May not give an accurate representation of the agency's overall financial health.

KPI Industry Benchmarks

According to industry benchmarks, an average packaging design agency should generate a minimum revenue of $5,000 from each completed project.

Tips & Tricks

  • Provide discounts to clients for long-term service agreements.
  • Reduce overhead costs to increase profitability.
  • Develop a project delay/cancellation policy to mitigate potential revenue loss.


Percentage increase in packaging sales for clients

Definition

This KPI measures the percentage increase in revenue generated from the sale of products in redesigned packaging for clients.

Use Case

Tracking the percentage increase in packaging sales for clients is crucial for packaging design agencies. Having reliable data on the effectiveness of packaging design helps these agencies demonstrate the ROI of their services to potential clients and inform their strategy for future projects.

How To Calculate KPI

To calculate the percentage increase in packaging sales for clients, use the following formula:

(Sales revenue with new packaging – Sales revenue with old packaging) ÷ Sales revenue with old packaging x 100% = Percentage increase in packaging sales for clients

Calculation Example

Let's say a client's sales revenue for a product increased from $100,000 to $120,000 after implementing new packaging design. The percentage increase in packaging sales for the client would be:

($120,000 - $100,000) ÷ $100,000 x 100% = 20%

KPI Advantages

  • Provides a measurable and tangible way to demonstrate the effectiveness of packaging design to clients
  • Offers valuable insights to packaging design agencies for future projects and strategy development
  • Allows for benchmarking performance against industry standards and competitors

KPI Disadvantages

  • Does not account for external factors that may influence sales revenue such as changes in target demographics or competitor activities
  • May not accurately reflect the overall impact of packaging design on a client's product sales
  • May not be applicable for clients whose products leverages multiple channels for sales instead of utilizing a single channel.

KPI Industry Benchmarks

There are no standard industry benchmark figures for the percentage increase in packaging sales for clients since the effectiveness of packaging design will vary depending on factors such as client industry, product type, market trends, and competition.

Tips & Tricks

  • Ensure to establish a solid client-communication plan or a feedback mechanism to assess customer response on the new packaging design.
  • Compare KPI benchmarks for similar products from antiquated packaging worn to examine if the increase in sales is the result of new packaging or of a surge in the market.
  • To refine the assessment, capture insights from client satisfaction or customer-loyalty surveys since it greatly influences future sales and indicates long-term success.


Number of Referrals Received from Satisfied Clients

Definition

The number of referrals received from satisfied clients is a KPI metric that measures the number of new clients a packaging design agency acquires through referrals.

Use Case

Referral marketing is one of the most effective ways to grow a packaging design agency. Happy clients are more likely to recommend the agency to others, and this KPI measures just how successful the agency is at leveraging client satisfaction to drive new business.

How To Calculate KPI

To calculate the number of referrals received from satisfied clients, use the following formula:

Number of Referrals = Total Number of New Clients - Number of New Clients from Other Sources

For example, suppose the agency acquires 10 clients in a quarter, and two of them are from sources other than client referrals. In that case, the number of referrals received from satisfied clients would be eight.

Calculation Example

Suppose a packaging design agency acquires 40 new clients in a year, of which 30 are from client referrals. The number of referrals received from satisfied clients would be:

Number of Referrals = 40 - 10 = 30

KPI Advantages

  • Provides insight into how satisfied clients are with the agency's services
  • Reflects the effectiveness of referral marketing strategies
  • Can help identify areas of improvement in service quality

KPI Disadvantages

  • May be influenced by external factors, such as market conditions or competition
  • Relies on clients to refer new business, and some clients may not be inclined to do so
  • May not provide a complete picture of the agency's overall performance

KPI Industry Benchmarks

Industry benchmarks for this KPI are difficult to establish, as they can vary widely by market and agency size. However, a good rule of thumb is that a healthy packaging design agency should aim for at least 50% of new business to come from client referrals.

Tips and Tricks

  • Ensure your agency is providing high-quality services to encourage clients to refer new business.
  • Offer incentives, such as discounts or rewards, for clients who refer new business.
  • Make it easy for clients to refer new business, by providing referral links or other tools.


Employee retention rate

Definition

Employee retention rate is a metric used to measure how well a company is retaining its employees. It indicates the percentage of employees who stay with the company over a defined period.

Use Case

Employee retention rate is an important KPI for packaging design agencies that want to maintain a stable workforce and keep the best talent. Low retention rates can result in high employee turnover costs and impact the quality of work delivered to clients.

How To Calculate KPI

Employee retention rate = (E-N)/S x 100%

  • E represents the number of employees at the end of the period
  • N represents the number of new hires during the period
  • S represents the number of employees at the start of the period

Calculation Example

Let's assume your packaging design agency had a total of 100 employees at the beginning of the year (S), and during the year, you hired 20 new employees (N). At the end of the year, you had 90 employees (E). Your employee retention rate for the year would be:

  • Employee retention rate = (90-20)/100 x 100% = 70%

KPI Advantages

  • Helps identify problems with the work environment or company culture that could be contributing to high employee turnover rates.
  • Can help identify the most effective retention strategies by measuring the impact of various programs on employee retention rates over time.

KPI Disadvantages

  • Can be influenced by external factors such as the state of the economy or industry trends, potentially providing an incomplete picture of underlying issues.
  • May not provide insight into the reasons why employees are leaving.

KPI Industry Benchmarks

The average employee retention rate for packaging design agencies falls between 70% and 80%.

Tips & Tricks

  • Monitor employee satisfaction levels regularly to identify early signs of potential retention issues. Consider using anonymous surveys for more honest feedback.
  • Develop employee retention strategies that align with your company's goals and culture. Examples include providing career development opportunities or implementing a recognition and reward program.
  • Examine your compensation and benefits packages to ensure they are competitive with industry standards. Good pay and benefits can be powerful motivators for employees to stay with a company.


Average time for completion of design projects

Definition

The average time for completion of design projects is a KPI metric used by packaging design agencies to measure their efficiency in completing projects. This metric helps agencies to evaluate their performance, identify areas of improvement, and make necessary adjustments to their processes.

Use Case

Average time for completion of design projects is particularly important for packaging design agencies that work on multiple projects at the same time. By monitoring the average time taken to complete a project, agencies can assess their capacity to handle a workload, set realistic deadlines, and ensure timely delivery of projects. This KPI also helps agencies to identify factors that may cause delays and take proactive measures to mitigate them.

How to Calculate KPI

To calculate the average time for completion of design projects, take the sum of time taken to complete all design projects and divide it by the total number of projects completed during a specific period.

Formula:

Average time for completion of design projects = Total time taken to complete projects / Total number of projects completed

Calculation Example

Let's say a packaging design agency has completed 10 projects in a month, and it has taken a total of 300 hours to complete them. To calculate the average time for completion of design projects, use the following formula:

Example:

Average time for completion of design projects = 300 hours / 10 projects = 30 hours per project

KPI Advantages

  • The average time for completion of design projects helps agencies to evaluate their performance and identify areas of improvement
  • It helps to set realistic deadlines and ensure timely delivery of projects
  • By monitoring this KPI, agencies can identify factors that cause delays and take corrective actions to mitigate them

KPI Disadvantages

  • Some projects may require more time than others, and averaging the time taken may not provide a realistic picture of the agency's performance
  • The KPI does not take into account the complexity or size of the project, which can lead to inaccurate evaluations of the agency's performance

KPI Industry Benchmarks

The average time for completion of design projects can vary depending on the size and complexity of the project and the industry in which the agency operates. However, according to industry benchmarks, a packaging design agency should aim to complete a project within 4-6 weeks.

Tips and Tricks

  • Break down projects into smaller tasks and set deadlines for each task to ensure timely completion of projects
  • Regularly communicate with clients to understand their requirements and address any concerns or issues to avoid delays
  • Invest in project management software to help track the progress of projects and ensure timely delivery


In conclusion, as a packaging design agency, it is important to keep track of key performance indicators (KPIs) to measure the effectiveness and success of your business. The KPIs highlighted in this blog post are just a few of many that must be tracked, including measuring client satisfaction levels, the number of new clients acquired each quarter, and revenue generated from project fees. By consistently monitoring and analyzing these KPIs, your agency can pinpoint areas for growth and improvement. Thus, it's crucial to understand and implement these KPIs to ensure your agency is performing at its best and to help your business reach its full potential.

Excel financial model

Packaging Financial Model
  • 5-Year Financial Projection
  • 40+ Charts & Metrics
  • DCF & Multiple Valuation
  • Free Email Support