25 essential KPIs for consulting success

Measuring the metrics of any consulting firm can be a challenging process, and with so many data points available, it can be difficult to determine which metrics will provide the highest return for your business.

But when our consulting experts looked at the KPIs that the top performing cohort of consulting firms are using to drive their success, we found 25 in common.

This year, we've also categorized some 'golden KPIs' - the focus on these translates well across high-performers in a wide range of firms and people.

Download the checklist here.

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The 5 golden KPIs

• Rule of 40 - Annual revenue growth % + EBITDA % must equal 40% (or more). i.e. Revenue growth of 10% + EBITDA of 30% = Rule of 40 achieved.
  
  • OK = 40. Good = 50. Great = 60.
• EBITDA - The strongest indicator of company value and financial health.
  
  • OK = 20%. Good = 30%,. Great = 50%+.
• Project margin - % profit on every engagement.
  
  • OK = 50%. Good =60%. Great = 80%.
• Billable utilization - % time employees spend on chargeable delivery(usually weekly).
  
  • OK = 60%. Good = 75%. Great = 90%.
• Pipeline value - Total value of all qualified pipeline opportunities(usually quarterly).
  
  • OK = 3 x Revenue target. Good = 4 x Revenue target. Great= 5 x Revenue target.

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Sales KPIs

• New business revenue - Revenue growth of new clients (annual).
  
  • OK =10%. Good = 25%. Great = 40%.
• Cross-sell revenue - % of total revenue from additional services from existing clients (annual).
  
  • OK = 30%. Good = 40%. Great = 50%.
• Extension revenue - % of total revenue from extending services with existing clients (annual).
  
  • OK = 50%. Good = 75%. Great = 100%.
• Growth rate - %revenue increase in total revenue (annual).
  
  • OK =10%. Good = 25%. Great = 40%.
• Retention rate - % of customers who renew, extend or cross-sold too i.e. are using at least one service YoY.
  
  • OK = 75%. Good = 90%. Great = 100%.

Marketing KPIs

• Av. Proposal value - Fairly obvious - but you may also want to split by offering or service line. Range is completely dependent on your niche. Most firms will try and increase this YoY.
• Pipeline volume - No. of deals you have at different stage gates (Good = you have stage gates! Great = Everyone follows stage gates fastidiously). Pipeline value is a golden KPI (see above) - but you will want to cross-reference with a "pipeline volume" KPI to ensure the number vs. shape of deals isn't dramatically changing. 
• Proposal-to-win rate
  
  • ‍OK = <30% or >70%. Good = <40% or >60%. Great = 50%.
• Proposal-to-close velocity - Sales cycle length from proposal submission to closed-won.
  
  • OK = 2 months. Good = 1 month. Great = 2 weeks.

Finance KPIs

• Recognized & forecast revenue - Measures past & forecast revenue performance vs target (booked, committed, pipeline, still to find).
  
  • OK = 10% variance. Good = 5% variance. Great = 2% variance.

• Overheads as % revenue - Measures your operating (non-project delivery) expenses as % of revenue.
  
  • OK = <5% or >25%. Good = <10% or >20%. Great = 15%.

• Day sales outstanding - Average number of days it takes to collect payment after a sale.
  
  • OK = 60 days. Good = 30 days. Great = 14 days. 

• Cashflow - Current Ratio - Ability to pay off current liabilities with its total current assets such as cash & accounts receivable.
  
  • OK = 1.5x. Good = 2x. Great = 3x.

Delivery KPIs

• Project recovery rate - Measures delivery performance(time/budget) of your live and completed projects.
  
  • OK = 80%. Good = 90%. Great = 95%. 

• NPS (Net Promoter Score) - Measures customer loyalty, satisfaction & enthusiasm for your services through potential to recommend to others.
  
  • OK =30. Good = 40. Great = 50.

Operations KPIs

• Productive utilization - Measures the % of time consultants are working on value adding activities such as chargeable projects, sales &marketing, IP + billable utilization target.
  
  • OK = 80%. Good = 90%. Great =100%.

• Average revenue per consultant - Measures the average revenue generated per chargeable consultant vs. Av fully loaded cost.
  
  • OK = 2.5x. Good = 4x. Great =6x.

• Time-to-hire (from interview to contract)
  
  • OK = 45 days. Good = 30 days. Great = 15 days.
• Consultant attrition rate - Measures the % consultants leaving the business over a defined period.
  
  • OK = <5% or >25%. Good = <10% or >20%. Great = 15%.

• eNPS Score - Employee engagement i.e. measures the level of involvement & enthusiasm of your people (full-time and contract).
  
  • OK = 30. Good = 40. Great = 50.

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