The Difference Between OKRs vs. KPIs for Marketing Agencies

You pour your heart and soul into creating campaigns that dazzle and deliver for your marketing agency clients. But with all the work, deadlines, and changing plans, it’s easy to get lost in the numbers and forget what really matters.

Many agencies struggle to connect their work to meaningful results, leading to doubts about their impact and value. But there’s a way to cut through the noise and steer your agency towards success with laser-like precision. The key lies in understanding and mastering two powerful frameworks – OKRs (Objectives and Key Results) and KPIs (Key Performance Indicators).

These tools will help you clarify your goals, track progress effectively, and demonstrate your agency’s value to clients.

What Is a KPI (Key Performance Indicators)?

KPIs are quantifiable metrics that help you gauge your agency’s performance in specific areas. They act as vital signs for your business, covering essential aspects like website traffic, lead generation, conversion rates, and client retention.

To make sure your KPIs are effective, they need to be SMART:

• Specific: Laser-focused and clearly defined
• Measurable: Quantifiable and easy to track progress
• Achievable: Realistic and within your reach
• Relevant: Aligned with your agency’s goals and client needs
• Time-bound: Having a clear deadline to keep you accountable

What’s an example of a KPI?

Let’s say one of your agency’s goals is to increase revenue from retainer clients.

A SMART KPI for this goal might be: “Increase average retainer client revenue by 20% within the next 6 months.”

This KPI is specific (retainer client revenue), measurable (20% increase), achievable (based on past performance and current resources), relevant (aligned with your agency’s financial goals), and time-bound (6-month deadline).

Get those KPIs right, and you’ll have a powerful tool to measure your agency’s success. You’ll see what needs fixing and be able to make smart decisions to get results. Forget the guesswork, get clear steps to win.

Here are a few more examples of common KPIs that marketing agencies might track:

Here are a few more examples of KPIs that marketing agencies might track, broken down by function:

What is an OKR (Objectives and Key Results)?

Now, let’s shift gears and talk about OKRs. If KPIs are your compass, OKRs are your roadmap.

OKRs are a goal-setting framework that helps you reach ambitious targets and push your agency to new heights.

At its core, an OKR consists of two elements:

1. Objective – The bold destination you want to reach
2. Key Results – The milestones that mark your progress

The Objective is a bold, aspirational goal that rallies your team around a common purpose. It should be challenging yet achievable, and aligned with your agency’s overarching mission.

Key Results, on the other hand, are the measurable milestones that mark your progress towards the Objective. They should be specific, time-bound, and directly contribute to the success of the Objective.

What’s an example of an OKR?

Let’s put this into context. Suppose your agency wants to become a go-to source for insights in the field. Your OKR might look like this:

Here’s another example:

This OKR is focused on improving the client experience and reducing the time it takes for clients to see value from the agency’s services. The Key Results support that goal through reduced onboarding time, increased client satisfaction, and the development of self-service resources.

See how the Objective is bold and ambitious, while the Key Results are specific and measurable? Break down the Objective into concrete, actionable steps and you create a clear roadmap for your team to follow.

But the real beauty of OKRs lies in more than just meeting targets. They’re all about pushing your agency to be more innovative and grow. Don’t be afraid to set big goals and let your team get creative. It’ll lead to some awesome new ideas and changes.

Of course, setting effective OKRs is easier said than done. It requires a deep understanding of your agency’s strengths, weaknesses, and opportunities, as well as a willingness to take calculated risks. But when done right, OKRs can be the catalyst that propels your agency to new heights of success.

OKRs vs KPIs – Similarities and Differences

Now that we’ve defined OKRs and KPIs, let’s dive deeper into how they compare and contrast. While both frameworks are essential tools for driving agency success, they serve distinct purposes and work in different ways.

Think of OKRs and KPIs as two sides of the same coin—complementary but not interchangeable. KPIs are your rearview mirror, showing you where you’ve been and how well you’ve performed. They help you monitor the vital signs of your agency and ensure you’re on track to meet your goals.

OKRs, on the other hand, are your telescope, focused on the future and the ambitious destinations you want to reach. They’re the catalyst for pushing your agency beyond its current limitations and achieving extraordinary results.

Let’s break down the key differences:

As you can see, OKRs and KPIs serve different but equally important roles in your agency’s success. KPIs help you stay on course and identify areas for improvement, while OKRs push you to dream bigger and achieve more than you ever thought possible.

The Benefits of Setting OKRs

So, you’re probably thinking… “OKRs sound great in theory, but what’s the real payoff? Is it worth the effort to implement them in my agency?”

Absolutely. Done well, OKRs can make your agency explode with growth, get everyone focused, and make sure everyone’s pulling in the same direction.

Here are just a few of the key benefits:

1. Laser-focused alignment – OKRs ensure everyone in your agency is rowing in the same direction, working towards a shared vision of success. No more siloed teams or competing priorities—just a unified force focused on what matters most.
2. Unparalleled transparency – With clear objectives and measurable key results, everyone knows what’s expected of them and how their work contributes to the bigger picture. This transparency fosters a culture of accountability and ownership, where every team member feels invested in the agency’s success.
3. Accelerated growth – OKRs push your agency to aim high and think big. Set ambitious goals and challenge your team to stretch beyond their comfort zone – you’ll create an environment where innovation thrives and breakthroughs happen.
4. Improved decision-making – OKRs provide a clear framework for prioritizing initiatives and allocating resources. When faced with tough choices, you can always ask: “Which option best aligns with our OKRs?” This clarity helps you make faster, more confident decisions that drive your agency forward.
5. Enhanced team engagement – When everyone understands the agency’s goals and their role in achieving them, they’re more motivated and invested in their work. OKRs give your team a sense of purpose and a shared mission, fostering a culture of collaboration and engagement.

Of course, realizing these benefits requires more than just setting OKRs and forgetting about them. It takes ongoing communication, regular check-ins, and a willingness to adapt as circumstances change. But when you commit to the process and put in the work, the payoff can be truly transformative.

The Benefits of Setting KPIs

While OKRs are the North Star guiding your agency towards ambitious goals, KPIs are the signposts that keep you on track and alert you to potential roadblocks. Here’s how KPIs can benefit your agency:

1. Data-driven insights – KPIs provide a clear, objective view of your agency’s performance, cutting through the noise and gut feelings. Track the right metrics and you can identify what’s working, what’s not, and where you need to focus your efforts to drive results.
2. Early warning system – KPIs act as an early warning system for your agency, alerting you to potential issues before they become full-blown crises. Monitor key metrics consistently and you can spot trends and take proactive steps to course-correct before it’s too late.
3. Continuous improvement – KPIs help you set benchmarks, measure progress, and continuously raise the bar for your agency’s performance. Track your metrics over time and you can identify areas for improvement, test new strategies, and optimize your processes for maximum impact.
4. Enhanced credibility – When you can demonstrate your agency’s value through tangible, data-backed results, you build trust and credibility with clients. KPIs provide the proof points you need to showcase your expertise and justify your fees.
5. Informed decision-making – KPIs give you the insights you need to make smart, data-driven decisions about your agency’s future. Whether you’re considering new service offerings, expanding your team, or investing in new technology, KPIs help you weigh the risks and rewards and choose the path that aligns with your goals.

Maximize the benefits of KPIs – choose the right metrics to track, ones that are directly tied to your agency’s goals and your clients’ needs. Establish a regular cadence for reviewing and analyzing your KPIs, so you can stay on top of your performance and make timely adjustments as needed.

How to Combine OKRs and KPIs

Now that we’ve explored the benefits of OKRs and KPIs separately, let’s talk about how they can work together to supercharge your agency’s success.

Think of OKRs as the strategic framework that sets the direction for your agency, while KPIs are the tactical tools that help you execute and measure your progress. Used in tandem, they create a powerful synergy that drives focus, accountability, and continuous improvement.

Here’s how it works in practice:

Say your agency sets a goal to be the best social media marketing company in your region. Your Objective might be: “Establish our agency as the premier social media marketing partner for businesses in [your city/region].”

Support this Objective with the following Key Results:

• KR1: Increase social media revenue by 50% over the next quarter
• KR2: Achieve a customer satisfaction score of 90% or higher for social media clients
• KR3: Secure 10 new social media retainer clients with an average contract value of $5,000/month

Now, track your progress towards these Key Results – identify the KPIs that align with each one:

• KR1 KPIs: Social media revenue, revenue growth rate, average contract value
• KR2 KPIs: Customer satisfaction score, client retention rate, Net Promoter Score
• KR3 KPIs: Number of new social media clients, average contract value, sales conversion rate

Monitor these KPIs consistently and you can see how well you’re tracking towards your Key Results and, ultimately, your Objective. Notice a particular KPI lagging? Dig deeper to identify the root cause and take corrective action.

For example, if your sales conversion rate is lower than expected, review your sales process, identify bottlenecks or skill gaps, and provide additional training or resources to your team. Or, if your customer satisfaction score starts to dip, reach out to clients to gather feedback, identify areas for improvement, and make necessary changes to your service delivery.

The beauty of this approach is that it creates a virtuous cycle of goal-setting, execution, measurement, and continuous improvement. Use OKRs to set ambitious goals and KPIs to track your progress – you’ll stay focused on what matters most, make data-driven decisions, and adapt quickly to changing circumstances.

Of course, combining OKRs and KPIs effectively requires more than just setting them and forgetting them. It takes ongoing communication, collaboration, and a willingness to experiment and iterate. But when you commit to the process and put in the work, the results can be be game-changing for your agency.

FAQ and Concerns About OKRs and KPIs

As you explore the world of OKRs and KPIs, it’s natural to have questions and concerns. Let’s tackle some of the most common ones head-on.

OKR vs. KPI – Which one to choose?

One of the most frequent questions I hear from agency leaders is: “Should I use OKRs or KPIs? Which one is right for my agency?”

The answer is: you don’t have to choose. OKRs and KPIs are not mutually exclusive; in fact, they work best when used together. OKRs provide the strategic framework for setting ambitious goals and driving transformative change, while KPIs provide the tactical tools for measuring progress and identifying areas for improvement.

Think of it this way: OKRs are the map that sets the direction for your agency, while KPIs are the signposts that keep you on track and alert you to potential roadblocks. Use both in tandem and you create a powerful system for setting goals, executing on them, and continuously improving your performance.

Can OKRs replace KPIs?

Another common question is whether OKRs can replace KPIs altogether. The short answer is no.

While OKRs are a powerful tool for setting ambitious goals and driving transformative change, they’re not designed to replace KPIs. KPIs play a critical role in measuring the health and performance of your agency on an ongoing basis. They provide the granular, tactical data you need to make informed decisions and optimize your operations.

Think of it this way: OKRs are the North Star guiding your agency towards big, bold destinations, while KPIs are the instruments that help you navigate the journey and stay on course. Without KPIs, you’d be flying blind, unable to track your progress or identify areas for improvement.

Can KPIs be used as Key Results in OKRs?

Absolutely! In fact, using KPIs as Key Results is a great way to ensure your OKRs are measurable, actionable, and tied to your agency’s performance.

When setting Key Results for your OKRs, look for KPIs that directly support your Objectives and provide a clear, quantifiable way to track progress. For example, if your Objective is to increase client retention, your Key Results might include KPIs like:

• Increase average client lifetime value by 20%
• Achieve a Net Promoter Score of 80 or higher
• Reduce client churn rate by 10%

Use KPIs as Key Results and you create a clear line of sight between your agency’s goals and the metrics that matter most. This alignment helps you focus your efforts, track your progress, and make data-driven decisions that drive results.

Can a KPI become an OKR?

Yes, a KPI can evolve into an OKR when it becomes a critical driver of your agency’s success and requires a focused, concerted effort to improve.

Let’s say you’re tracking a KPI around client retention, and you notice that your churn rate is starting to creep up. If reducing churn becomes a top priority for your agency, you might create an OKR around it, with Key Results focused on improving retention:

Elevate a critical KPI to an OKR and you create focus and urgency around improving it. This approach ensures that your team is aligned around the goal, and that you’re dedicating the necessary resources and effort to drive meaningful change.

How Often Should OKRs and KPIs be Reviewed?

Another common question is how often you should review your OKRs and KPIs. The answer depends on the cadence of your business and the nature of your goals, but here are some general guidelines:

• OKRs – Review progress on a weekly or biweekly basis, with more in-depth check-ins at the end of each quarter. This cadence ensures that you’re staying on track and allows you to course-correct quickly if needed.
• KPIs – Review on a monthly or quarterly basis, depending on the metric and its importance to your business. Some KPIs, like website traffic or lead generation, may require more frequent monitoring, while others, like client retention or profitability, may be better suited to quarterly reviews.

The key is to find a rhythm that works for your agency and your goals. The most important thing is to establish a regular cadence of reviewing and discussing your OKRs and KPIs, so you can stay on top of your performance and make data-driven decisions.

It’s also important to remember that OKRs and KPIs are not set in stone. As your business evolves and your priorities change, you may need to adjust your goals and metrics accordingly. Be open to revisiting and revising your OKRs and KPIs as needed, to ensure they remain relevant and aligned with your agency’s direction.

Pitfalls and Mistakes to Avoid

While OKRs and KPIs can be incredibly powerful tools for driving agency success, there are also some common pitfalls and mistakes to watch out for. Here are a few to keep in mind:

KPI Tunnel Vision

Getting caught up in the day-to-day pursuit of hitting your KPIs is easy, but don’t lose sight of the bigger picture. KPIs are great for measuring tactical performance, but they don’t provide the strategic direction that OKRs do. Focus solely on KPIs and you risk optimizing for short-term gains at the expense of long-term success.

For example, if your agency is laser-focused on hitting a monthly sales target, you might be tempted to take on any client that comes your way, even if they’re not a good fit for your services or values. This might boost your revenue in the short term, but it could lead to client churn, team burnout, and reputational damage in the long run.

Balance your KPIs with strategic OKRs that keep you aligned with your agency’s mission, values, and long-term goals. Use OKRs to create a north star that guides your decision making and ensures you’re not sacrificing your future for short-term wins.

The Silo Trap

Another common pitfall is letting your OKRs and KPIs create silos in your agency. If each department or team is focused solely on their own metrics, it can lead to a lack of collaboration, communication, and alignment around shared goals.

Imagine your sales team is pushing hard to hit their revenue targets, but they’re not coordinating with the client services team to ensure that the clients they’re bringing in are a good fit for your agency. This could lead to strained relationships, missed deadlines, and ultimately, unhappy clients and high turnover.

Break down these silos by creating OKRs that span across teams and departments, fostering cross-functional collaboration and ensuring everyone is working towards the same overarching goals. Encourage constant communication and coordination between teams, and celebrate collective wins, not just individual achievements.

Set-It-and-Forget-It

OKRs and KPIs are not a one-and-done exercise. You can’t just set them at the beginning of the quarter or year and then forget about them until the next planning cycle. This is a surefire way to lose momentum, alignment, and accountability.

Make your OKRs and KPIs a living, breathing part of your agency’s operations. Review them frequently, track progress, and make adjustments as needed based on changing circumstances or new information. Use them as a framework for ongoing communication, feedback, and coaching with your team.

Establish a cadence of check-ins and reviews that keeps your OKRs and KPIs front and center. This could include weekly team meetings, monthly all-hands updates, and quarterly strategic reviews. The more consistently you engage with your goals and metrics, the more likely you are to achieve them.

Vanity Metrics

Tracking metrics that make your agency look good, even if they don’t actually contribute to your success, is tempting. Vanity metrics like social media followers, website traffic, or email subscribers might give you a temporary ego boost, but they don’t necessarily translate into meaningful business outcomes.

Focus on metrics that are directly tied to your agency’s goals and your clients’ success. For example, instead of just tracking website traffic, measure the quality of that traffic. Look at metrics like time on site, pages per visit, and conversion rates to gauge how engaged your visitors are and whether they’re taking desired actions.

Similarly, instead of just counting your social media followers, track metrics like engagement rate, click-through rate, and leads generated from social. These metrics give you a more accurate picture of how your social media efforts are contributing to your agency’s growth and success.

Perfectionism Paralysis

Also, don’t let the pursuit of perfect OKRs and KPIs keep you from getting started. Many agencies get so caught up in trying to identify the “right” metrics or set the “perfect” targets that they never actually implement anything.

Remember, OKRs and KPIs are meant to be iterative and adaptable. Start with a few key metrics that you know are important to your agency’s success, and refine them over time based on what you learn. Set targets that are ambitious but achievable, and adjust them as needed based on your progress and changing circumstances.

The most important thing is to get started and commit to the process. You’ll learn and improve as you go, but you won’t see any benefits if you never take the first step.

Common Mistakes to Avoid

When implementing OKRs and KPIs, be mindful of these common mistakes:

Best Practices and Tools

To get the most out of your OKRs and KPIs, it’s important to follow best practices and use the right tools. Here are a few tips to keep in mind:

Collaborate and Align

Working together is key to making OKRs and KPIs work. Get your team involved early on, hear their ideas, and get them on board. This makes sure everyone’s on the same page and working towards the same goals. Make sure your goals are on the same page as your agency’s mission and values. This connects the daily grind with the bigger goals, giving your team a sense of purpose and direction.

Focus on Impact

It’s all about results, not just what you did. When setting goals, focus on measuring what really matters to you and your clients. For example, instead of tracking “number of social media posts published,” measure “engagement rate” or “leads generated from social.” Embrace quality over quantity – it’s better to have a few highly impactful OKRs and KPIs than a long list of less meaningful ones.

Aim for Ambition

Set OKRs that are ambitious enough to challenge your team, yet achievable so they feel inspired to go beyond their limits. Reach for the stars, but stay grounded. Keep your team motivated, not disillusioned. Use historical data, industry benchmarks, and your agency’s growth trajectory to set realistic KPI targets. Strike a balance between aspirational and attainable, pushing your team to grow without setting them up for failure.

Communicate

Maintain consistent and transparent communication by sharing your OKRs and KPIs with the entire agency. Keep their participation top of mind by using tools like dashboards, leaderboards, or regular updates. Celebrate wins, learn from setbacks, and use them as opportunities to recalibrate and improve. The more openly and frequently you communicate, the more engaged and accountable your team will be.

Be Data-Driven

Make data-driven decisions and adjustments, using the insights from your OKRs and KPIs to inform strategic moves, resource allocation, and process improvements. The data is there – use it to drive meaningful change and growth. Stay agile and adaptable, ready to adjust or replace OKRs and KPIs that are no longer relevant or effective. The goal is progress, not perfection.

Foster Accountability

Cultivate a culture where everyone takes ownership and is accountable, with clear assignments for each OKR and KPI. It’s important for everyone to understand their responsibilities and how their contributions impact the agency’s overall success. Integrate OKRs and KPIs into your performance discussions and reviews to guide coaching, development, and recognition of your team. The more ownership they feel, the more invested they’ll be in driving results.

Invest in Tools

Provide your team with the tools and training they need to thrive. Opt for software that streamlines the management of your OKRs and KPIs, enabling easy setup, tracking, and visualization, while integrating with your current systems and providing tailored reporting options.

More importantly, invest in your people – provide the training and support they need to understand and effectively use OKRs and KPIs. The more you grow their skills and confidence, the more they’ll grow your business.

Conclusion

Agencies need a clear plan for success in marketing these days, and data is key. Use OKRs and KPIs together and you can create a powerful system for driving focus, alignment, and continuous improvement across your organization.

OKRs provide the strategic framework for setting ambitious, meaningful goals that push your agency to new heights. KPIs provide the tactical tools for measuring progress, identifying areas for improvement, and making data-driven decisions.

The synergy between OKRs and KPIs fuels a virtuous cycle of goal setting, execution, and optimization, empowering your agency to reach remarkable achievements. Use best practices, avoid the usual pitfalls, and use the right tools – you can make your agency succeed with these frameworks.

However, implementing OKRs and KPIs isn’t a single event. It needs constant dedication, talking, and tweaking. You’ll need to keep an eye on your goals and numbers, and get everyone on the same page.

The journey might be tough, but the reward is worth it. Use OKRs and KPIs to make your agency stand out.