As agency workload levels rise and fall, making sure every account executive is handling an appropriate share of AGI is one of the most underused levers in agency management. Making account service people aware of expectations and conversant in workload-to-AGI ratios is a best practice that pays dividends in both productivity and profitability.
Consider a common pattern at smaller agencies: nearly half the staff works in some area of account service, yet when you sit down with each account executive individually and ask how much AGI they personally handle, very few can answer the question. They are working hard. They are simply not working to a defined standard because no one has set one.
What does productive actually mean?
The typical account executive handling a mix of media and production accounts should be able to manage $400,000 to $500,000 in AGI. Remember: AGI is billings minus direct vendor costs. All payroll falls below the line in operating expenses. No payroll is in direct expense.
The AGI figure varies depending on the account mix. An account executive handling a limited number of accounts with significant media budgets may manage $600,000 or more in AGI. An account executive working primarily small production-heavy accounts may work hard to manage $150,000 in AGI. The mix matters.
A useful secondary benchmark is to compare AGI against salary. A typical agency account executive today earns somewhere in the range of $65,000 to $85,000 depending on market and experience. A reasonable expectation is that account executives handle six to ten times their salary in AGI. That ratio gives principals a simple, scalable way to assess whether account service headcount is calibrated correctly to the agency's revenue base.
Finally, when accounting for all sales and service expenses related to an account, including the new business person, account supervisor, daily account executive, and account coordinator, the typical agency should dedicate no more than 30 percent of AGI to total account sales and service. That ceiling keeps the account service structure profitable regardless of account size.
Why AEs fall short of expectations
Account executives who are not meeting AGI expectations are not always underperforming in the traditional sense. Poor work habits account for some of it. More often, the issue is that they are not working smart. They are responsive and busy, but they are not managing their accounts in ways that generate growth or protect margins.
Two structural causes are worth examining. First, the account executive may simply not have been assigned enough AGI to manage. If the workload is too light, productivity benchmarks will never be met regardless of effort. Second, the account executive may not know what the expectation is. It is difficult to hold someone accountable to a standard they have never been told.
What to do about it
Determine right now how much AGI each account executive is responsible for. Then share that number with them and tell them how much growth you expect. Most agency principals have never had this conversation explicitly. Most account executives have never been given a clear AGI target. That gap is where productivity and profitability get lost.
If account executives are incentivized to reach for more AGI, billings increase and the cost-per-dollar-of-revenue goes down. That is the most direct path to improving agency profitability without adding headcount.
