Effective hourly rate
Effective hourly rate is an account's monthly fee divided by every hour actually spent delivering it. It is the single fastest test of whether a retainer was priced correctly, because it can be compared directly against your blended cost per hour.
The hours have to include everything: strategy, production, account management, QA, and founder time spent unblocking the account. Leaving out account management is the most common omission and it is usually the one that moves the number.
An effective rate at or below blended cost means the account was underpriced when it was sold. No amount of delivery efficiency recovers a price that was wrong at signature.
How Hydra uses it
Hydra calculates effective hourly rate per account before recommending any delivery change, because a delivery fix applied to a pricing problem produces a faster loss.
Covered in depth
Why your agency is busy and still not profitable