History Worth Repeating

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To paraphrase the famous line,

“Those who don’t study and learn from their own history are doomed to repeat it.”  

That sounds ominous, doesn't it? 

And, in many/most cases, it is. However, it isn’t ominous for what may seem to be the obvious reason. The issue isn’t in the repetition itself; it’s ominous because of the results that are being repeated. It’s ominous because so few are making adjustments and actively working to improve their results. 

Numbers don’t lie 

Whether you’re an individual producer or are responsible for running your entire agency, you must track the numbers (Key Performance Indicators—KPIs) that tell the story of your performance. These numbers tell the story of where you are and, when tracked over time, document where you’ve been (your history). Most important of all, they shine a light on where you need to adjust in order to improve the next chapter of your story. 

As obvious as all this likely sounds, I know very few of you track KPIs. I know there are even fewer who make the adjustments they KPIs indicate you should make. 

There are countless numbers you could track, but that’s not productive for many reasons. However, here are some KPIs to track that should be non-optional. 

Producer AND Agency KPIs

Agency should track per producer and in aggregate

• New business written over the last 12 months – This is a measure of momentum and, therefore, confidence. 

• Retention rates over the last 12 months—This measures how big a hole needs to be filled before you realize net growth. Most in our industry claim 95% and are shocked when they see how much business is really being lost. 

• Total revenue opportunity in the pipeline—The closest thing you have to a crystal ball of your growth over the next 90 – 180 days. 

• Conversion and close ratios—If you don’t measure your success rate at every step of your sales process (you do have a process to follow, don’t you?), you can never identify areas of weakness and inefficiency that cost you those precious opportunities. 

• Average revenue per client relationship—There may be no more important indicator of your ability to grow and grow profitably than the average size of your clients. 

• Average revenue per prospect opportunity—This will tell you if you are on track to improve your average revenue/client or dilute it. 

Agency KPIs

These are in addition to those listed above

• Annualized revenue per team member—This is a key factor in determining the agency's profitability. A reasonable target is $200,000. 

• Annualized revenue per producer – This gives insight into two key elements of agency operation: how growth-focused your producers are and how supportive the agency is of those producers. 

• Annualized revenue per support person – This allows for a deeper look into how efficiently you are servicing your book of business. A reasonable target is $350,000. 

When you look through this list, I hope you agree each is important. By tracking them, interpreting them, and making appropriate adjustments, your story and history become increasingly positive. Your history becomes one of consistent and increasing improvement. The compound effect of repeating history like this makes repetition desirable and enviable.  

Aggregate growth goals may seem mysterious and overwhelming. By breaking it down, it feels and becomes much more manageable.