How many of you have key performance indicators (KPIs)?


Okay, that’s a bit of a trick question; we all do.


KPIs are simply numbers that tell us what has happened. Your KPIs are floating around telling the story of what has or hasn’t happened in your business.


So, it’s not a matter of whether you have KPIs or not. It’s a matter of whether you close your eyes and pretend they don’t exist or if you decide to pay attention and pursue those most relevant to you.


What are you tracking?


Can you say off the top of your head, WITH CERTAINTY, how much new business you’ve written year-to-date? How about the amount of business you’ve lost? How about the amount of potential revenue in your pipeline?  

I don’t think anybody would argue those are critically important numbers. But it’s shocking how few in our industry can answer those questions. We talk to agencies ALL the time that don’t track any KPIs (even sizable agencies). Numbers as basic as growth rate or the amount of business written are an unknown for way too many.

As an industry, we don’t have this habit of tracking numbers. I suspect I know why.

The financial reward for mediocrity in this industry has been ridiculously high.

Agencies have been able to survive and maintain healthy margins despite not knowing their numbers. But that is changing. Agencies that don’t start tracking their numbers and using them to make better-informed decisions will find survival a challenge.

You don’t need to measure EVERYTHING


If you spent all your time measuring EVERYTHING, you wouldn’t have time to do anything else. We’re not proponents of that, but some numbers have to be measured.

Look at any of our planning guides, and you’ll see what we feel is important. Numbers tell a story at the agency, department, and even individual level and you have to know the numbers so you know what story to tell.

Here are a few KPI examples we all need to track:

  • Financial – Revenue/employee. Spread/employee. Net growth. Net profit.
  • Sales – Conversion ratio. Close-ratio. Average revenue/client. New business written. Active prospect revenue.
  • Service – Client retention by revenue. Client retention by case count.
  • Marketing – Website visitors. Conversions. Leads generated. Lead scores. 

We all know the old axiom, “You can’t manage what you don’t measure.” Once you start measuring something, the likelihood you manage it more effectively is almost a certainty. Active management of an area leads to improvement, but it all starts with the measurement.

If you want to know what measures you should start with, first identify what needs to be improved, validate that it’s on track, and create a KPI.

Make them personal

An agency’s struggle with KPIs is often similar to their struggle with creating processes. They make it way more mysterious and complicated than it should be.

Remove the mystery from both:

  • To create a process, simply write down what you’re currently doing and then work to improve it.
  • For KPIs, use the ones we list in our planning docs, which are pretty straightforward calculations.

To fully leverage KPIs’ impact, you need to identify and track the most relevant KPIs for every team member. That may sound daunting, but here’s a simple exercise to do just that:

  1. For each role, identify the two (MAYBE three) most critical results to be produced.
  2. For each of those results, identify the two most critical behaviors in producing those results.
  3. For each behavior, identify a quantifiable and objective way of measuring whether the behavior is happening.
  4. There you go – that measurement is your KPI.

Keeping track 

Tracking is another challenge for many. Yeah, the first time around may take some work, but it becomes simple to maintain once you do. Many, if not most, KPIs can be automated through your agency management system or CRM.

Most organizational KPIs only need to be updated quarterly (some annually). However, individual KPIs should likely be tracked monthly. But don’t let this burden fall to any one person or even to the leadership team.

Have each team member track and report their own KPIs. After all, nobody should be more vested or invested in their performance than the individuals themselves.

Numbers are just the start 

KPIs aren’t magic by themselves. They need to be plugged into a transparent and organizational culture where everyone is mutually accountable to share the KPIs for which they are responsible. There must be a culture in place that takes action when the KPIs indicate it is necessary. 

KPIs are just numbers. Numbers don’t lie. Maybe that’s the real challenge; too many of us can’t handle the truth.

If you want help with knowing where you want to go in terms of goal planning, KPIs, and other aspects of your business, then download our handy Insurance Agency Planning Guide! ⬇️ ⬇️ ⬇️

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