“Knowledge about your business is NOT ‘an’ important part of your success: It is the MOST important ingredient of success.” Al Diamond

Most agents are too busy “doing” their business to understand whether what they’re doing is busy work or productive. Of course daily communications with prospects, clients, carriers and employees is important. But the difference between an ‘insurance agent’ and the ‘owner of an insurance agency’ is the knowledge of the metrics of the agency. Many agency owners are just insurance agents with an organization growing around them. They are busy with clients, prospects and underwriters and their staff is there to clean up and keep the business operating. But the agent never knows what he or his staff is doing and whether that is making him money or costing him money.

Business owners are those agents who know what is working and what isn’t within their organization and are actively managing the process in a proactive instead of reactive way.

The reason so many agents pay attention to the minutiae of everyday transactions and don’t pay attention to the long term historical and projected condition of the business, itself, has little to do with the complexity of the task. Believe me, trying to deal with several vastly different insurance programs for a variety of clients and having to deal with a wide variety of problems that are brought to you every day is MUCH MORE COMPLEX than the measurement of the status of your business on an on-going basis. Those measurements are finite and repetitive while client relationships are infinite and unique every time the phone rings.

Yet many agents have told me that they don’t have the time, talent and patience to drive reports and to understand their businesses statistics sufficiently to change what doesn’t work and promote what does. When I do our GPP Analysis (Growth, Productivity, Profitability) in an agency, I invariably ask for data that would corroborate or deny the pain points as the source or the symptom of a problem. Most often I’m told that the information has never been collected, whether or not it was even available from the agency’s management system. This means that the agency owner is feeling pain (his or his staffs) and knows that something needs to change but doesn’t quite know what or why. What the agent doesn’t quite understand is that data needs to be collected over time in order to validate and address the critical issues in the agency. Even if we know exactly what is needed, coming in and running a single report or a set of current data won’t properly identify the problem or the trend. We won’t even know if the data is accurate without trending gained from a historical perspective.

The way to address CHANGE needed to balance and progress your business IS difficult because change is always uncomfortable and difficult not because it is hard or complex. Even the best change is stressful until you and your staff realizes that the change is for the better and does not threaten anyone.

But many of our clients call us in to CHANGE things before they really know what needs to change, why and how. They feel PAIN! So they want to address the source of the pain. But once you reach a certain mature age (wink, wink) you realize that sometimes treating the symptom is not the same as relieving the source of the pain.

We often hear the ‘symptom – not the problem’ issue when we are called in to relieve a nasty personnel problem. From the agent’s perspective the problem is the employee. In reality the problem, itself, is rarely JUST the employee and often bounces back to other staff, management, the agency owner and/or systems and procedures that are frustrating and don’t work as they should.

So we will identify the real problem by probing and running the numbers that tell us the real SOURCE of the problem.

Have you ever wondered why, in response to a pain issue, the doctor wants to draw blood and run tests? He is trying to determine the source of the symptom and wants to rule out those things that would work under some prognoses, but not on others. We do the same thing as consultants.

However, how much easier (and less expensive) would it be if the agency had a “Dashboard Report” that would show historical perspective and changes taking place that would pinpoint the source of the problem? It won’t identify the solution – that’s our job as owners. But it will isolate where the problem lies so you don’t waste time addressing symptoms and following false leads.

The important take-away is that some metrics are common and important to all agents while others are unique and important to YOU.

How To Create Your Metrics:

1. Start measuring – something – ANYTHING – on a daily, weekly, monthly, YTD, annual and rolling 12 mo basis.

    a. What we normally see measured first is New Business, then Lost Business because the heartbeat of the agency is growth and these two measurements identify whether you are growing, shrinking of staying the same.

    b. Add metrics to your report from time-to-time and eliminate those metrics that don’t prove meaningful to you.

2. Don’t do it yourself. Have someone else in the agency responsible for the generation of the reports after you have created the exact report that you want and have validated it against manual records.

    a. Unless you’re a one-(wo)man shop, assign the generation of reports to others. The best person to measure NB is someone who does NB. Similarly the best person to track retention and Lost Business comes from the function of renewing or cancelling policies.

    b. Having others manage and report to you begins the process of accountability and management. The ones who “do it” are required to report, whether positive or

3. Do it yourself first and/or have it done manually followed up by automated reports. If you don’t run dual manual/automated reports side-by-side for a while, you will never believe or trust the automated reports. Only when you are convinced that the automated report brings you the same accurate results as the manual report do you stop dual reporting.

    a. negative. It also allows you to see the forest from outside, a pseudo-objective view, instead of being so involved in the report subject that you tend to rationalize both good and bad results instead of being able to express appreciation for jobs well-done or disappointment in failure.

4. Be patient – it takes at least one year of data to establish the beginning of trending. The reason we measure on various scales is because each measurement is important to a different audience and for a different reason.

    a. Daily measurement is important to a manager and the direct employee for measuring the quality and quantity of work.

    b. Weekly measurement defines the department productivity and activity as a monitor on management as well as on individual performance.

    c. Monthly and Year-To-Date reporting is your gauge for the progress of your efforts compared to prior year and to Plan.

I know I’ve said it before, but it’s worth repeating and tattooing on your arm. “Knowledge about your business is NOT ‘an’ important part of your success: It is the MOST important ingredient of success.” Al Diamond