Rather than addressing the topic of whether you need an agency management system or not, let’s talk about what you should be doing with one. Other than storing and retrieving client/prospect data the biggest benefit of a management system is the ability to run reports that help manage your agency more efficiently. Here’s a list that are critical to marketing and management success.
1. Customer count: This might sound simple but I have worked with many agents over the years who could not give an accurate estimate on this one. This one is basic and can help with retention and account rounding. It also can help determine staff capacity and whether your staff is overwhelmed or there is more room to grow.
2. Policies per customer. The more policies that each customer has with you, the greater the revenue and the greater the retention. This is a great metric to set goals around, because it has such a huge payoff in other parts of the business.
3. Account Rounding percentage. In personal lines, this is basically how much monoline business do you have or how many of your customers have both their home and auto with you. In agency discussions, it is not uncommon for managers to dramatically overestimate this percentage. By knowing this number, you can generate a lot of new revenue within your shop that will not cost a lot of marketing money. In commercial, there are more ways to slice this one. You could see how many accounts have a BOP/CPP along with workers comp, auto, inland marine, etc. Another way to run this report is to look at cross-sells across departments. How many commercial customers have their personal lines in the agency? How many PL customers have life and health? How many benefit customers have commercial or personal? Running this on a regular basis could help find revenue.
4. Retention/Lost Business reports. This is important because it finds potential holes in the agency where customers could be drifting away. Run this report off of policy or customer count. Once this is determined, you could further analyze the profile of customers who are leaving and stop future run-off. If you could improve this metric by a point or two through the data you collect, you would be able to write less new and still see growth.
6. Source to Sale. Where is your business coming from? This one is a little harder to run, because it is determined on the data that personnel enters when setting up accounts. The best advice is to set up various codes for your sources such as int (internet), ref (referral), radio, etc. This would help decide where to spend marketing money. You could also use it in connection with other reports and may find that certain sources tend to retain less or be less profitable. Then it would be easy to cut off those sources if need be.
If you do not know how to run these today, make sure you contact your vendors or even company partners, and get some training or templates.
Are there other agency management system reports that you like to use and find beneficial?