Data should be an essential component of your agency planning. However, it can be challenging to determine what you should track and measure. Key performance indicators (KPIs) can help you better understand your competitiveness in the broader marketplace and compare your current position to your desired goals. Identifying and monitoring KPIs cannot only help you plan for sustained growth but also pave the way for significant improvements in your agency's performance.
One of the most valuable tools for tracking is to compare your agency’s data to the results of the Best Practices Study
Best Practices
One of the most valuable tools for tracking is to compare your agency’s data to the results of the Best Practices Study conducted by the Big “I” and Reagan Consulting. The study aggregates agency data, comparing benchmarks across six agency revenue categories, ranging from under $1.25 million to over $25 million. In the 2023 report, these key figures provide an excellent baseline for comparison to your statistics:
- Profitability – The agencies in the survey maintained a historically high level of profitability, coming in at 26.3%
- Rule of 20 – The calculation of adding organic growth to 50% of pro forma EBITDA resulted in 24.3 for these agencies
- Organic Growth – An impressive level of 9.5% matches the heights of the early 2000s
- Revenue-Per-Employee—This metric is critically important, and as you might assume, it varies by agency size. However, an amount in the range of $150,000 - $250,000+ seems to be the “wheelhouse” of Best Practices agencies.
Net Promoter Score
A Net Promoter Score (NPS) measures how clients view your agency. The survey consists of a single question asking respondents to rate the likelihood that they would recommend a company, product, or service to a friend or colleague. The resulting ranking is weighted on a scale running from -100 to +100.
Most NPS analysts would agree that a score above 0 is Good, above 20 is Great, and above 50 is Exceptional. And NPS isn’t the only way to measure this customer loyalty metric. Simpler surveys and even your Google Reviews may give you a baseline for comparing similar data.
Google Analytics/SEO
Although Google Analytics 4 has been criticized for its complicated interface, the data is still exceptional. When combined with search engine optimization metrics, you can better understand if your digital footprint is increasing your traffic or not making an impact.
One easy way to start is your Google My Business profile. Have the profile admin show you the year-over-year analytics comparison for a three, six, and 12-month span. This will help you better understand your traffic and growth – or the lack thereof.
Tracking Time
Have you ever considered how much time you or your staff are spending on administrative tasks or certificate management? Similarly, have you ever considered how much time your producers are devoting to non-sales activities? These questions can provide valuable insight into your business workflow and identify areas where you can improve efficiency.
Acquisition Data
How much does it cost you to acquire new customers? What is your agency’s quote-to-bind ratio? How many prospects are you getting per month, and from what sources? All these data can help you better plan for where to spend marketing dollars and build relationships. It may also identify areas for more rapid growth based on previous success.
Retention Data
We all know it costs less to keep a customer than to bring in a new one. So, why aren’t more agencies focusing on retention growth? The industry's average retention rate is currently 82%, although many of the aforementioned Best Practices agencies are seeing retention rates over 90%.
Where does your retention rate stand? At ReFocus AI, we can help you improve it!
As you compile and compare this data, remember two more key functions—planning and implementing. Once you have the data, what will you do with it? What changes will you make? Strategy and execution will make a difference in your agency’s future. Start with your KPIs, and then continue your growth journey!
