Improve your sales by tracking key metrics

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It is important to understand the cost of running your insurance agency. From salaries and advertisement to the number of customers and policy premium costs, all these numbers work together. They give you the facts you need to calculate future business. The insurance industry is in a constant state of fluctuation, and it takes more than a great sales pitch to keep your clients happy. Sales Metrics are the means an insurance agency uses to plot the course of current and future business.

What Are Sales Metrics?

Sales Metrics are used to determine the health of a business. They can guide you in understanding where your agency is lacking and help you decide what to focus on to improve your numbers.

Attrition Rate

Also known as ‘churn rate’ is the number of contracts an agency has in proportion to the number of contracts it loses during a specific amount of time. The attrition rate can be figured on customers or based on revenue.

  •   Customer – When you acquire new clients, you expect that they are going to remain clients for an extended period, but that is not always the case. A client may find the service you provide at a lower cost elsewhere, their life situation may change, or your company’s customer service level falls below their expectations.
  •   Revenue – Based on the same principle, but the statistics are based on premiums instead of the number of clients.

In any case, the attrition rate is about knowing what is coming in versus what is going out. A high attrition rate reveals that there is an issue somewhere within your agency. A low attrition rate tells you that you have a happy customer base and that your agents are doing their job.

Run Rate

This metric looks at the overall picture and is based on revenue for a given period. For an insurance agency, it is determined by the total of premiums for all clients. That number is extended over a given amount of time. It is assumed that the current conditions of business will remain unchanged. While not completely reliable, it can be a good indicator of what your agency will do in the future and help you calculate spending in areas like marketing and human resources.

Cost of Acquiring a Customer (CAC)

It is determined when dividing marketing expenditures by how many clients you acquired over a given period. For instance, if you spend $1000 on a marketing campaign and you acquire ten new clients, then your CAC would be $100. CAC, as well as the other sales metrics mentioned, should be measured and evaluated on a periodical cadence such as weekly or monthly 

Client Lifetime Value (CLTV)

Determines the revenue one client brings to your agency over the lifetime of the relationship you have with them. It is client-based because each client has unique circumstances. To calculate a Client’s  LTV you should consider the average revenues accepted by a client over the average number of years a client stays insured with your agency. Client’s LTV is the upper limit of your CAC spending. The larger your LTV is from your CAC the better your agency economics are

When you understand how sales metric numbers work together, then you can determine where to best funnel your resources.


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What Can Sales Metrics Tell You?

Now that we know what sales metrics are, how can they be used to improve your agency’s profit margin?


Sales metrics help you calculate how much you can spend and remain profitable. When you have marketing costs measures and regulated through your CAC, you can redirect finances to other areas to help grow your business.

Client Growth 

Through experience, you can focus on the most strategic marketing practices and not waste funds on methods that are hurting your business. This will lower your CAC and improve your Unit economic. 

Plan for the Future

When looking forward, consider trends in the market. Subscribe to insurance periodicals, blogs, and news sources. Study them and apply what you learn to your agency processes of client acquisition. When you see a trend going one direction, weigh it with potential client needs, then you gain a sense of what the future may hold to predict where you will be in a year’s time. It is through understanding Customer Lifetime Value, your Attrition Rate, and Run Rate, that you can make a reasonable assessment of where your attention must be to get where you want to go.  

Using sales metrics provides insight as to how you have performed in the past, the current health of your agency, and can provide you an outline for probable future productivity. Of course, the business cycle is always fluctuating, but that does not mean you must remain in the dark. Sales metrics can be used to calculate future business. It is about taking current industry trends that show you where the market is heading and combining them with the experience you have gained in working with your clients. 


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How to improve Sales Metrics

Knowing the numbers is half the battle. Now you must act upon that knowledge to improve the performance of your agency. There are several methods you can employ to take your agency to the next level.

  •       Track – There are several sales metric trackers on the market. Sales metric calculators can help you extrapolate your CAC as well as your CLTV. These templates allow you to input your numbers to calculate how much your insurance agency is spending to acquire new clients. You can also input agency data to see how much value each of those clients will bring to your agency over the client’s lifetime and assist with planning for future business. 
  •       Monitor – Marketing strategies require constant monitoring. Whatever source you use be it Social Media, website linking, email campaigns, or general advertisements through papers and television; you need to know how your clients are finding you. The best way to monitor is to ask. Put additional money into methods that are working and cut those that don’t bring potential clients in.
  •       Be updated – Read magazines, watch the news, and talk with other insurance experts. When you recognize a trend switch, assimilate to the direction the market is taking. If you fail to act or act too late, it can cause you to lose current business as well as future business.
  •       Listen to Clients – Not only do trends shift, clients’ needs also shift.  An agency needs to display Agility to keep up with the trends. Be willing to adjust how you work with clients and prospects to keep ahead of the competition. If you do not meet your existing client’s needs, then they may find an agent who will. When you have a client leave your agency, then you not only lose the current revenue, but it will throw off your sales metric calculations, namely your LTV. Most importantly, be wary of your clients’ life situation then you can be ready to offer products that will help you keep their business in house.

Final Thoughts

The health of your agency is dependent on the relationship you have with your clients. The primary way to gauge that health is through regularly reviewing your numbers: where you were a year ago, where you are now, and where you plan to be a year from now. Sales metrics tools are beneficial in determining what needs to be done today to keep your customers happy and to better your agency overall.

A great agency learns all it can by using sales metrics, then acts accordingly to benefit the clients they serve and the agents that serve them. However, there is a difference between knowledge and action. The most important aspect of agency growth is not being afraid to try a new approach. You will make mistakes, and you will experience success; it is about trial and error.


Download our Sales Metrics Calculator to give you a read on what has worked in the past, what is working now, and to give you a path to calculate what will happen tomorrow. When used properly you will gain an advantage over the competition and become an agency that is destined for continued growth.

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Independent insurance agents use Agentero to boost their revenue, save time, and deliver a superior customer experience. We integrate with your current technology to modernize your operations and position you for growth. Check out our website to learn more.

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