You cannot manage what you cannot measure. Those are the words of the great management expert Peter Drucker. And that is why having a set of performance measures for your insurance business is essential if you want to be successful. Here are a few of the key metrics you should be looking at.
1. Sales revenue
This is the most basic metric because it pretty much tells the whole story of your business. If you are not making money from sales of a product or service, you won’t survive.
It can also indicate the need or desire for your product, whether your marketing is working, and how competitive you are within your market.
Measuring sales revenue can tell you whether you need to make changes, such as hiring more salespeople. However, when making business decisions, you should not look only at this metric but others as well to get an idea of the overall situation.
2. Customer acquisition costs
This metric is designed to tell you how much you are spending to gain new customers. It will give you an idea about the strength of your growth. For example, you may find that you are acquiring new customers but that your profit margin is slipping. It could be because you are spending too much on marketing and advertising.
Your marketing and advertising should pay for themselves, and this metric will tell you if they are.
3. Customer turnover
This is the number of customers that you lose over a certain time period.
One simple way to calculate the turnover rate – those, for example, who have stopped using your services – is to divide the number of customers lost by your total number of customers over the same amount of time to get the turnover percentage.
4. Customer engagement
This is not quite the same as employee engagement, but rather how your customers interact with your company. For example, if you are an online enterprise, it may be by email or text. Or it may be over the phone. Compiling a metric for this will indicate how customers prefer to deal with your company and which channels are providing the most value.
You can compile statistics by recording the number of the different types of interactions or by surveying your customers.
5. Customer satisfaction
It is obviously important to know if customers are pleased with your products or services. This can again be done by surveying them. First, you need to devise a scale on which to quantify their satisfaction. It could be by numbers, letters, or some pictorial representation. Then you would ask them to choose on that scale.
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