Today's Viewpoint: A MarshBerry Publication

The Right Tools to Measure And Optimize Your Growth

Data is essential to establishing the appropriate benchmarks for setting challenging but realistic objectives and key performance indicators (KPIs). With the right tools, a firm can optimize their production and service staff operations.

With the new year on the horizon, now is a perfect time to establish objectives and key performance indicators (KPIs) for the coming year. Utilizing data to establish the appropriate benchmarks is crucial to setting challenging, and yet realistic benchmarks.

The Producer Stack Ranking

MarshBerry’s Producer Stack Ranking provides empirical insights into producer performance on an individual level, while also being compared to all producers within MarshBerry’s proprietary financial management system, Perspectives for High Performance (PHP), database. Producer Stack Ranking allows firms to compare their producers to others with similar experience for a comprehensive picture of that individual’s performance.

MarshBerry is often asked how much business a newly hired producer should be bringing in, either in new business or in total book of business for the year. When comparing your own sales staff, it is important to factor in the producer’s experience level to ensure a realistic comparison to their peers.

MarshBerry utilizes the following categories:

  • Million $ Producer: Over $1 million total book of business
  • Executive Producer: Over 3 years tenure and >$500k book of business
  • Senior Producer: Over 3 years tenure and <$500k book of business, validated
  • New Producer: Under 3 years tenure and <$500k book of business, validated
  • Unvalidated Producer: A producer in training who does not write enough business to cover their payroll expense

Based on PHP, the chart below shows the average sales velocity (new business as a percentage of prior year commissions and fees) needed to be considered “average” by experience level.

Sales velocity is one of the strongest indicators of how well an organization’s producers are performing. For New and Unvalidated Producers, a higher sales velocity is expected, as any new business brought in, compared to a smaller book, results in higher percentages.

How are your producers performing? Here are some practical tips on how to use this information:

  • Rank your producers. Based on a full year of data, rank all of the producers from largest to smallest in both new and total book of business and by producer category.
  • See who’s below average. Identify how many of your producers are below average and set goals for them to improve their performance.
  • Review sales velocity. Consider each producer’s sales velocity and how it relates to the organization’s overall business growth goals. For example, it takes 15% annual growth in order to double in size in five years so you may choose to set a validated producer’s sales velocity goal at 15% plus your leakage rate in order to keep them on the same trajectory.
  • Watch for stagnate Senior producers. Pay particular attention to any producer in the Senior category who may not be reaching average levels. These producers, who are validated and can have significant industry experience, often have trouble growing their book past $500k, even over time.

The Staff Optimizer: Maximizing your service operations

MarshBerry’s Staff Optimizer tool helps firms determine how efficient their service and support teams are relative to average and Best 25% of industry performance. If a firm has an opportunity to improve, the model showcases four options that brings their results in line with desired performance.

MarshBerry routinely tracks service staff productivity, and the gap between the average firm and top-performing firms has only continued to grow given the recent hard market conditions. According to data from PHP, firms in the Best 25% had average service staff productivity of $487,000 in total commissions & fees per service person. Those firms spent 41% more, on average, per service person payroll, but achieved nearly twice the productivity, and 142% more in organic growth relative to the lowest 25%.

Data-based empirical insights are vital to gaining valuable knowledge and understanding of the intricacies of a firm. Understanding the performance of each team member, along with how they compare to industry benchmarks, can assist in setting realistic goals and motivate producers to perform.

Both the Producer Stack Ranking and the Staff Optimizer tools are available exclusively to subscribers of MarshBerry’s Value Intelligence (VI) Portal.

Contact Dani Zhelezova
If you have questions about Today's ViewPoint, or would like to learn more about how MarshBerry can help your firm determine its path forward, please email or call Dani Zhelezova, Vice President, Business Intelligence, at 440.392.6566.

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