NEWS FROM ACT GROW YOUR AGENCY CONTINUED FROM PREVIOUS PAGE Heavy non-standard agencies selling mostly monoline auto will be in the $140 to $180 range. In low catastrophe areas, average preferred agencies will see $190 to $240. In more affluent areas or places with increased catastrophe exposure, the average revenue per client is higher, averaging $280 to $325 per client. Once you know this number, and you know where your business comes from, you can easily track your return on your investment. Agents who know these numbers are shooting for a 1 to 1 first year return on all of their marketing. For example, if you’re spending $1000 per month on phone book ads, and your average revenue per client is $200, then you know you need to write 5 new clients each month to get a 1 to 1 return. If you’re not, then you may want to consider shrinking your marketing in that area. If your newsletters are driving a 1 to 1 first year return or better based on the increased referral traffic, then you know your marketing there is paying off. Retention ITEM 11: RETENTION FOR YOUR ENTIRE BOOK EACH MONTH To determine your monthly average retention, you’ll need to know: 88.0% 91.0% DIFFERENCE 1ST YEAR INCOME 880,000 910,000 30,000 products. All of that capability for a selective group of agents . . . delivered through local experts 2ND YEAR INCOME 774,400 828,100 53,700 3RD YEAR INCOME 681,472 753,571 72,099 in your market. No wonder The Hanover has grown to be a national powerhouse. Partnering 4TH YEAR INCOME 599,695 685,750 86,054 5TH YEAR INCOME 527,732 624,032 96,300 6TH YEAR INCOME 464,404 567,869 103,465 7TH YEAR INCOME 408,676 516,761 108,085 8TH YEAR INCOME 359,635 470,253 110,618 9TH YEAR INCOME 316,478 427,930 111,451 10TH YEAR INCOME 278,501 389,416 110,915 Keep tracking each of these metrics and you’ll enjoy seeing how your monthly report card can drive growth and stronger profitability. Replacement Cost Appraisals 2E-+*+)G%(::7'(<-%replacement costs can keep both sides out of the grey area of not knowing if%(87-H% !" !" !" !" !" Accurate and supportable independent property insurance appraisals /788%+)97'():-%9;-:<'7=%9-'>+:-? buildings, contents, and property in the open power of The Hanover. www.hanover.com John Vose, Assistant RVP Personal Lines jvose@hanover.com (262) 796-6743 Visit our website today to sign up for a free desktop analysis of your insurance portfolio. Andy Knipfer, RVP Commercial Lines aknipfer@hanover.com (262) 796-6735 Middle Market & Specialty 30+ Target Industries Unique Niches Professional Liability Management Liability Surety Specialty Industrial Specialty Pr Small Niches 100+ Endorsements Flexible Pa Revenue Tools Business Analysis Small Commercial Filed in 48 States Small Programs Customer Center 1500 + Classes Personal Lines Accredited through the American Society of Appraisers @A;-'+-):-*%9<(BB%C-88D>-'9-*%+)%commercial property appraisals AAE Consulting Group Short report turnaround (usually within 48 hours) Austin Engelhardt, ASA 414/350.1630 aengelhardt@aaeconsultinggroup.com !"#$%&'()*+%,()-%.%/'-*0)+(1%23%%$456#% 14 your local Regional Vice President to find out how you can get more juice by plugging into the The Hanover Insurance Group with Eagle icon is a registered trademark of The Hanover Insurance Group, Inc. Is focusing on retention worth it? Here’s how to find out. Multiply your current annual revenue by your current retention rate. Do that over 10 UÊ iÜÊLÕÃ iÃÃÊÌ Ì> Ê« V iÃÊÜÀ ÌÌi Ê ÛiÀÊÌ iÊ«>ÃÌÊ£ÓÊ Ì ÃÊ with us gives you a unique competitive advantage to create winning opportunities. Talk with 882,689 For example, let’s say 12 months ago you had 1000 policies. At the end of the 12 months ending last month, you had 1150 policies. Subtract the 250 policies you wrote new over the 12 months from the ending total of 1150, and you kept 900 or 90 percent of the original 1000. (Be sure you’re not counting rewrites as new!) UÊ/ Ì> Ê« V iÃÊ>ÃÊ vÊÌ iÊ >ÃÌÊ Ì Êi `Ê A broad range of innovative product solutions, including access to specialty and industry niche $1,000,000 REV. ITEM 12: AVERAGE LENGTH OF TIME CLIENTS STAY WITH YOU Determine the number of years each client has been with you. Tracking in whole years as opposed to months is easier when you start. Add up all the years clients have been with you (this will be big). Then divide that total and divide by the number of clients you have. This will give you the average length of time clients stay with you. Excellent marketing tactics should deliver a $1.00 return for every $1.00 spent or better in the first year, but you get a much stronger picture for how profitable your marketing is when you know how long you retain your clients on average. UÊ/ Ì> Ê« V iÃÊvÀ Ê£ÓÊ Ì ÃÊ>} Ê The Hanover has more juice than ever. Are you plugged in? years. Don’t add in new business; just see what happens to your current book over 10 years. Then multiply the same starting annual revenue by a retention number 3 points higher over 10 years, and calculate the difference. Here’s what it looks like for a $1 million revenue agency that moves it’s retention from 88 to 91 percent: www.aaeconsultinggroup.com WISCONSIN INDEPENDENT AGENT NOVEMBER 2012 Z6738WI (11/11) LC 11-345 Total Account Products Customer Center Agency Support Team Retention Tools EFT Bil