What's the ROI of Your Lead Sources?

ROI of Your Lead Source

Key to a successful marketing program is tracking metrics that give you insights into what is working and what is not. Essentially, where are you getting a return on investment?

According to Chuck Blondino of Safeco Insurance, the key differentiator of "high growth agencies" (those that consistently increase the size of their book-of-business by 10%-25%) versus others is that they track their marketing efforts. 

There is no reason to track metrics just to track them, so below are some metrics that will ultimately lead you to information regarding the ROI of your lead sources. With this information in hand, intelligent decisions can be made on where and how to spend marketing dollars.

Lead sources

This is a simple, yet important metric that every agency should be tracking. You can make a lot of marketing decisions by simply tracking where each new client came from. AgencyBloc allows you to customize your lead sources to whatever your agency needs.

Average premium per policy

Total premium $ of active policies
Total # of active policies

Using AgencyBloc's policy report you can very quickly get access to both of these numbers.

Average number of policies per client

Total # of active policies
Total # of active policyholders

You already have the total number of active policies. Using the same policy report in AgencyBloc you can see the total number of unique policyholders in your book-of-business.

Average commission

Total net commission
Total commission received

A quick way to find your agencies average commission in AgencyBloc is to use the Commission Received/Paid report. 

Average revenue per client

Using the three previous metrics, your average revenue per client can be calculated as follows:

Avgerage premium per policy x Avgerage active policies per client = Avg. premium per client
Avgerage premium per client x Avgerage commission = Average revenue per client

For example, if your average premium per policy is $1000, and your average policies per client is 1.5 then your average premium per client is $1500. Multiply that by your average commission of 40% to get an average revenue per client of $600.

Now go back and look at the average revenue per client by lead source. This is going to let you see the return on investment for each lead source. For example, if you're spending $1,000 per month on leads from a site such as Hometown Quotes and you're average revenue per client is $200 then you know that you need to write 5 new clients per month to break even on that investment.

Are you able to get these numbers from your current agency management system?

Try a FREE trial of AgencyBloc and experience first hand how easy it is to keep a pulse on your marketing efforts:

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Mike Ivory

By Mike Ivory on August 27, 2014 in Lead Generation

Mike is the Marketing & Sales Operations Specialist at AgencyBloc. He manages all technology for sales & marketing operations and analyzes results to maximize our success. Favorite quote: "You miss 100% of the shots you don't take - Wayne Gretzky" - Michael Scott More articles


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