Business Metrics that Every TPA Business Leader Should Know

Industry experts in a Nov. 11 session of ASPPA All Access discussed ways to measure return on the investment of resources that is entailed in business activity.

Megan Crawford, partner at Williams Benefit Consulting, LLC and who also serves as Co-Chair for the ASPPA Women in Retirement Conference, and Bill Presson, Vice President of EGPS, discussed business metrics and practical ideas regarding how one can employ technology to keep metrics current and valuable. The session was moderated by Amanda Iverson, partner and Chief Operating Officer at Pinnacle Plan Design, LLC.  

Profits 

Gauging profits, one of the metrics on which Crawford and Presson focused, entails looking a gross and net profits, Crawford said—each of which reveal different things. To wit: Gross profits reflect how successful a company’s management team is concerning general revenue, while net profits reflect how much of each dollar translates into profit. 

Concerning net profits, Crawford had a caveat. She cautioned that one should remember that if one looks at net profits often, e.g., from one month to the next, it’s possible that one may see a negative result. Crawford offered reassurance regarding such an instance, because it may reflect nothing more than a recent major short-term expenditure. Nonetheless, she said that net profit figures are still important, since they show financial variances and what they are. And, she added, if figures are negative for the year, it shows that it may be necessary “to look at expenses and improve processes.”

Net Promoter Score

The net promoter score, Presson said, is a simple way to measure customer loyalty. He noted that unlike long and exhausting satisfaction surveys, it entails asking a customer a single question: How likely is it that you would recommend our company’s services to a friend or colleague?

The survey can be done on paper or electronically, Presson said, but generally it should be done in a phone call. The advantage of that, he said, is that the caller can immediately request an explanation from the respondent who gave a bad rating. Presson said that one must follow up with those who are detractors and should follow up with those whose responses are more passive.  

Employee Engagement 

Employee engagement and happiness are more important than ever before, Crawford said, and cited benefits to boosting employee satisfaction: boosting long-term commitment to the company, as well as employees’ service and accuracy.

Attendees had suggestions regarding ways to boost employee engagement through the session chat feature:

• gift cards;
• bonuses;
• virtual lunches;
• weekly check-ins; and 
• half-day Fridays.

Crawford stressed the importance of listening to employees and facilitating their openness. “Especially in a smaller firm, we have to build a culture for employees to speak up” when they have a concern about something, she said. 

Crawford also suggests conducting anonymous employee surveys in order to obtain more in-depth feedback. But be ready to take action on the findings, she added. “There’s no sense in getting all that data if you’re not going to do something with it. You have to be willing to take action on feedback,” she said. 

“We’ve really hit a crossroads here,” Crawford said. “It’s so hard to get good talent, retaining them is a huge piece of this,” she continued.

Web Traffic

“You should be building your site to promote the business, build the brand, and hopefully drive sales,” said Presson. He continued, “so why waste the time of someone who visits your site?” He suggested ways to measure web traffic: 

• Sessions and Users: How does the website traffic develop?
• New and Returning Visitors: How often do users return to the website?
• Time on Page: How much time do visitors spend on a page?
• Average Page Load Time: How important is the page speed, actually?
• Bounce Rate by Browser: Are there issues with certain browsers?
• Average Session Duration: What is the quality of the generated traffic?
• Top Five Search Queries: What are the most common search queries?
• Pages per Session: How many pages are being visited on average?
• Top five Landing Pages: Which landing pages are most relevant?

Customer Lifetime Value

Measuring customer lifetime value is important because it can help in determining which customer segments or buyer personas will drive the most revenue for a company. In addition, Crawford said, customer lifetime value is “a great way to measure account managers’ overall performance and what market segments you’re most profitable in and which ones you should be targeting.”  

SMART Metric

Crawford summed up key considerations when using metrics to gauge business operations, based on the acronym SMART: 

Specific: Make metrics as specific as possible.
Measurable: Metrics should be measurable; if they are not, there will be no way to track the success of business operations. 
Attainable: Consider whether there is a way to get the information you need. And remember that it is helpful to set attainable goals as well. “You want to be sure you’re setting yourself up for success,” Crawford said.
Relevant: Metrics need to be relevant to your business. 
Time-Bound: Metrics need to be set up with timing in mind. For instance, when choosing metrics one should consider how often metrics will be looked at.