How do you measure success? In an Oct. 22 session at ASPPA’s 2018 Annual Conference, Pinnacle Plan Design COO Amanda Iverson offered advice on choosing the right metrics for that key function.
Iverson told attendees that the key to approaching the measurement of success is “ICE” — income, clients and employees – and listed ways to measure success for each factor.
Income
Accurate financial statements are very important, Iverson stressed. They provide information on trends and reasons for them, as well as projections regarding cash flow and net income. And, she said, “you have to do financial statements regularly,” noting that she prefers to prepare and issue them monthly.
Financial metrics, said Iverson, include data on:
- profit margins
- growth percentages
- expense trends
- realization
- billing trends
- accounts receivable
Clients
Iverson suggested tracking sales and marketing. This includes looking at:
- proposals
- presentation opportunities
- number of plans
- estimated recurring revenue
- type of work
- cost of acquiring new clients
- lead generators
- plan counts
- plan terminations
- losses
- client retention rates
Iverson argued that it is important to know the clients; to understand why they selected you and why they stay with your firm. And she advocated knowing what needs to be replaced – looking at losses and the requirements for replacing clients.
Employees
Iverson said that the critical metrics regarding employees include:
- retention
- hiring procedures
- efficiency
- turnaround
- evaluations
- employee goals and accountability
- communication
Iverson stressed the importance of being up front with employees. “You’re never doing your employees a service if you don’t give them notification regarding whether they are performing of not performing,” she said. But individual employees’ behavior and results may not be the only factor in play, she acknowledged, telling attendees, “Remember that if everyone misses an expectation, you are wrong, not them. Be ready to adjust expectations.”
“You have to plan for your success,” Iverson said.
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