At Business Health, we subscribe wholeheartedly to Peter Drucker's idea that "you can't manage what you can't measure.”
There's a lesser-known Drucker quote that's equally important, though: "If you can't measure it, you can't improve it."
So, to the question at hand: how are your growth targets going?
I attended a progress-to-plan meeting for a practice recently and I was impressed with both the quality of adviser performance data available as well as how openly they discussed the company and individual results. They chose the important metrics of revenue and client numbers when comparing their budget for each adviser, and some good discussion was had around the table as they reviewed their progress to plan.
It was obvious that each adviser was at a different stage in their development, and this had been recognised in the initial budgeting process.
While some businesses – like this one – are getting better at monitoring their progress, many more still don't have access to the data they need to measure KPIs efficiently and effectively. Worse, many businesses don't even have a documented plan or an agreed budget to measure progress towards.
Interestingly, some businesses have the opposite problem: they have access to so much data that they aren't sure what data to use. Paralysis by analysis, if you will.
Whichever category your business falls into, we think the following five metrics represent the essential components of any practice's growth plan. Each of these should be measured in a regular meeting:
- Number of prospects introduced to the business: How many prospects were introduced to the business and, just as importantly, how were they introduced?
Monitoring the source of each new client – whether it's referrals, centres of influence or social media – will provide valuable insights into the success of your marketing efforts. - Number of prospects that became clients: This is also an important metric. What's the quality of the prospect? What did they know about us before we meet them? How are our referrers positioning our offer?
- Revenue per new client: No surprise here. What was charged for the initial advice? What ongoing fee was agreed to? Was it consistent for each client, and for each adviser? Did they meet the minimum charge guidelines?
- Ongoing revenue per client: Similarly, what about existing clients? What was the total fee paid by them? Did it meet the minimum fee required? If not, why not (and what are you going to do about it)?
- Number of adviser meetings: How many client meetings were held, whether face-to-face or virtual? How many were with new clients, and how many were with existing clients? Were meetings held with centres of influence/third party referral partners? Was it within expectations?
There could be many more metrics to cover off than these five, but they're a good start for any advice business. Of course, implementation of action items from the business plan fits in here, too, but I'll save that for another article.
Consider what drives success in your business. How will that success be measured? Get the data and make some decisions.
And don’t forget: if you're having trouble, ask for help.
Advisely Team
