In Punxsutawney, Pennsylvania every Groundhog Day up to 40,000 people gather to see if Punxsutawney Phil, the world’s most famous groundhog, will see his shadow. If he does, then tradition says we’ll have 6 more weeks of winter and people can prepare accordingly.
Do you have a “groundhog” in your agency? An early indicator that lets you know what to expect – and how to prepare for the future as a result. If not, think back over the last few years. When has your business gone up? When has it gone down? What preceded those changes?
Have a Groundhog
Managing a high-growth independent insurance agency is much easier if you have just a couple specific leading indicators you always watch. Not your sales or cash (those are lagging indicators – by the time they’re dropping there’s already a problem somewhere much earlier in your sales funnel). For many insurance agencies it might be something like the number of incoming phone calls, number of new quotes issued or number of inquiries via your web site. Whatever it is, make sure you have one. It can make the difference between having the time to prepare and being caught by surprise.
In our business there are several, but a couple that are much more reliable than others. Which brings us to the other important step.
Make Sure Your Groundhog is Accurate
Punxsutawney Phil has seen his shadow nearly 100 times, has not seen it 15 times, and nine years are unaccounted for, but his prediction as to whether there will be six more weeks of winter or not only has an accuracy rating of 39 per cent. That’s not very reliable. In fact it would make more sense to see his prediction and do the opposite.
So, look for those leading indicators in your agency, but always test the results against expectations. Otherwise you may find yourself in for a very long winter.
Photo courtesy of Aaron E. Silvers.