You’ve got a lot on your plate: prospecting; service issues; renewals; running your agency; keeping up with the latest legislative and market news; and the list goes on. Then there’s the rest of your life and that needs attention, too. There are only 8,760 hours in a year. Each one is valuable and, once spent, is non-refundable.
Adopting insurance agency software just because it’s there is probably not adequate justification. If that insurance agency technology can save you time, however, well that’s different.
How Much is Your Time Worth?
So just how valuable is each hour? Invaluable and precious beyond measure. However, for the purposes of this post, let’s have some fun with math and put a dollar figure on the value of your work hours.
First, estimate how many hours you work at your insurance agency in a year. Spend 40 hours a week on the job for 50 weeks and your investing 2,000 hours. Adjust this number to reflect your reality — including all that overtime on weekends, evenings and holidays.
Now, calculate how much you earn from all that work. To simplify the math, we’ll assume $100,000 for this example, but check your last pay stub or tax return to get something more accurate. Divide your earnings by the number of hours worked and there’s the value of your work hour. In this case, $50 per hour ($100,000 divided by 2,000 hours). What’s your figure? Take a few minutes and get something close to reality
For purposes of this post, however, we’re going to assume you’re looking at an agency management system. First, because these platforms can save you and your team lots of time. Second, because NextBroker, our agency management software, is at the core of NextAgency. So yes, I’m being self-serving here, but the calculations that follow apply to most any technology you’re considering for your agency.
A Time Journal
Let’s do another exercise. Fair warning, this one is a bit more annoying. For one week, keep a diary of inefficient busy work you do. Don’t count time spent selling or servicing clients. That’s your job. We’re talking wasted time. Spend five minutes chasing down a client file? Write that down. Spend three minutes looking up the phone number of a prospect? Ten minutes tracking down the Post-it with that critical information you need? Write those down.
Work from home only to discover a critical file you need is back at the office? Write down the drive there and back again. Spend hours going back and forth with a prospect to track down the age of the third child of the eighth employee in a thirty-person group you need to wrap up a proposal? Make a note. Spend five minutes trying to recall which client had a billing problem and which had claims issues? Write that down, too.
You get the idea. Any time you’re spending that isn’t directly related to selling or servicing clients is probably wasteful busy-work. Ask your staff to do keep this time journal, too. (Choose a week in which your staff is processing commissions to sub-agents because a) that’s painful; and b) NextBroker greatly simplifies that task so we’re going to look really good in a few paragraphs
Add it Up
Now let’s do the math. Add up all this unproductive minutes you spent in a week and divide by 60. That’s the hours you wasted. Or, put another way, that’s the number of hours you’re investing in being less than efficient.
Multiply this total by your hourly rate and you now have a sense of how much money you’re investing in inefficiency. Spend just an hour a day on this busy work and at our hypothetical rate of $50 per hours and your busy-work is costing you $250 each week. That’s $12,500 per year — if you take two weeks off.
And that’s just what you’re investing. Your staff pays a price for inefficiency, too. Do these calculations for your team and add the result to yours. The time and money adds up fast. Some agencies are wasting tens of thousands of dollars per year.
Is the Investment Worthwhile?
Helping you and your team be more effective and efficient is what agency management systems like NextBroker do. We place client, carrier and agency files are at your fingertips, 24 hours a day wherever you are. The same with contact lists for clients, partners like general agencies and others. Time spent tracking it down, let’s see, carry the zero. Yeah, that’s no time wasted.
What unproductive busy-work NextBroker can’t eliminate gets done quicker. Until carriers and your clients all join the 21st century, some paperwork is inevitable. We help you track that paperwork, which saves even more time.
Let’s say NextBroker reduces your wasted hours by half (we think you’ll save more time, but 50% is an easy number to work with). Applying that savings to your previous assumptions, that’s a savings of $6,250 annually; just for you. Add in the savings your team will experience and the savings rapidly multiply.
On the other hand, your investment in NextAgency is surprisingly affordable. To calculate your agency’s licensing fees just go to www.NextAgency.com/pricing. And when you’re calculating your agency’s cost, remember, support staff use NextBroker for free. And NAHU members save 11 percent.
Do the math. Compare the cost of what you’re spending now on inefficiency and compare it to investing in the efficiency NextBroker’s agency management system delivers. And this only takes into account the value of NextBroker. NextAgency does a lot more, as you’ll see by going to NextAgency.com . While you’re there, please sign up for a webinar to see NextAgency in action. We’re confident that’ll be time well spent.