Tuesday, May 24, 2011

How to Segment Your Book – Know Who Your Best Clients Are and Service Them Well

Quick, how many "A" clients do you have? What about "D" clients? Do you have many of those? There is real value in knowing how many clients you have and then categorizing them based on where they fall in terms of investable assets. Other useful metrics are future probability of additional assets, referrals, and just plain how pleasant they are to deal.

I'm fairly certain that most financial advisors know how many total clients they have and perhaps how many A clients, but very few know specifically where each of their clients fall on the scale of desirability.  This is a valuable exercise that will help you determine how to best service your clients based on the 80/20 rule. If you don't already know, the 80/20 rule states that 80% of results will come from 20% of inputs. Translation: 80% of your revenue will come from 20% of your clients.

How does this benefit you?
Your "A" clients deserve most of your attention. After segmenting your book, you should create a Client Service Matrix to plan how you will service each level of client in your book. This will help you identify what you need to do and when you need to do it.

Here's how to segment your book:
  • Use an excel spreadsheet.
  • Label the first sheet as a Summary Page to list your totals
  • Label one sheet each for A through D clients (or however you'd like to name your segments – you could do Platinum, Gold, Silver, and Bronze or some other measure).
  • Determine the dollar amount for each level of client
  • Here's an example:
  • A clients - $1,000,001 and over
  • B clients - $501,000 - $1,000,000
  • C clients - $251,000 - $500,000
  • D clients - $100,000 - $250,000
  • In the first column of each page, label "Quantity" and enter the number "1" for each client
  • Second column, label "name" and enter the name of each client
  • Third column, "assets"  and the total assets of each client/household.
  • Perform an "autosum" for each column for number of clients and total assets
  • On the Summary Page, tally up total number of clients and total assets by using "Data, Consolidate" for each page of data.

Need help organizing your practice?
I have all my own custom exercises that will help you create financial success in your practice including an Excel Spreadsheet Template to help you Segment Your Book.
Schedule a Sample Coaching Session Today!

Suzanne Muusers

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