You’ve probably been told before that you can’t be “all things to all people.” This phrase is particularly relevant to you as an investment professional. Running your own business puts extraordinary demands on your time, requiring you to focus on activities that will increase your productivity and grow your business. One way to increase productivity is to take a look at your client base and identify the right level of service, pricing, and products to deliver to each, based on client profitability.

The process of categorizing your clients into different tiers or service levels—for example placing them in A, B, or C categories—is called client segmentation. Segmenting your client base will allow you to determine the most appropriate product platforms, fee structures, frequency, and types of touchpoints by client tier. This will ensure that you are spending your time where you are likely to get the best return. While assets are an important factor when determining hierarchy, they are by no means the only criteria you can use. For example, you can have a client who has relatively few assets, but gives you top-notch referrals every month. In this situation, you would probably consider this client an “A” based solely on the referrals.

Once you have your clients divided into tiers, the next step is to determine the right product mix, fee structures, frequency, and type of client service touchpoints for each tier.

A hypothetical segmentation model based on assets under management might look like this:

Remember, you may also wish to apply additional segmentation criteria to more accurately reflect the value of each client including number of client referrals and total net worth, for example. Once you have developed your segmentation model, you will need to keep track of your client service touchpoints to achieve the maximum desired impact. This can be done with a simple Excel^® spreadsheet or through a more sophisticated customer relationship management (CRM) system. In addition, through NetExchange Pro^®, you can create custom groups of accounts to assist with your segmentation. To learn more, please visit the Learning Center in The Source via NetExchange Pro.

Sample Client Service Touchpoints Tracker:

MC = Monthly Calls
RM = Review Meeting

Implementing a clearly defined client segmentation model enables you to offer manageable and consistent levels of service to all your clients based on their value to your business, thus maximizing your productivity.