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Constructing a Consumer Segmentation and Service Mannequin

Do your shoppers dictate what sort of enterprise you’ve, or does your corporation dictate the kinds of shoppers you serve?

Early in your profession as an advisor, you could have had comparatively few standards for accepting new shoppers. The extra belongings you may collect, the higher! However as your agency and repair providing have matured, you and your workforce could need assistance managing the ebook you have constructed. Have you ever ever gone again to evaluate whom you are working with and the sources and time they require of you?

One methodology that would aid you redirect your power towards the suitable folks and actions—and create extra room for development—is constructing a shopper segmentation and repair mannequin. This is how.

What is the Make-up of Your E book?

Step one in constructing a shopper segmentation and repair mannequin is to know the folks in your present shopper base. Assume when it comes to each quantitative standards (e.g., belongings below administration and income generated) and qualitative components (e.g., stage of belief, coachability, and referral historical past).

Additionally, think about what you do for them. Does everybody at the moment obtain the identical companies, akin to a monetary plan, an annual evaluate assembly, common outreach, and invites to shopper occasions? (Trace: If the reply is sure, put together for a change!)


Separating your shoppers into segments based mostly on clearly outlined standards and figuring out the companies you will ship to every one can assist improve capability and construct scale.

A Technique for Consumer Segmentation

After getting a greater understanding of your present shoppers, it is time to begin categorizing them. There are numerous methods advisors can strategy shopper segmentation. The secret’s to seek out the one which works greatest for you and your corporation, which suggests having a imaginative and prescient in your agency and the perfect shoppers you wish to work with.

You might be aware of the segmentation strategy that locations shoppers into classes labeled “A,” “B,” “C,” or “D” based mostly on both income or AUM. Whereas this quantitative strategy helps to establish your most worthwhile shoppers, likelihood is you already know these shoppers properly. So, what about the remainder of your ebook?

Commonwealth’s Enterprise Consulting workforce usually recommends our advisors use a extra holistic segmentation methodology referred to as the “ABSLN” methodology.


With the ABSLN segmentation methodology, you continue to establish your prime shoppers as “A+,” “A,” or “B” based mostly on the income they generate in your agency. For the underside tiers, although, you will use qualitative standards to put shoppers into segments labeled “S,” “L,” or “N.”

  • S/Strategic: People on this tier have the potential to change into very best shoppers. Think about younger, excessive earners with robust financial savings, enterprise house owners with illiquid wealth, or HENRYs (excessive earners, not wealthy but).

  • L/Legacy: These shoppers could have a legacy relationship that justifies offering continued service—for instance, “A” shoppers’ kids, widows, or private buddies.

  • N/Non-ideal: These shoppers don’t match into every other segments. For them, you may proceed providing service, switch them to a junior advisor, or discontinue your relationship.

This strategy presents deeper perception into the sorts of shoppers at the moment in your ebook, which you’ll then use to establish the kinds of companies you will ship to them.

From technique to motion. Not too long ago, I labored with a Commonwealth-affiliated advisor on some capability points. They have been questioning whether or not to rent a service advisor to handle the underside half of their ebook. Collectively, we used the ABSLN methodology to section their shoppers and analyze how a lot income every tier introduced it. It rapidly turned clear that hiring a brand new advisor would value them excess of the belongings being managed. So, the advisor determined it would not make monetary sense to rent assist in that space.

Through the use of this evaluation, although, the advisor realized that lots of their current shoppers fell into the “non-ideal” class. They determined to reduce the companies they supplied to that group and have been capable of unlock a while, which was their unique purpose.

Pairing Segmentation with Companies

As soon as you have completed the shopper segmentation train, you’ll be able to transfer on to constructing your shopper service mannequin, the place you will establish which companies you will ship to every section—and the way usually.

When you’re like many advisors I work with, you could have your companies mapped out in your head. However belief me, it is price documenting them. Like with different processes, clear documentation will assist make sure that you constantly provide high-quality service.

To assist with selections about service choices, replicate on these questions:

Your purpose is to create a constantly excellent expertise for the shoppers in every section and to attenuate any exceptions.

The typical Commonwealth advisor generates solely 9 % of their whole income from the underside 50 % of their shopper base. So, though it could sound apparent, strive spending most of your time on segments that generate important income and fewer time on people who don’t.

Take into consideration what number of hours you will must decide to delivering numerous companies, and you’ll want to think about time for enterprise improvement and observe administration actions.

The suitable agency accomplice can counsel choices for delegating sure duties. At Commonwealth, we’ve helped advisors optimize effectivity by way of a variety of outsourced enterprise options. For instance, some advisors outsource a single tier’s funding administration actions whereas persevering with to handle portfolios for different segments.

If you could unlock capability, establish non-ideal shoppers and, if doable, refer them to a unique advisor to melt their transition.

Your outcomes may begin wanting one thing just like the under grids, with all companies—together with funding administration, monetary planning, advertising and marketing initiatives, and shopper occasions—on the left and the tiers which may be eligible for every service on the proper.

If the overall variety of hours you will spend to ship service throughout every shopper class does not align with the common income earned from that class, it’s possible you’ll want to regulate.

  Consumer Tier
A+ A B S L N
Overview Conferences            
Proactive Outreach            
Funding Administration            
Monetary Planning            
Particular Experiences 
(e.g., shopper occasions, milestone recognition)
(e.g., 401(ok) evaluate,
CPA and lawyer collaboration)
  Consumer Tier
Overview Conferences 1 in-person assembly per yr (deal with subjects related to youthful shoppers: wealth accumulation, paying off scholar loans, shopping for a home, planning for household wants)
Proactive Outreach 3 further textual content messages and/or Zoom conferences (vs. cellphone/electronic mail)
Funding Administration Outsource to agency accomplice’s managed account answer
Monetary Planning Use extra turnkey monetary planning software program, reserving extra customizable choices for “A+,” “A,” or “B” shoppers
Particular Experiences 
(e.g., shopper occasions, milestone recognition)
Items for all times occasions (e.g., new dwelling, trip, new youngster)
(e.g., 401(ok) evaluate,
CPA and lawyer collaboration)

401(ok) evaluate

Actively check with CPAs/attorneys prepared to interact with youthful shoppers

Assign new HENRY shoppers to agency’s next-gen advisors


Cost customary funding administration charges per “A+,” “A,” or “B” shoppers

Cost annual consulting charge to strengthen the worth of proactive monetary planning

After all, there’s no magic quantity for what number of shopper conferences to carry every year, and the variety of choices will range by advisor. Resolve what you’ll be able to present your shoppers whereas additionally being conscious of your capability.

Now What? From Technique to Motion

You’ve got segmented your shoppers and created a service mannequin. Now, it is time to implement your technique in your observe. This implies systematically evaluating each facet of your corporation to determine the place to make changes.

Listed here are some questions to think about:

Instance: When you meet with “B” shoppers much less usually than earlier than, it’s best to regulate your scheduling course of.

Instance: Be certain that everybody understands how one can onboard shoppers at totally different tiers.

Instance: When you’ll be outsourcing funding administration in your “strategic” shoppers, be able to share why you’re feeling that is the suitable transfer for them.

Instance: Maybe you share the identify of one other advisor who may be a greater match for them.

Instance: Relying in your CRM system, you might be able to arrange workflows and add different key standards in every shopper’s file.

By aligning every space of the enterprise along with your new service mannequin, you will be higher positioned to draw extra very best shoppers and scale your corporation.

Prepared for a Change?

When you do not have a deliberate shopper segmentation and repair mannequin, your shoppers can find yourself dictating how your corporation runs. Why not strive a unique strategy? In any case, providing your shoppers an awesome service expertise should not come on the expense of your personal enterprise’s development.

Taking time to finish these workout routines means that you can focus your power the place you want it most. The profit is extra time to handle extra relationships—primarily with very best shoppers. Plus, you’ll be capable to assist elevated income with fewer sources, which suggests extra earnings heading on to your agency’s backside line. And that is a win-win.



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