Evaluating Your Client Segmentation

Evaluating Your Clients Value Matt Reiner CIA Financial Advisor

Evaluating Your Client Segmentation

There’s a saying often attributed to the late poet Maya Angelou that directly applies to our profession: “People will forget what you said. People will forget what you did. But people will never forget how you made them feel.”

Understanding how our clients feel when dealing with us is an important step in improving their client experience. And that can go a long way in differentiating you from your competitors. Let me explain why.

Believe it or not, how you segment your client roster is hugely important in determining the type of experience your clients (hopefully) enjoy. Yet all too often, investors use financial shorthand to classify and segregate the people whose wealth they manage.

For decades, our business categorized clients based on their assets under management or AUM. Typically, they were broken down by those with $500,000 to $1 million, who were often called C-Listers or Silver Level. Then came the $1-3 million people, the B-List or Gold Level, followed by the A-List or Platinum Level clients with $3 million and more. Year after year, that was the grouping. And there was a major problem with it.

We ranked our clients that way because we viewed the size of their AUM as an indication of how much revenue they would generate for our company. The higher ranked they were, the more importance we placed on them as clients.

This means we are looking at things based on what’s best for us, not what’s best for them.

That approach works well for your firm’s bottom line. But it doesn’t do much for the client, does it? We should always be thinking about the client experience. It should be number one in your mind when making decisions about your business. 

Yes, thinking about the bottom line does matter, but it should never be our primary focus.

Because thinking about our needs doesn’t do a single thing in addressing our clients’ concerns. Providing a better client experience means going above and beyond to service all your clients, regardless of where they fall in AUM.

It means delivering proactive, personalized, and relevant communication. It doesn’t matter if it’s a text message, an email, or a phone call. What matters is that it’s a message tailored specifically for them and their personal interests and that they recognize it.

Consider your own experience as a customer. How does it make you feel when a service provider focuses their attention specifically on you, your needs, and your wants?

Good, right?  The same is true with our clients. Receiving personalized attention feels good — so good that people will come back for more of those feels.

So instead of segmenting your clients based solely on their AUM, consider sorting them another way. Group them based on their hobbies, interests, financial goals — even their former professions. For example, passionate golfers, foodies, world travelers, wine connoisseurs, lawyers — even coin and stamp collectors. This system lets the client know you recognize what is special about them, and sends the powerful message that they are more than just a name on a list.  

Remember, too, that communication dynamics are changing. Our clients routinely receive personalized messages from other businesses. It makes sense they would expect their advisor to communicate with them the same way.

Enhancing the client experience doesn’t require spending big bucks on the newest computer software. But you do need to invest time in rethinking how you view your client book, how you categorize the people listed in it, and what you are doing to connect with them in ways that are more effective for you and make the client feel cherished in return.

These few simple steps taken internally will vastly enhance the client experience externally. 

And when you take care of the clients, the bottom line tends to take care of itself.