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Constructing a Consumer Segmentation and Service Mannequin

Do your purchasers dictate what sort of enterprise you’ve gotten, or does your small business dictate the forms of purchasers you serve?

Early in your profession as an advisor, you could have had comparatively few standards for accepting new purchasers. The extra belongings you could possibly collect, the higher! However as your agency and repair providing have matured, you and your crew could need assistance managing the guide 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 technique that would aid you redirect your vitality towards the proper individuals and actions—and create extra room for progress—is constructing a consumer segmentation and repair mannequin. This is how.

What is the Make-up of Your E-book?

Step one in constructing a consumer segmentation and repair mannequin is to grasp the individuals in your present consumer base. Assume by way of each quantitative standards (e.g., belongings underneath administration and income generated) and qualitative components (e.g., degree of belief, coachability, and referral historical past).

Additionally, take into account what you do for them. Does everybody at present obtain the identical providers, akin to a monetary plan, an annual overview assembly, common outreach, and invites to consumer occasions? (Trace: If the reply is sure, put together for a change!)


Separating your purchasers into segments primarily based on clearly outlined standards and figuring out the providers you may ship to every one may also help improve capability and construct scale.

A Technique for Consumer Segmentation

After you have a greater understanding of your present purchasers, it is time to begin categorizing them. There are various methods advisors can method consumer segmentation. The secret is to search out the one which works finest for you and your small business, which implies having a imaginative and prescient to your agency and the best purchasers you need to work with.

Chances are you’ll be acquainted with the segmentation method that locations purchasers into classes labeled “A,” “B,” “C,” or “D” primarily based on both income or AUM. Whereas this quantitative method helps to determine your most worthwhile purchasers, chances are high you already know these purchasers nicely. So, what about the remainder of your guide?

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


With the ABSLN segmentation technique, you continue to determine your high purchasers as “A+,” “A,” or “B” primarily based on the income they generate to your agency. For the underside tiers, although, you may use qualitative standards to position purchasers into segments labeled “S,” “L,” or “N.”

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

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

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

This method gives deeper perception into the sorts of purchasers at present in your guide, which you’ll then use to determine the forms of providers you may ship to them.

From technique to motion. Lately, 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 guide. Collectively, we used the ABSLN technique to phase their purchasers and analyze how a lot income every tier introduced it. It rapidly turned clear that hiring a brand new advisor would price them way over 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 purchasers fell into the “non-ideal” class. They determined to cut back the providers they offered to that group and have been capable of unlock a while, which was their authentic objective.

Pairing Segmentation with Companies

As soon as you have completed the consumer segmentation train, you possibly can transfer on to constructing your consumer service mannequin, the place you may determine which providers you may ship to every phase—and the way usually.

If you happen to’re like many advisors I work with, you could have your providers mapped out in your head. However belief me, it is value documenting them. Like with different processes, clear documentation will assist be sure that you persistently provide high-quality service.

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

Your objective is to create a persistently excellent expertise for the purchasers in every phase and to attenuate any exceptions.

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

Take into consideration what number of hours you may have to decide to delivering numerous providers, and remember to consider time for enterprise improvement and follow administration actions.

The correct 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 that you must unlock capability, determine non-ideal purchasers and, if doable, refer them to a distinct advisor to melt their transition.

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

If the entire variety of hours you may spend to ship service throughout every consumer class would not align with the typical income earned from that class, you could want to regulate.

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

401(ok) overview

Actively check with CPAs/attorneys keen to have interaction with youthful purchasers

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


Cost commonplace funding administration charges in line with “A+,” “A,” or “B” purchasers

Cost annual consulting price to bolster the worth of proactive monetary planning

In fact, there’s no magic quantity for what number of consumer conferences to carry every year, and the variety of choices will fluctuate by advisor. Resolve what you possibly can present your purchasers whereas additionally being conscious of your capability.

Now What? From Technique to Motion

You have segmented your purchasers and created a service mannequin. Now, it is time to implement your technique in your follow. This implies systematically evaluating each facet of your small business to determine the place to make changes.

Listed below are some questions to contemplate:

Instance: If you happen to meet with “B” purchasers much less usually than earlier than, you must modify your scheduling course of.

Instance: Be certain everybody understands how you can onboard purchasers at totally different tiers.

Instance: If you happen to’ll be outsourcing funding administration to your “strategic” purchasers, be able to share why you’re feeling that is the proper transfer for them.

Instance: Maybe you share the identify of one other advisor who could 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 consumer’s file.

By aligning every space of the enterprise along with your new service mannequin, you may be higher positioned to draw extra best purchasers and scale your small business.

Prepared for a Change?

When you do not have a deliberate consumer segmentation and repair mannequin, your purchasers can find yourself dictating how your small business runs. Why not attempt a distinct method? In spite of everything, providing your purchasers an important service expertise should not come on the expense of your personal enterprise’s progress.

Taking time to finish these workouts lets you focus your vitality the place you want it most. The profit is extra time to handle extra relationships—primarily with best purchasers. Plus, you’ll be capable to help elevated income with fewer sources, which implies extra earnings heading on to your agency’s backside line. And that is a win-win.



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