Home Wealth Management Constructing a Consumer Segmentation and Service Mannequin

Constructing a Consumer Segmentation and Service Mannequin

Constructing a Consumer Segmentation and Service Mannequin

Do your purchasers dictate what sort of enterprise you’ve, or does your online business dictate the kinds of purchasers you serve?

Early in your profession as an advisor, you might have had comparatively few standards for accepting new purchasers. The extra belongings you possibly can collect, the higher! However as your agency and repair providing have matured, you and your workforce might need assistance managing the e-book you have constructed. Have you ever ever gone again to evaluate whom you are working with and the assets and time they require of you?

One methodology that might provide help to redirect your power towards the fitting individuals and actions—and create extra room for progress—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 grasp the individuals in your present shopper base. Suppose by way of each quantitative standards (e.g., belongings beneath 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 the moment obtain the identical providers, similar to a monetary plan, an annual evaluation assembly, common outreach, and invites to shopper occasions? (Trace: If the reply is sure, put together for a change!)


Separating your purchasers into segments based mostly on clearly outlined standards and figuring out the providers you will ship to every one might 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 a lot of methods advisors can method shopper segmentation. The secret’s to search out the one which works finest for you and your online business, which suggests having a imaginative and prescient in your agency and the perfect purchasers you wish to work with.

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

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


With the ABSLN segmentation methodology, you continue to establish your high purchasers 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 purchasers into segments labeled “S,” “L,” or “N.”

  • S/Strategic: People on this tier have the potential to turn into supreme purchasers. Take into account younger, excessive earners with sturdy financial savings, enterprise homeowners with illiquid wealth, or HENRYs (excessive earners, not wealthy but).

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

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

This method affords deeper perception into the sorts of purchasers at the moment in your e-book, which you’ll then use to establish the kinds of providers you will ship to them.

From technique to motion. Just lately, I labored with a Commonwealth-affiliated advisor on some capability points. They had been questioning whether or not to rent a service advisor to handle the underside half of their e-book. Collectively, we used the ABSLN methodology to phase their purchasers and analyze how a lot income every tier introduced it. It shortly grew to become 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.

By utilizing this evaluation, although, the advisor realized that lots of their present purchasers fell into the “non-ideal” class. They determined to reduce the providers they offered to that group and had been in a position to unencumber a while, which was their authentic objective.

Pairing Segmentation with Companies

As soon as you have completed the shopper segmentation train, you possibly can transfer on to constructing your shopper service mannequin, the place you will establish which providers you will ship to every phase—and the way typically.

Should you’re like many advisors I work with, you might 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 certain 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 reduce any exceptions.

The common Commonwealth advisor generates solely 9 p.c of their complete income from the underside 50 p.c of their shopper base. So, though it might sound apparent, attempt spending most of your time on segments that generate vital income and fewer time on those who don’t.

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

The correct agency companion can counsel choices for delegating sure duties. At Commonwealth, we’ve helped advisors optimize effectivity via a spread 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 should unencumber capability, establish non-ideal purchasers and, if potential, refer them to a unique advisor to melt their transition.

Your outcomes would possibly begin wanting one thing just like the beneath grids, with all providers—together with funding administration, monetary planning, advertising 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, you could want to regulate.

  Consumer Tier
A+ A B S L N
Evaluate Conferences            
Proactive Outreach            
Funding Administration            
Monetary Planning            
Particular Experiences 
(e.g., shopper occasions, milestone recognition)
(e.g., 401(ok) evaluation,
CPA and lawyer collaboration)
  Consumer Tier
Evaluate Conferences 1 in-person assembly per yr (concentrate on subjects related to youthful purchasers: 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 companion’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., shopper occasions, milestone recognition)
Presents for all times occasions (e.g., new residence, trip, new little one)
(e.g., 401(ok) evaluation,
CPA and lawyer collaboration)

401(ok) evaluation

Actively consult with CPAs/attorneys prepared to have interaction with youthful purchasers

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


Cost customary funding administration charges in keeping with “A+,” “A,” or “B” purchasers

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. Determine what you possibly can present your purchasers whereas additionally being aware of your capability.

Now What? From Technique to Motion

You’ve got 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 online business to resolve the place to make changes.

Listed below are some questions to think about:

Instance: Should you meet with “B” purchasers much less typically than earlier than, it is best to modify your scheduling course of.

Instance: Be certain everybody understands learn how to onboard purchasers at totally different tiers.

Instance: Should you’ll be outsourcing funding administration in your “strategic” purchasers, be able to share why you’re feeling that is the fitting 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 shopper’s report.

By aligning every space of the enterprise together with your new service mannequin, you will be higher positioned to draw extra supreme purchasers and scale your online business.

Prepared for a Change?

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

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 supreme purchasers. Plus, you’ll be capable to help elevated income with fewer assets, which suggests extra revenue heading on to your agency’s backside line. And that is a win-win.


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