The document discusses client segmentation strategies for professional services practices. It recommends conducting 6 workshops on topics like customer value proposition, charging models, and customer communication. The focus is on segmenting clients to identify the most profitable ones and those at risk of becoming unprofitable. It provides tools and a 3-step process for segmentation: collecting client data, analyzing and sorting it, then drilling down on top clients to identify common traits of an "ideal client" profile. The goal is to improve profitability by better understanding different client needs and how to attract and retain the most lucrative segments.

1. Own your Practice

2. Practice offering Transformation
6 x Business Transformation Workshops
1. Client Segmentation
2. CVP
3. Charging
4. Client Communication
5. Client Review
6. Transform

5. Own your Practice
Operational
Efficiency
Practice
Support /
Development
and
Legislation
Advice
Charging
Models
Customer
Segmentation
Customer
Value
Proposition
Practice Financials
Personal
Marketing
Strategy
Management
Information
Product
Strategy

6. Segmentation
The cornerstone to improving the
Profitability of client relationships

7. Agenda:
Why client segmentation is critical
Benefits of segmentation to you and your business
Segmentation in action – a case study
What will segmenting your clients tell you?
Some exercises and tools to help
Actions for implementation
1.
2.
3.
4.
5.
6.

8. If you’re not thinking segments, you’re not thinking.
“
“
Theadore Levitt,
Author & Professor @ Harvard Business School

9. How did we get here?
Survival
Growing Pains
Mature Lunacy

10. Client Segmentation – Why bother?
It is the key to profitable client attraction and retention:
•Define your proposition
•Define your “ideal client profile”
•Identifying your most profitable clients
•Identify which clients are not profitable and which are “at risk”
•Calculate your “average revenue per client”

11. Client Segmentation - The Challenge
Historically it has been hard for advisers:
•Time needed to gather & review fragmented data
•Defining workable segments
•Avoiding subjectivity based on:
•What they bought in the past
•The length of time since they were last seen

12. Focus

13. Light Bulb Moments

14. Expertise

15. Better Return
on Marketing Spend

16. Better Results

18. Segmentation in Action
First Class 12
Segment A
Business Class
60
Segment B
Economy
399
Segment C
60% of the profit comes from the 12 people at the front of the plane

19. “Text book” segmentation model
10%
25%
65%
Segment A Segment B Segment C

20. Effective segmentation - 3 step process:
Step
One
Name
Job/Role
Industry/ Sector
Age
Location
Marital Status
Ongoing Revenue
AUM
Other Assets/total net worth
Income
Source
Service Demand
Collect client data

21. Effective segmentation - 3 step process:
Step
Two
Sort and Analyse Data
Descending order
of recurring revenue
Group into deciles
Overlay Service Demand

22. Effective segmentation - 3 step process:
Step
Three
Drill Down
Top 20/30
clients
Identify common characteristics
Gather more data if required

23. Exercise 1

24. Client analysis (example)

25. Insights, Implications Analysis

26. Exercise 2

27. Revenue vs. Service Demand

28. Insights, Implications Analysis

29. Revenue vs. Service Demand

30. Exercise 3

31. Top 20 client analysis

32. Tools to Help

33. Client analysis
Clients sored by recurring revenue
Number of clients
Total
Recurring Revenue
% of Recurring Revenue
Recurring Revenue per client
1st Decile (top 10%)
2nd Decile (11 - 20%)
3rd Decile (21 - 30%)
4th Decile (31 - 40%)
5th Decile (41 - 50%)
6th Decile (51 – 60%)
7th Decile (61 – 70%)
8th Decile (71 – 80%)
9th Decile (81 – 90%)
10th Decile (91 -100%)
Total

34. Client analysis
Recurring Revenue Range
No of clients
Total Revenue
Service Demand level 1
Service Demand level 2
Service Demand level 3
Service Demand level 4
Service Demand level 5
> R p.a.
Average = R
No.
R
> R < R p.a.
Ave = R
No.
R
> R < R p.a.
Ave = R
No.
R
> R < R p.a.
Ave = R
No.
R
< R p.a
Ave = R
No.
R
Total
Ave = R
No.
R

35. Top 20 client analysis
customer
Name
Annual Revenue
Estimated net worth
Assets with Firm
Annual Income
Age
Occupation
Service demand level
(1 – 5)
Service 1
Service 2
Service 3
Service 4
How acquired?

36. Barriers to effective segmentation
•Lack of or poor quality (or fragmented) data
•Changing adviser behavior and outdated work practices
•Resistance to greater levels of reporting and accountability
•Maintaining motivation (to undertake the segmentation work) over time

37. Actions for Implementation:
1.List your clients in descending order of recurring revenue
2.Group your customers into deciles/quartiles using the customer Bank Analysis Tool
3.Ask yourself what insights this data is giving you, what the implications are and what you are going to do about it.
4.Rank each customer in terms of service demand on a scale of 1 – 5
5.Overlay this information onto the Revenue v. Service Demand Matrix
6.Identify both your “at risk” customers and your “non profitable customers”
7.Once again ask yourself the insights, Implications, Action question
8.Drill down into your top 20/30 customers using the top 20 customer analysis tool to identify the common characteristics that these customers share
9.Use this to create your “Ideal customer” profile

38. Actions for Implementation:
1.List your customers in descending order of recurring revenue
2.Group your clients into deciles using the Client Analysis Tool
3.Ask yourself what insights this data is giving you, what the implications are and what you are going to do about it.
4.Rank each customer in terms of service demand on a scale of 1 – 5
5.Overlay this information onto the Revenue v. Service Demand Matrix
6.Identify both your “at risk” customers and your “non profitable customers”
7.Once again ask yourself the insights, Implications, Action question
8.Drill down into your top 20/30 customers using the top 20 customer analysis tool to identify the common characteristics that these customers share
9.Use this to create your “Ideal customer” profile

39. Actions for Implementation:
1.List your customers in descending order of recurring revenue
2.Group your customers into deciles/quartiles using the customer Bank Analysis Tool
3.Ask yourself what insights this data is giving you, what the implications are and what you are going to do about it.
4.Rank each customer in terms of service demand on a scale of 1 – 5
5.Overlay this information onto the Revenue v. Service Demand Matrix
6.Identify both your “at risk” customers and your “non profitable customers”
7.Once again ask yourself the insights, Implications, Action question
8.Drill down into your top 20/30 customers using the top 20 customer analysis tool to identify the common characteristics that these customers share
9.Use this to create your “Ideal customer” profile

40. Actions for Implementation:
1.List your customers in descending order of recurring revenue
2.Group your customers into deciles/quartiles using the customer Bank Analysis Tool
3.Ask yourself what insights this data is giving you, what the implications are and what you are going to do about it.
4.Rank each client in terms of service demand on a scale of 1 – 5
5.Overlay this information onto the Revenue v. Service Demand Matrix
6.Identify both your “at risk” customers and your “non profitable customers”
7.Once again ask yourself the insights, Implications, Action question
8.Drill down into your top 20/30 customers using the top 20 customer analysis tool to identify the common characteristics that these customers share
9.Use this to create your “Ideal customer” profile

41. Actions for Implementation:
1.List your customers in descending order of recurring revenue
2.Group your customers into deciles/quartiles using the customer Bank Analysis Tool
3.Ask yourself what insights this data is giving you, what the implications are and what you are going to do about it.
4.Rank each customer in terms of service demand on a scale of 1 – 5
5.Overlay this information onto the Revenue vs. Service Demand Matrix
6.Identify both your “at risk” customers and your “non profitable customers”
7.Once again ask yourself the insights, Implications, Action question
8.Drill down into your top 20/30 customers using the top 20 customer analysis tool to identify the common characteristics that these customers share
9.Use this to create your “Ideal customer” profile

42. Actions for Implementation:
1.List your customers in descending order of recurring revenue
2.Group your customers into deciles/quartiles using the customer Bank Analysis Tool
3.Ask yourself what insights this data is giving you, what the implications are and what you are going to do about it.
4.Rank each customer in terms of service demand on a scale of 1 – 5
5.Overlay this information onto the Revenue v. Service Demand Matrix
6.Identify both your “at risk” clients and your “non profitable clients”
7.Once again ask yourself the insights, Implications, Action question
8.Drill down into your top 20/30 customers using the top 20 customer analysis tool to identify the common characteristics that these customers share
9.Use this to create your “Ideal customer” profile

43. Actions for Implementation:
1.List your customers in descending order of recurring revenue
2.Group your customers into deciles/quartiles using the customer Bank Analysis Tool
3.Ask yourself what insights this data is giving you, what the implications are and what you are going to do about it.
4.Rank each customer in terms of service demand on a scale of 1 – 5
5.Overlay this information onto the Revenue v. Service Demand Matrix
6.Identify both your “at risk” customers and your “non profitable customers”
7.Once again ask yourself the insights, Implications, Action question
8.Drill down into your top 20/30 customers using the top 20 customer analysis tool to identify the common characteristics that these customers share
9.Use this to create your “Ideal customer” profile

44. Actions for Implementation:
1.List your customers in descending order of recurring revenue
2.Group your customers into deciles/quartiles using the customer Bank Analysis Tool
3.Ask yourself what insights this data is giving you, what the implications are and what you are going to do about it.
4.Rank each customer in terms of service demand on a scale of 1 – 5
5.Overlay this information onto the Revenue v. Service Demand Matrix
6.Identify both your “at risk” and your “non profitable” customers
7.Once again ask yourself the insights, Implications, Action question
8.Drill down into your top 20/30 clients using the top 20 client analysis tool to identify the common characteristics that these clients share
9.Use this to create your “Ideal customer” profile

45. Actions for Implementation:
1.List your customers in descending order of recurring revenue
2.Group your customers into deciles/quartiles using the customer Bank Analysis Tool
3.Ask yourself what insights this data is giving you, what the implications are and what you are going to do about it.
4.Rank each customer in terms of service demand on a scale of 1 – 5
5.Overlay this information onto the Revenue v. Service Demand Matrix
6.Identify both your “at risk” customers and your “non profitable customers”
7.Once again ask yourself the insights, Implications, Action question
8.Drill down into your top 20/30 customers using the top 20 customer analysis tool to identify the common characteristics that these customers share
9.Use this to create your “Ideal Client” profile

46. Thank you