By: Laura S. Moskwa

The segmentation process rates and ranks clients and referral sources based upon positive characteristics associated with them and then places them into a category determined by the number of characteristics met; the categories could be defined as A, B, C and D, with A being your best. Start with your referral sources, as the level assigned to them will affect the ranking of your clients.

Identify the common positive characteristics as defined by your most successful relationships, this could include retirement plan acumen, amount of retirement plan business in general and with your firm or willingness to include your firm as part of their team. Develop a ranking system in which you assign a minimum number of positive characteristics per level, such as to be an A level referral source the individual should have at least 4 of the positive characteristics identified. With a ranking system in place you can assign each of the referral sources in your database a level.

So what is the importance of going through this process? By categorizing all your referral sources everyone at your firm will immediately recognize the level of service and effort that is to be employed, they will focus on your best relationships and stop wasting their time on those not worth it. Note that it is important to enter the segmentation levels in your contact management system(s) to keep the staff apprised of a relationship’s status.

Segmenting your clients is equally important. You want to ensure that your most profitable relationships get the highest level of service. It is understood that there is a certain level of service that is a given for all of your clients, however rush requests from your worst, least profitable clients may be prioritized differently and include a rush fee where for your best clients it may not. When you rank your clients you should keep in mind that all clients associated with your A level referral sources should be considered an A. Why? Because that referral source is a good partner and will bring you more business based upon their clients experience.

Now that you have gone through segmenting your referral sources and clients, the next step is to develop service and activity models by segment. The next segmentation article will address the development of service models.

SEGMENTATION – RATING AND RANKING

The segmentation process rates and ranks clients and referral sources based upon positive characteristics associated with them and then places them into a category determined by the number of characteristics met; the categories could be defined as A, B, C and D, with A being your best.

So what are the ten steps you should complete to segment your clients and referral sources?

1. QUALIFY

• You know who they are…the clients and referral sources you like and why

2. QUANTIFY

• Verify that those you have qualified as your best really are
• Generate reports that contain:
  • Clients: timeliness and quality of data submitted, pleasant, profitability
  • Referral Sources: proposal requests, quality leads, sold plans, existing clients, joint meetings

3. IDENTIFY POSITIVE CHARACTERISTICS

• List out common positive characteristics
  • Clients: accurate data submitted on a timely basis, easy to work with, profitable…
  • Referral Sources: Retirement plan acumen, respectful of your firm and time, consider you a partner….

4. DEVELOP A RANKING SYSTEM

• Assign a minimum number of positive characteristics needed to “qualify” for a level (Example: 4 to be an A, 3 to be a B, 2 to be a C and 1 to be a D)

5. RATING

• Review your clients and referral sources; list their positive characteristics
• Place them into a category based upon their number of positive characteristics

6. SYSTEMS

• Incorporate methodology in your contact management system(s) to track segmentation levels

7. DOCUMENTATION

• Document your ranking and rating system

8. TRAINING

• Everyone at your firm will need to be trained on the reason for segmentation, how it was accomplished, how they will be able to identify client and referral source segmentation level and what their role is with regard to service and activity expectations based upon the segmentation level

9. COMMUNICATIONS

• Clients and referral sources do not need to know what level they have been assigned
• You should however clearly communicate the level of service they can expect from your firm

10. MONITOR

• Clients and referral sources change so monitor and update segmentation levels accordingly

LAURA S MOSKWA CONSULTING