Posts Tagged 'Middle Career'

Client Segmentation & The Service Matrix


You’ve heard it  – Segment your client base!  But do you know why?

First there is the 80-20 rule: 80% of your revenues come from 20% of your clients.

So the first step is to determine who those 20% are.  These are your top clients.

In our firm, we use an “old school” naming convention – A, B, C, D & F – just like in grade school.

Others may use Gold, Silver, Bronze, etc.

Consider using a bell curve methodology.

Client A – 3%

Client B – 13%

Client C – 68%

Client D – 13%

Client F – 3%

But what is the point?  Why is this useful business information?

First, you may want to know which clients are profitable and which clients are not.

Clearly your A-client will be very profitable; your F-client may not!  You could actually be losing money on the F-clients.

We used to say that an F-client is your most profitable client until you do ANYTHING for them, then they quickly become your biggest money trap.

Can you really afford not to know this information?

Now consider this.  You have an A-client that pays you a fee of $10,000 per year and an F-client who pays you $500 per year.

You know the F client is costing your firm money.

How do you think saying this out loud would sound? “Dear A-client, thank you very much for paying me so much money that because of your subsidy, I was able to retain some clients that are not profitable and your service suffered because of it.”

Does that hit you in the gut?

How do you deal with this problem other than firing all your small clients?

The answer comes in the form of a service matrix.  You cannot deliver the same level of service to all your clients.

A-clients deserve the highest level of service, then B-clients and so on down to F-clients who, perhaps, should get the legal minimums.

The service matrix needs to be communicated throughout your entire organization no matter how big or small.

This needs to be a written matrix so that everyone is clear as to what should and should not be provided and why.

Develop rules, policies and guidelines that reinforce your matrix.

Practice what you preach.

If certain clients expect a higher level of service, they need to pay accordingly.

It will allow you to focus your efforts where they need to be focused and your staff’s efforts where they need to be focused.

If it helps, find someone who will hold YOU accountable to keep to the system.

This is a fair system.  Fair to you and fair to your clients.

Thank you and Happy Holidays to all.

Guide – Client segmentation is a valuable business tool that can be used to develop your service matrix.

Action item – Segment your clients with clearly defined profitability measures. Work with your staff to develop a well thought out service matrix to match.

© 2009 The Advisors Center, LLC – All Rights Reserved

Don’t Talk! or Please Listen?

Most advisors spend too much time talking and not enough time listening?

True or False?

Of course the answer is… It depends.

Some recent examples I have experienced:

I was teaching a workshop of 16 advisors and one young man did not find it necessary to listen but found it acceptable to chat throughout the entire workshop to his friend. I am thinking that this was not a worthwhile meeting for him because he certainly did not listen to what I had to say. It would lead me to believe that this same advisor has a hard time listening to his clients or prospects. He wondered why he wasn’t closing!

I met a recently widowed woman who came in with a trusted friend. I asked “How can I help”? She then spent the next two meetings telling me her story, how the other advisors told her what to do and what she needed. At the end of the second meeting I asked if she would like to be a client and she said “Yes, because you listened”.

Now without citing lots of statistics, we know that most people like to talk about themselves and do not like to listen to stories about others. I would suggest that advisors who spend the time to listen will develop deeper and more meaningful relationships with their clients and prospects.

A deeper relationship will mean more loyalty. More loyalty means better retention and better retention leads to higher profitability.

Think of it this way, how would you feel if the doctor gave you the prescription without listening to you first?

Guide – Allow people to tell their story and how you can help them. If you ask them, they will usually tell you if you let them.

Action item – Try to spend much more time being an active listener. Really pay attention and take notes. Let them know you are listening and most importantly, don’t interrupt – It’s rude.

© 2009 The Advisors Center, LLC – All Rights Reserved

Are you clients having a great experience?


As I was searching for my topic this week, my wife, Kathy, reminded me of the awful experience we are going through with our own local community bank.

Let me share my client? (or just a customer?) experience.

We wrote a check from our home equity line of credit (HELOC) for a planned purchase.

The first letter arrived and asked us if we were having trouble paying our bills because our home equity payment was late.

We had just sent in many thousands of dollars.

Ok, fine….

The second letter arrived and said that our loan was due in full.

Ok, fine….

I called my “personal banker” who very nicely informed me that our line HELOC had expired.

She let me know that they had honored our draw-down even though “they were not supposed to” and informed me that the loan needed to be re-written.

My personal banker delivered the paperwork to be completed but it was all blank.

Ok, fine….

Two days later, my “business banker” from the same bank called to introduce himself as my new business banker.

He is called to TELL me that I needed to refile my annual paperwork for my business line of credit.

He faxed over the cover letter of requirements and a blank (fax of a fax of a fax) form for me to complete.

Ok, fine…

We submitted everything (I was just slightly peeved) and they called to schedule a closing.

I requested that we have the meeting at my office and they agreed to meet in two weeks. Two days before the appointment, there was a message on my HOME answering machine informing me that they would be late.

Ok, fine….

Both loans were underwritten and approved. We had a closing that lasted about 10 minutes and they were all smiles as they went on their way.

I requested a copy of the appraisal for review which they promptly faxed over. Turns out I live in a 2 story home with 2.5 baths. (Neither was accurate!)

Ok, fine….

The following week we made a very substantial payment towards our HELOC and back in the mail came a loan statement.

On the statement was a handwritten note: “this is the wrong acct#”

Ok, fine….

So my spouse said “If we ran our business like this we would be out of business.  I would like a new bank please.”

Here is my summary of what should have happened in my humble opinion (Of course I assumed we were a valuable client of this bank):

  • A call letting us know our HELOC was expiring and needed to be re-written.
  • A completed set of populated forms arrive for our signature.
  • A call updating us on the process as we went through it.
  • A call to our office to reschedule or at least ask if it was ok if they were going to be late.
  • A call letting us know our account number would be changing or has changed.

Don’t treat YOUR client like we were treated.

  • Communicate the process – Even it is negative (your mistake OR theirs).
  • Remember to say please and thank you.
  • Remember that they are the client and you want their business.
  • Provide an extraordinary experience and they will be loyal advocates for years to come.




Guide – Client service is about the experience and not just the result.

Action Item – Make sure your clients are getting an experience better than they expect. This will make them advocates, not just customers.

© 2009 The Advisors Center, LLC – All Rights Reserved


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Newsletter – Should I??


Is the newsletter a staple worth preserving or is it a throwback to a bygone era?

Well I think the answer is, “it depends.”  But mostly, Yes!

Webster’s defines a newsletter as “a small publication (as a leaflet or newspaper) containing news of interest chiefly to a special group.”

Who is the audience for your newsletter? That’s easy: your top clients, centers of influence and best prospects.

How should you deliver it? Emailed as a PDF or printed in 2 colors and mailed.

The best content? Simple—as in easily skimmed, with light content encouraging a follow-up call from the recipient.

What is the mission/purpose of the content?  To showcase your expertise on timely topics of discussion that would appeal to a broad swath of your target audience.

And does it matter? Absolutely!  Remember that most clients leave due to a lack of contact—newsletters automatically add to the number of client “touches” in a given year.

What about the alternatives like blogs, Twitter, Facebook and LinkedIn? Although blogging could replace one article on a more regular basis, most people want “old fashion” delivery methods–paper or email, and they want it pushed at them. They do not want to have to go out and get it or “opt-in.”

The best way to create a newsletter? There are many options and all can be acceptable. In general: In-house, written by you or someone in your firm or it can be Outsourced through an industry vendor. The important part, however, is that it has a customized masthead that matches the look and feel of your letterhead and other firm literature.

Costs – Should run about $1 per issue.

Benefit – More communication will aid retention and solidify your reputation as a resource expert for clients, prospects and centers-of-influence.

Guide – A newsletter is a great way to communicate with clients and prospects who like that channel of communication.

Action Item – I recommend you contract with a vendor who can create a custom masthead newsletter with ghostwritten content.

© 2009 The Advisors Center, LLC – All Rights Reserved

Please leave comments to share with others by clicking the comment link below the title of this article.

The Vendor Event


So you’re doing business with these folks all year long, right?

Which folks, you ask?  Why ,  your vendors of course!

These people provide you with ALL of the products and services you  use and may also offer to your clients.

I would suggest that these vendor relationships are extraordinary, intimate and valuable.

And yes, I did say intimate. 

How well do your vendors really know you? I bet quite well. You have leaned on them and they have leaned on you.  And after all, isn’t that what relationships are all about?

In many cases you would be lost without them. And consider this: some  may  even  be  “ideal” clients!  Many might even refer a prospect–or at least be capable of it!

This  team of professionals that service you and your business represent a wonderful opportunity.

The Vendor Dinner

Each year, my wife and I look at our list of vendors and ask a simple, yet very important question: “In the past year, who are the top 8 individuals that have ADDED THE MOST VALUE to our business?”

Usually the answer is obvious, and many individuals make the list year-after-year.

Once we have established the list, we invite each individual to a  group  dinner on us, complete with a private room, open bar, an excellent meal (appropriate to the times, this year our vendors requested a nice burger place!) and great conversation.

We let them know with a grand toast that we are successful because of their help and assistance.

They definitely feel appreciated!

This has been going on now for 12 years and has certainly been worth it.

Many have become clients, most have become friends, and several have referred prospects–and all have taken great care of us whenever we’ve needed it!

We are just beginning to think about next year’s event, which will take place as it always does in February.

So consider thanking them in a tangible and special manner. 

This has arguably been the most successful event we hold each year, and it is always a lot of fun!

Guide – Thanking people for their help and loyalty goes both ways.

Action Item – Plan a Vendor dinner for some of your most valuable relationships.

© 2009 The Advisors Center, LLC – All Rights Reserved

Please leave comments to share with others by clicking the comment link below the title of this article.

Client Scheduling – Should you or they?

Under normal conditions, your best sources of revenue are your existing clients.  So my query for this week is:  how often should you schedule a meeting with clients AND who should initiate the contact?

Many advisors wait for the phone to ring because they are unorganized, afraid, too busy or just don’t care when the next client meeting is.  But a funny thing happens when you meet with a client: they actually need you to do something for them that involves you getting paid and them becoming more satisfied!

Imagine this –Every time you make contact with a client, it generates revenue.  Now for some, this will mean retention of existing revenue (you don’t want to lose this) and for others it will mean an engagement that generates new revenue.

Sooo… waiting for the phone to ring is costing you money.  You MUST have a system that brings your clients to you on a regular basis.  The system we know best is the one used by most dentists.  People do not generally like to visit their dentist and the dentist knows this.  Therefore, the staff is instructed and trained to book the next 6 month appointment before the patient even leaves the office.  How amazing is that!

Work within your firm to create a methodology that keeps you in front of your customers and clients on a VERY regular and systematic basis.  For you, it will preserve existing revenue and generate new income.  For your clients it will help provide the care they need and deserve.

Guide – You need to schedule appointments with your clients; do not wait for them to schedule with you.

Action Item – Develop a system for booking the next appointment with your clients – It will pay off!

© 2009 The Advisors Center, LLC  – All Rights Reserved

Behave Like You Are Going To Be!

We have all heard the expression “Dress to Impress” or “Dress the Part”.   I want you to take this a step further. 

Behave like you are going to be, OR, Act now like you want people to think you are. 

In other words, you must have the appearance, the reports, the systems and begin accepting the NEW clients now that will take you to your goals.  Consider that prospects will hire you based on their perceptions of you.  What do they see?  Do they see the advisor you are now?  Do they see the advisor you want to be?

Start acting the part.  Dress for success.  Prospect ideal clients.  Install ideal systems.  Hire ideal staff.  Terminate staff that holds you back.  Freshen that brand.

Guide – Perception is reality.

Action Item – Upgrade SOMETHING within your practice to be what you want it to ultimately be.  Don’t scrimp!

Ideal Clients and prospects will notice and smile.

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