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Practice Management > Building Your Business

Building Processes and Procedures, Part III: CRM and Client Segmentation

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This is the third consecutive post in a series on developing business processes.

In Part 1, I wrote about the importance of building processes and procedures to build your advisory firm, and presented five steps for doing so. In Part 2, I presented the first step in implementing processes and procedures: creating a comprehensive list of each key process.

In Part 3, beginning with the topic of Business Analysis, I'd like to bring you up to date on my CRM (customer relationship management software) decision. In the past few months, I explained why I was going to subscribe to This was an almost certain decision until it took an unusual turn. Here's what prompted the change of direction.

I had signed up for a 30-day free trial with SalesForce. I was about to pay a third party $600 to migrate our ACT data to the new platform, but decided to do it ourselves. With the data in place, and less than a week left on the free trial, we learned that we were mistakenly on an inferior version and not on SalesForce’s Wealth Management platform to which we intended to subscribe. When we asked for an additional 15-day free trial on the correct platform, we were told no, since we had already used a 30-day trial. My mind was made up at that time that SF was not in our future!

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I then began to consider other CMS systems and choose Redtail. Among my reasons for doing so:

  • Redtail will manage the data migration from ACT (for free)
  • its training is free
  • It only serves the financial services industry,
  • the subscription cost is much less than Salesforce ($65 per month for up to 15 users versus $125 per month per user).
  • Redtail also integrates with my custodian, TradePMR
  •  and it appears to be much easier to learn.

Perhaps Salesforce is more robust, but I think Redtail will be quite adequate.

  • Another item on the agenda is Client Segmentation. In other words, dividing my clientele into appropriate categories. There are a number of ways to approach this. Here's my process:
  • Determine the total expected revenue from each client.
  • Determine the amount of revenue attributed to each client from referrals.
  • Add steps one and two.
  • Rank each client from highest to lowest revenue.

With this information, I can decide which services to include with each segment. Knowing what percentage of the total annual revenue that is attributable to each client will also help me to focus on the most profitable clients. Moreover, by logging the time spent with each client throughout the year I can evaluate if I am spending my time wisely and if my fees are adequate.

Any thoughts or suggestions?

Thanks for reading and have a great week!