Changing the fundamental way you view your clients can be the key to boosting your business and breaking your business plateau. The Financial Planning Association (FPA) Business Solutions 2011 Conference, held March 3-5 in Boston, provided a number of tips for advisors who want to perk up their business. The strategies laid out at the conference centered on the common themes of segmenting a book of business and creating an ideal client profile.
Client segmentation–classifying clients based on how close they conform to your “ideal client”—“is one of the top priorities to driving profitability,” said TD Ameritrade Institutional’s director of product management, Mike Watson. Watson believes that creating a focused service model permits advisors to offer a narrower range of services, thus allowing them to better manage their time and ensure clients’ needs and expectations are met.
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While client segmentation can be based on quantitative data, don’t take any shortcuts. Segmentation based merely on outward appearances can skew your client pool away from the ideal. For instance, if you have a client who is otherwise an ideal client, but who requires an extraordinary amount of attention or is generally difficult to interact with, you may be unable to provide satisfactory services to the client and may be losing valuable time and money.
Surrounding factors also must be taken into consideration. A small business owner of a hair salon who does business in a wealthy neighborhood may be more of an ideal client than a client who owns a large-scale business. For example, the value of potential referrals from
the salon owner may outweigh the value of the client who has a large, booming business, but is not a great referral source.
Ideal Client Profiles