From the November 2016 issue of Investment Advisor.
It is common for advisors to have a client segmentation strategy, offering services that address clients’ specific needs based on their occupation, net worth or family situation. Do you take the same approach with how you offer your technology services? Too often, we simply provide the same technology platform to every client. This is a missed opportunity if your technology investments do not realize their fullest potential.
It is not hard to create a technology segmentation strategy, but it does require some thought. You need to evaluate not only the technology you can deploy, but also the types of clients you have now and the type you want to have in the future.
If you already have a client segmentation strategy, a first step is to add various technology solutions to the existing segmentation categories. Initially, you might think that all clients need performance reporting, financial planning and account aggregation. However, you could be overlooking opportunities to offer differentiated services within the technology solutions directly. For example, you could offer a more detailed reporting and reconciled account aggregation tool for certain segments of your client base. In addition, maybe you are willing to customize some of your technology to meet specific client needs within a segment.
You might expect that clients in each segment have different technology needs, and that these needs would directly influence why a particular client uses more or less of your technology solutions. It might be a red flag if a client placed in your “high value” segment isn’t using the tools offered by your firm. Technology segmentation can play a role as you target new client groups and their specific technology needs, too. Be ready for movement to occur between your technology segmentation groups. This will certainly happen, so it is important that it is an “additive” experience versus a complete change for the client. You want the experience to be like upgrading to the next iPhone — generally it is relatively easy to move your old data to the new device.