At some point in your career, if you’ve been doing things right, you will run out of time. Did you catch that? You can actually run “out” of time by doing all the right things. These are things we all focus on daily – marketing, referral generation, asset gathering, running a business, etc. While many of us are very good at doing these things, and doing them the “right” way, we eventually run into a problem: We’ve had success, we’ve brought on many new clients. Now, there are so many families that we serve, that delivering the same level of service to each of them becomes impossible, and actually is something you shouldn’t be doing.
Now there is a big difference between “treating people right” and “doing the right thing” versus delivering the same level of service for everyone. You can deliver a different client experience or service model for every one of your clients and still treat them right, and do the right thing for them. The problem (or opportunity as I see it) is that you cannot afford to deliver the same client experience everyone. Your A clients and some B clients need to be treated to a first class client experience. It will be impossible and not even close to economical to deliver that same experience to ALL clients.
The first thing you need to do is figure out where your clients stand from a revenue standpoint. Run a report of every household you work with and determine what the annual” revenue from each household is worth. For advisors using commissionable products as part of a financial plan, you need to assess what theup front commission is worth on an annual basis. The easy way to look at it is to divide the commission by a number of years and “amortize” it out. For instance, if your client holds an annuity with a 10 year surrender charge, and you earned a $30,000 commission on the placement, you could stretch that out over 10 years and figure that it is worth $3,000 of annual revenue to your firm. However you do it, remain consistent for all households in how you assess their annual worth.
Once you have all of the households and revenue numbers figured out, organize them from the top down, with the client that generates the most annual revenue at the top. From there, you need to divide the book of business into four chunks like this:
A – Top 20% of revenue
B – Next 30% of revenue
C – Next 30% of revenue
D – Bottom 20% of revenue
You then need to assign each revenue chunk with a label. To keep it easy, I’ll go with A, B, C, and D (as seen above). This exercise alone will be quite eye opening. I actually go through this process regularly with successful advisors across the country, and put the analysis together for them. The first time they see how many clients make up these different revenue chunks, they are shocked. The 80/20 rule holds true in so many things, especially this.
Next, you will want to go through and “upgrade” a few of your clients to first class. Here’s what I mean by that: Say there are a few C or D clients that you have worked with for years. They don’t represent much revenue themselves, but maybe they continue to send you a number of quality referrals every year. That person, in my opinion, has just upgraded themselves to first class and need to be treated like an A client. Also, that means there could be a couple of A or B clients who represent great revenue to the firm, but you cannot stand them. You wouldn’t want to clone them, and you avoid ever having them around your most special clients. Those might need to get “downgraded.” Either way, go through the process of assigning a true label to every client in your book.
Now you need to create a different client experience and service model for each segment. The A and most B clients should have the most elevated client experience possible. Here is an example of how it could look:
“A” Clients – Quarterly review meetings, annual charitable giving meeting, joint meetings with a tax and/or estate planning professional, private social lunch 2x per year, inclusion in partnership program, invitations to ongoing intimate social events, preferred parking at office, invitation to annual client appreciation event, etc.
“B” Clients – Bi-annual review meetings, annual charitable giving meeting, oint meeting with a tax professional, private social lunch 1x per year, inclusion in partnership program, invitations to ongoing intimate social events, invitation to annual client appreciation event, etc.
“C” Clients – Annual review meetings, 15-minute phone call with a tax professional, invitations to in-office lunch-n-learn events, invitation to annual client appreciation event, etc.
“D” Clients – Annual review meetings, invitations to in-office lunch-n-learn events, invitation to annual client appreciation event, etc.
It is not uncommon for advisors to ask a junior or associate advisor to handle the delivery of the client experience to C and D clients. Bottom line is this, YOU, the rainmaker, cannot afford to overspend your time with those clients. Take good care of them, treat them well, but spend more time with the A’s and B’s. Make their experience first class and try to attract more families just like them.