Client Segmentation

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Thanks to PlanPlus and WEA for sharing their material for this Best Practices Guide.

Segmenting your client base can be a useful tool to help define the services you’ll provide and the communications you’ll undertake with your clients.

Some advisors may be concerned that segmenting your clients means you will be providing lower levels of service to some clients, but the intent is quite the opposite. Unless you provide levels of service for clients consistent with the fees or income you generate, it means your business would be over-charging some clients to pay for the service to others.

Here’s one example of a method of doing market segmentation. Feel free to use as is or modify to suit your situation.

Scoring methodology – The first step is to develop a scoring method using criteria that can be applied consistently across all your clients. The scoring can then be tallied to identify each client’s segmentation group.

Transactional business profile – What existing assets does you client have in place with you at the present time:

Points Invested Assets
40 Greater than $2 million
35 Greater than $1 million
20 Greater than $500K
12 Greater than $250K
4 Greater than $100K
2 Less then $100K


Points Insurance
20 Three products
16 Two products
10 One product
0 No product

Time commitment – The amount of time spent servicing the client, including time to market to them and time spent one on one. How well do they grasp concepts and understand where you are going with their plan, how well prepared for meetings are they?

Points Time Commitment
10 Minimal time commitment (easy to serve)
5 Appropriate time commitment (given their situation)
0 Too much time (have to spend more time than should be necessary)


Potential – What is the potential for this client converting to fee-based service or gathering more assets and/or insurance business, etc.?

Points Potential
10 Significant
5 Some
0 None

Referrals – How many referrals has the client provided to you so far and/or how many do you feel they may provide in the future.

Points Referrals
10 Many
5 Some
0 None

Client compatibility – How comfortable are you with this client and how agreeable are they when it comes to implementation of your advice and recommendations.

Points Client Compatibility
10 Great client
5 Acceptable
0 Disagreeable

Client segmentation based on scoring – Using the factors identified above, tally your client’s score and identify their segmentation category.

Points Segmentation Category
80 - 100 “A” client
60 – 79 “B” client
40 – 59 “C” client
20 – 39 “D” client
<20 “E” client

Communications based on segmentation - Once you have identified each segmentation categories for all of your clients, you then have to define the communications and other activities that will be delivered. Here’s an example of some typical activities that can be built into your communication schedule:

Marketing and “Client Touch” Activities
Description “A” Client “B” Client “C” Client “D” Client “E” Client
Christmas card Y Y N N N
E-newsletter 4 4 4 4 4
Volatile market phone call Y Y N N N
Birthday card Y Y N N N
Client appreciation event 1 1 N N N
How are you? call 1 1 N N N
Business development workshop 2 1 1 1 N


Services and Activities
Description “A” Client “B” Client “C” Client “D” Client “E” Client
Plan review Y Y By request By request By request
Portfolio review 2 1 1 By mail only By mail only
Quality assurance survey Y Y Y N N


Obviously, managing each of these activities for a significant client base requires a well organized practice that has in place some type of CRM (client relationship management) system. Such systems often have automation features that let you schedule, track, and implement these various activities. Also, the actual frequency of events will be driven by your engagement agreement, particularly in cases where the client is fee-based and has contracted for a certain level of service.

Communication and “client touch”

When you combine face-to-face meetings, phone calls, mailing pieces, and client events like workshops and appreciation dinners, you end up with many client “touches” throughout the year.

Using these various methods means that it’s not necessary that you personally do everything. Many of these activities can be initiated and managed by an assistant. However, the client’s perception will be that they have a relationship with you, their advisor, which is strong due to excellent communication and regular contact.

Languages: Сегментиране на клиентите (bg) | 客户细分 (ch) | Segmentation de client (fr) | Ügyfélszegmentáció (hu) | Segmentazione della clientela (it) | Klant segmentatie (nl) | Segmentacion de cliente (sp)
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