7 Steps to Segment Your Book...and Boost Revenue
Decide What Criteria to Use
Decide on Cutoff Point for Top Group
Define the Second Group
Define the Third and Fourth Tiers
Determine Return on Assets for Each Segment
1. Determine your practices overall ROA (the revenue you generated divided by your AUM).
2. Add up the AUM in each of your client segments.
3. Multiply AUM figures in each segment by your practices overall ROA.
4. Divide that number by the number of clients in each segment. This tells you how much each client generates a year on average.
Align Service Level with Each Segments Return on Assets
Separate the Wheat from the Chaff
1. Assign bottom-tier clients to a junior associate. This strategy is common, but has a big drawback. If you couldnt turn this into a top-tier relationship, theres a good chance they wont either.
Separate the Wheat from the Chaff (cond)
3. Have them re-assigned by your manager.
Separate the Wheat from the Chaff (cond)
5. Meet with the clients and explain the changes you have made to your practice and give them an opportunity to meet the standards you set to move up into another tier.