How To Create and Use a Segmented Client Database Like a Pro
Segmented client databases are essential for advisors who want to produce powerful, intentional marketing campaigns, and there are seemingly endless ways to customize and leverage this tool to your advantage. In this month’s blog, you’ll learn how to use a segmented client database like a pro.
Methods for Segmenting
Database segmentation is all about sorting clients based on specific qualities. This process makes it easy to use the data in your marketing efforts and general operations. It’s a valuable tool for any industry, but it’s vital for financial advisors, given the personal nature of your work. Here are a few ways you can segment your clients:
Many of our clients use a value-centric structure based on profitability. For example, clients who are the most profitable to your firm, either because of the revenue they generate or the amount of assets under management, are given an “A” label. The firm identifies their quantifiable definition of an “A” client, then continues this method with “B” clients, “C” clients, and so on.
That said, a client’s segmentation value doesn’t have to be determined solely by the income they generate directly. If they’re a referral powerhouse, consider bumping them up a notch, as they could be just as valuable to your practice as some of your higher-net-worth clients.
Regardless of how you define their value, if a client is extremely important to your practice, they should be in a top-tier category. The goal is to create a system that allows you to easily recognize your best clients so you can identify the kind of people you want more of in your firm and who to spend the most time and effort on.
Another way to segment clients is by type, where you sort clients according to what you do for them, what stage of life they’re in, where they are in the sales process, or another category (or all of the above).
Type segmenting can include categories such as:
- Retirement planning
- Investment management
- Special needs planning
- Life insurance
- Education planning
- Second-generation client
This method is incredibly useful for touchpoints and information campaigns. For example, if you’re sending educational content, you can easily sort clients by “special needs planning,” “retirement planning,” and so on to ensure you’re sending the most helpful, relevant information to each client.
4 Reasons To Use a Segmented Client Database
While it takes a lot of time to fully segment your client database, once you’ve done it, it’s relatively easy to maintain, and it becomes an incredible tool for you to use in your marketing and relationship-building efforts. If you’re on the fence about whether to embark on this tedious process, here are a few things to think about:
- Send Targeted Marketing Messages
Like we mentioned above, segmenting your database by service is a great place to start because it enables you to send highly relevant information to your clients. If you want to start writing a monthly blog, you can tailor the content to different client segments based on their needs. For example, you could put together a blog about where to retire or top travel destinations for retirees, publish it on your website, and then create an email campaign only for clients in or nearing retirement.
This helps clients see that you have your finger on the pulse of what matters to them as individuals. It also helps you avoid sending clients irrelevant information. For example, you probably don’t want to send resources for special needs planning to a client who hired you solely for your expertise in retirement planning. If you send this type of blanket message in an email, you risk appearing lazy or like you don’t truly understand your clients’ needs.
Of course, there is a way to send “bonus information” strategically and encourage clients to do more business with you. For example, if you send information about retirement planning to a client focused on their child’s education, you might plant a seed and get them thinking about their own future.
- Harvest the Low-Hanging Fruit
Depending on how you run your practice, it’s likely that not all your clients start with full-fledged financial planning. Some might just want life insurance or help with their 401(k). Clients like this may start in your “C” category, but you can potentially bump them up to a “B” or even an “A” by nurturing the relationship and reaching out to them when you know they could benefit from another service.
C-level clients often fall by the wayside because they don’t bring in as much revenue as other clients, but when you show that you care (despite their lower-level engagement), you’ll build trust and loyalty. Then, when they need help planning for retirement or managing their investments, you’ll be the one they call because they’ll know you genuinely care about their wellbeing.
Reaching out to lower-level clients is also a great strategy for new advisors. Have your new recruits start cultivating relationships with your C-level clients with the goal of converting them to A- and B-level clients. This is an incredible opportunity to give your young advisors a list of warm leads while also generating more revenue for your firm.
- Streamline Your Gifting Strategy
Sending gifts is a great way to wow clients and show them you care, but it needs to be done strategically. Obviously, it’s not practical to send an expensive gift to every client of your firm, so you want to choose the right gifts for each client segment—and you can’t do this effectively without a segmented database.
Once your clients are divided into As, Bs, Cs, and so on, you can choose gifts that are appropriate for each level. If you send a Christmas gift, for example, you might send a nice bottle of wine, a fresh balsam wreath, and a card to all your A clients; just a wreath or bottle of wine and a card to your B clients; and just a card to your C clients.
That way, you can send everyone a thoughtful gesture, and you can really impress the clients who mean the most to your practice.
- Save Your Brain
Client segmentation will also save your brain power for other pursuits. When you have a fully segmented database, you don’t have to remember which clients to send a Christmas gift to, who you should invite to an event, or who’s interested in planning for college. Instead, all that information is right at your fingertips (i.e., in your CRM).
Make It Happen
If you want to take your relationship marketing to the next level, segmenting your client database is a great place to start. You can have an assistant tackle the project initially, but generally, advisors know their clients best, so consider setting aside time each month to make it happen (or at the very least, add some personal notes for your team members to leverage).
Once your database is fully sorted, decide how you’re going to keep up with it. You could categorize each client after their first meeting or annual review, assign a team member to update it monthly, or make it part of your annual marketing strategy (although we recommend one of the more frequent methods, so the task doesn’t become too daunting).
If your database is ready to go and you want to take advantage of focused marketing opportunities, let us know! We can help you brainstorm powerful strategies and plan specific initiatives that help you strengthen relationships and increase referrals.