Now before Ken begins looking at forming a team to both attract and retain a more sophisticated clientele, he needs to do a little housecleaning. If the underlying structure of the business can be best described as “controlled chaos”, it makes no sense at this point to bring in a team member, because the business will simply chew them up. Over the next four episodes we are going to walk you through a very systematic process to:
The foundational underpinnings of any mature practice are a comprehensive and highly systematized wealth management and client service platform. In the next four articles we will focus on the client service component because it is currently Ken's greatest challenge.
The first step in strengthening your business foundation is to segment your business both quantitatively and qualitatively.
The key to successful client segmentation is to factor in both quantitative and qualitative elements, which exist in every business relationship. Though revenue will always be a critical component in determining the value of a client, we should not overlook the qualitative impact of factors such as referrals, attitude and future growth potential.
Not all relationships are created equal. Some people in your life take way too much time (relative to the value received), suck the energy right out of you, crush your attitude and deflate your team's spirit. Others leave you feeling energized, excited and positive, and your only regret is that you don't have more time to spend with them. Think of building a business in which you are surrounded by the latter. How much more “productive” would you be? What is the price you pay (not to mention the price your family, friends and team pay) when you surround yourself with the former?
1. Determine what characteristics would collectively define your ideal client.
2. Assign a numerical range that reflects performance (we use 1-3).
3. As a team, rate each client within your practice on each of your characteristics.
4. Do the math to determine each client's individual score.
5. Add up your individual scores and divide by the number of clients to determine your “average book score.”
Using our model of five criteria and a three-point scoring system, you would have a range of 5-15 (with 5 being a client from the netherworld and 15 being optimal). Here's the epiphany:
Not all businesses are created equally. You could have two businesses, each generating $2 million in revenue: one with the “level of difficulty” that would put you in an early grave and the other with a “level of difficulty” that would fulfill your wildest dreams. This process gives you a baseline from which to begin to build the latter.
Revenue does not happen in a vacuum. Working with particular clients, in a particular way, with a particular team generates it. Here are a few questions to ask yourself and your team:
In future articles, we will review the additional steps necessary to enhance your client relationships, dramatically upgrade your service levels and leverage this new foundation to attract more platinum level clients.
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