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The Benefits of Analyzing Your Client Base

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Analyze Your Client Base

Advisors know a lot about their clients on an individual basis. Their assets, history, needs and wants, are normally well understood in order for the advisor to provide the best possible advice. However, many advisors still do not know how the entirety of their client base breaks down by segment. For example, every advisor should readily know how many clients they have by category brackets such as age, income, net worth, gender, geography, occupation, child count just to name a few.

There are many reasons from a marketing perspective to know this.

First, by analyzing your client base you may uncover a niche you never knew you had. For example, several years ago I was working with an advisor who was going through this exercise and this 20-year veteran was unaware that 30% of his clients were educators. Like most advisors, he grew by referral and not by specific outbound marketing efforts, so this segment being such a high percentage was a surprise to him. He liked having educators as clients and he wondered what he could do proactively to get more educator clients.

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Second, by reflecting on what segments are significant for your client base, you can begin to examine what is it about you or your business that is attractive to this segment. Do you have a lot of widows? Are there many architects among your clientele?  Why is this? By researching this and speaking with your clients you may find a new value proposition that your clients appreciate that you were not aware of.

Third, the most important reason to understand your client segments is to deliver an even better service to these segments. Take for example widows as a client group. Widows have very specific financial and emotional needs, and by realizing you have a segment comprised of widows, you may want to invest in learning more and providing more support to this group.

For some advisors after reviewing your client base, it may be that there are no substantive groups that are representative, and you have no discernible segments. If you are in this group, it may be time to consider creating a niche to focus on. Much has been written for advisors on why and how to focus on niches, but it always bears repeating. When you have a niche, you become more expert to that group and offer a better service. Members of that group will seek you out and the momentum will feed upon itself. The very first step is to see how your current client base breaks down.

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