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 growth potential.

The majority of advisors segment their books quantitatively, by assets and/or production levels. This gives only a partial answer to the quality and impact of any given relationship in your practice.

Thus, segment your book both quantitatively and qualitatively, using five variables (on a scale of 1 to 3):

  1. Current revenue
  2. Potential revenue
  3. Center of influence
  4. Relationship quality
  5. Time consumption

Please review the Client Engagement Toolkit for more information.