What do clients really want? Probably the all time favourite topic for financial service providers. Just like any consumer-focused industry, the financial advice industry can benefit from better understanding client needs and wants.
To this end, segmentation of your client list or more aptly, segmenting the clients you want to acquire, can be used in a way to differentiate some clients from others resulting in increased efficiency, adding value to your client service and ultimately increasing both client retention and client referral rates. Below is an example of a client segmentation strategy as outlined by AIA Australia.
According to AIA Australia, insurance advice seekers are divided into three different groups with distinct needs:
1) Value Seekers - Value Seekers represent the most clients. They expect the service they receive from financial advisers to outweigh the fees they pay. Additionally, they require high quality communications from advisers to amplify their value perception.
- 2) Personalised Advice Seekers - Personalised Advice Seekers are a smaller group, who are after advice that is specifically tailored to their needs.
3) Purists - Purists are the smallest group of all three. They want tailored advice, which also needs to be independent and ethical.
Meeting the needs of these three different types of clients provides numerous benefits. Client loyalty can increase, customers will be more likely to recommend their advisers to others and advisers can produce more tangible outcomes. An increase in revenue is most likely to occur when advisers meet the needs of Value Seekers and Purists.
How to correctly segment the clients can be a challenge. Obviously, through conversations with clients, advisers are able to get a feel for the type of client a particular individual may be. Even if you have no segmentation strategy in place you probably do some sort of segmenting of your clients subconsciously already! As always, including such things definitively in your processes can assist with benchmarking and in providing a smooth and efficient level of service to your clients, wherever they may fit. These processes can be embedded across your planning practice, so whilst your para-planners or other office managers may not know your customers as intimately as you do, they can at least get a grasp of what type of person they are from an advice point of view.
Gaining a better understanding of your clients is the name of the game. If you haven’t already considered it, moving away from a “one size fits all” strategy and taking a look at segmenting your clients needs may help to avoid missing out on delivering what really matters most to them.