Here are 6 steps in how to segment your book of business. This how-to comes courtesy of regular Bank Investment Consultant contributor Todd Colbeck.

 1.      Recognizing the 20/80 effect

The “Pareto Principle” states that 20% of causes produce 80% of the effects. For example, 20% of your activities produce 80% of your results. The flip side is 80% of your problems also come from 20% of your activities. So you need to spend more time on the 20% tasks and less time on the 80% tasks. Try color coding your calendar and monitor how much time you spend on various activates.


2.      Squeaky Wheel Gets Removed

Identify the 20% of your clients that cause 80% of your problems. (These are the clients keeping you away from your most productive activities and are draining the production from your business.) I would recommend removing these clients by any means ethically possible. They are just not a good fit for you but may be a great fit for somebody else. If you don’t know how to remove them, talk to your manager.


3.      Looking at the Potential

Identify which clients have the greatest potential to transfer in more assets. I think the top tier of your segment should focus on clients with the greatest potential production, not necessarily the greatest current production. This should be roughly 20% of your clients.


4.      The Middle Group is the Biggest

You’ve now identified the bottom 20% and the top 20%. Much of the middle 60% will be your bread-and-butter clients who offer a good deal of your production. But there will also be some who don’t offer much production but you can’t remove because they’re friends or relatives of your best clients.


5.      Segmentation Complete

Now you have your top 20% that represent the biggest opportunities; the middle 60% that are the bread and butter of your business; and the bottom 20% causing 80% of your problems. Once you decide how to best deal with the bottom 20%, the remaining 80% need to be managed effectively. This is best accomplished through establishing a turnkey service model.


6.      Schedule Meetings Like a Doctor

I recommend having four meetings a year with your top-tier clients; two meetings a year with your bread-and-butter clients; and one meeting a year with clients who don’t have a lot of assets but are friends and relatives of your best clients. Set up a recurring appointment just like a doctor’s office. Don’t worry, clients like having you booked in advance as much as you like having them booked.

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