Using revenue data to segment your client base

By May 13, 2015 No Comments

Preparation towards the implementation of RDR legislation is a factor in many financial planning practices currently thinking along the lines of re-evaluating efficiency and profitability. To that end, proper analysis of revenue information offers valuable insight to inform a client segmentation exercise, assuming you have:

  • A robust segmentation strategy, which you could look to a good consultant to assist with for fresh perspective and objectivity
  • 12 months’ worth of revenue statements from all your providers, which you’d need to consolidate to a common format
  • A unique identifier, such as an ID number, for each client (and/or each client group), which can be used to tie together information about the same client across multiple product provider data sets
  • selected CRM and financial data to overlap, as required to inform your segmentation strategy

What you can expect to be able to glean from revenue data

Even if you don’t overlay your revenue data with other demographic information, you can still expect to come away with something pretty functional and decidedly more scientific than a subjective A, B or C rating.

  • Total revenue earned, per client (and/or client groups), across all revenue types, contracts and providers
  • Total ongoing revenue per income recipient
  • Spread across revenue types, categories and sources
  • Risks and opportunities lurking in your client database

Pulling all of this together can be an enormously taxing job, though, and outsourcing it may well be a quicker and more efficient approach. Talk to us at Linktank if you’d like to explore that option. Definitely also complete an RDR Reality Check questionnaire to measure your firm’s readiness.