Client Classification: It Just Makes Sense

Well, this should be easy. If you’re a seasoned professional, you probably already know the answer, but keep reading, there’s more than what meets the eye. As for folks that are just starting out, here’s why classifying your clients, as you progress, is solid advice. The Pareto Principle doesn’t need an introduction, but we understand some of you may not be familiar, so here’s how that applies to your business. Typically, 80% of your revenue comes from the top 20% of your clients. What we often find is that professionals usually spend the majority of their business resources, both time and money, on the bottom 80% of their clients at the expense of the top 20%. How do we know this? With the help of one of our partners, Pareto Systems, they are one of the leading practice management firms in North America. It seems like coaching thousands of elite financial professionals and over 25 years in the business ought to provide some interesting insights or two.

Now, here’s what I want you to do. Run a scenario in your head where instead of spending 80% of your time on the bottom 80% of your clients, you’re spending 80% of your time with the top 20%. What do you see? Do you see yourself sipping margaritas on the beach? Well, you’ll definitely be able to, if you do this right. All jokes aside, spend your time optimizing and elevating the client experience, particularly with the top 20. Why? You ask? People tend to know and socialize with people just like themselves. Your top clients will begin to become advocates and make introductions to people just like them, and that’s when you begin to replicate your best clients—your ideal clients.

Client Classification is about creating a framework to effectively sort and organize your new and existing clients (for example: A, B, C or Platinum, Gold, Silver). We want to put you in control, and give you the opportunity to decide whom you are going to do business with and why. Client classification will drive the level of service that you provide to your clients. For example, your lower-level clients should not receive the same level of service as your best. Why? well, because It’s just simply not sustainable nor profitable. By classifying your clients in a meaningful way, you can focus your time, money, and resources on the most deserving clients to retain them and attract ideal clients just like them. But building a consistent and cohesive experience is no easy feat. Platforms like Toolkit CRM enable you to build out your client classes digitally. Once built, you can create custom services for different tiers, delegate tasks, and then automate them. This ensures you’re operating at maximum efficiency and has the added benefit of helping your clients build trust in you and your business.

But let’s be very clear, client classification is not about ‘judging’ people-this is about assessing the value of a relationship in terms of what you can afford to deliver to them, which is directly related to what they deliver to you. Someday you’ll realize you cannot be all things to all clients, but you can definitely be all things to some clients. That’s why you should set standards in your business.

Here’s an example of how you can classify your clients in Toolkit CRM:

1) Create your Client Classification tiers such as the AAA Client Classification Model below or whichever classification system is most relevant for your business:

2) Then classify your clients, by opening up a Contact record and selecting the Client Class as shown below:

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