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Segment today, profit tomorrow
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1
Segment today profit tomorrowJohn Joe McGinley
Business Strategy Manager
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Who am I?
Not a jockey
23 years experience
Standard Life
Abbey Life
Scottish Life
Aegon
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Are your clients your clients?
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The power of seven
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Wanna tell you a story
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Time dominated by prospecting
Many unproductive clients
Generalist
Variable investment capacity
Falling margins
Lack of capital
Variable IT capacity
Variable adviser productivity
Poor service definition and delivery
Time dominated by closing sales
Fewer clients 80/20 profit rule
Specialist
High investment capability
Predictable and healthy margins
Stronger capital base
IT – driven
All advisers productive
Clear service definition delivered consistently
Current intermediary Future intermediary
Transition time: 2 – 3 years
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Why plan?
Planning will help you:
shape your thoughts
think through scenarios and implications
ensure points aren’t missed
target the correct market
identify opportunities and weaknesses
identify your own personal goals and business vision
understand your customers, highlight potential customers and how to attract them
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Develop understanding and insight within your customer base
Focus on groups of customers who will bring you the most income
Understand how they would like to be treated
Satisfies many aspects of TCF
Many IFAs have seen greatly increased profitability
Why segment?
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Age bands
Geography
Free assets
Attitude to risk
Life stage
Financial objectives
Combinations/Complex segments
Segment your customer base
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Characteristics of ‘good’ segments
Specific
Measurable
Large enough to be viable
Profitable
Differentiated
There’s no right answer!
High net
worth
High-end affluent
‘Mass affluent’
Aspirational
Segment your customer base
Many clients could be in a segment you no longer want.
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Define a service strategy
Define a marketing strategy
Remuneration model
Many firms segment and then stop!
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Example proposition matrix
High net worth Affluent Aspiring
Charge basis Flat fee Lower fee and bespoke
Bespoke
Key services Full wealth management
Focused financial planning
‘Product-led’
Face-to-face? Quarterly Annual As required/ chargeable
Telephone Dedicated helpline Generic helpline No telephone support
Email / Web ‘Personal’website
Offered Mandatoryself-service
Client reporting 6-monthly full financial plan
Annual review Review on demand
Etc…
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Ask yourself 4 key questions
What problems do I solve for customers?
Why should people buy from us?
What benefits are you offering that the competition do not offer?
What makes us different?
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What should your segmentation look like?
Who do you sell to now?
Who do you want to sell to in the future?
What do your clients want from you now?
What do clients want from you in the future?
What will your business look like?
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Key Fact
“The products and services that succeed are those that offer a benefit to consumers ….
That is greater than the perceived cost.
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Example proposition matrix
High net worth Affluent Aspiring
Charge basis Flat fee Lower fee and bespoke
Bespoke
Key services Full wealth management
Focused financial planning
‘Product-led’
Face-to-face? Quarterly Annual As required/ chargeable
Telephone Dedicated helpline Generic helpline No telephone support
Email / Web ‘Personal’website
Offered Mandatoryself-service
Client reporting 6-monthly full financial plan
Annual review Review on demand
Etc…
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Your Proposition Matrix
What segments do you want?
What charges?
What contact?
What technology?
What markets?
Anything you want?
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Business brain
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Remember
www.aegonse.co.uk/businessbrain
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Any questions?
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