Many financial advisors resist segmenting their clients because they don’t want any of their clients to get bad service. But, according to Ray Adamson chief customer officer with Burlington, Ont.-based BlueSun Inc., segmentation doesn’t have to mean bad service for anyone.

The “old school” of thought is that you divide clients into multiple divisions — A, B, C and D, for example — and the clients in the lowest division receive the poorest service. This just isn’t the case anymore, Adamson says. If a “D” client calls the office, their concerns will still be answered promptly.

“The reality is that you need to be very clear about who you spend your time with,” Adamson says. “As much as possible, you want to control and drive that, and that’s where the power of segmentation comes in.”

So, you must choose which clients you’re going to contact for cross-selling and up-selling opportunities, Adamson says, as well as leveraging those relationships to get introductions and referrals for other clients.

Here are three tips to make client segmentation easier and more effective:

1. Make use of technology
Most advisors can name their top clients off the top of their head, Adamson says. But often, these advisors have only two segments: their top clients and then everybody else. For insurance advisors, the sheer volume of clients makes it difficult to envision which category most clients would belong in. Technology can help you sort your clients through the various criteria.

Many advisors are still working with company statements or their own files instead of using a client relationship management (CRM) system, Adamson says. If you’re able to get your client data and product information into a CRM program, you should be able to tag your clients so that you can search and sort them into different categories.

2. Formalize a proactive relationship-management strategy
The next step is to identify your “ideal client.” Ask yourself: Who has the need and interest for what I’m selling, along with the means to pay for it? Then, examine what you’re doing to build your relationship with those clients.

List your top relationships, and plan how you’re going to add value for these clients over the calendar year. For example, you could plan to take these clients out to a restaurant, conduct an annual review, schedule a quarterly phone call, or invite them to events.

3. Create a matrix
Draw up a matrix listing the 12 things you might do for “A” clients, the nine things you would do for “B” clients, and the six tasks you would do for “C” clients.

Once you’ve figured out how you’re going to serve your top clients, figuring out how to cater to the rest of your client base becomes easier.

Now, you’re just going to cross off your list certain strategies and activities that take more time and effort, Adamson says.

For example, if you’re calling “A” clients on a quarterly basis, you could schedule a semi-annual phone call for your “B” clients. Other efforts, such as hosting events or sending mail-outs, could be more widespread.

“There is value in trying to get to three levels of segmentation,” Adamson adds.