Second, Play Defense and Offense

Let’s look at methods to protect your top clients from the competition and how to replicate that top 20% in future clients.

Playing Defense: Protect the Top 20%

Because so few of your clients make up such a disproportionate amount of your business, you must protect your biggest and best relationships. Here’s how:

1. See Your Clients as People First, Not Just Customers

   Remember the acronym “FORD.” It stands for Families, Occupation, Recreation, and Dreams. These matter to your clients and are central to their lives, and you should know what they are for each client. Work with your team to ensure there’s a system in place to capture and collect this type of information and incorporate it during subsequent conversations.

2. Stay in Touch

   Continuously and consistently communicate with your top clients, assuring them that you’re prepared for whatever the markets may bring. When headlines are ominous or the markets become rocky, you don’t want top clients calling you about their concerns. Instead, reach out and remind them you already have a strategy in place for volatile market conditions. Also, contact your top three clients consistently just to check in—don’t talk business.

3. Build a Golden Rolodex

   Many financial professionals have built a network with an accountant and an attorney. Building a “golden Rolodex” involves expanding that network to include additional trusted providers that your aging clients may need.

   Researchers at the MIT AgeLab say that even if top clients have adequate financial resources, they’ll still have the task of solving the many challenges that accompany longevity, such as maintaining their homes, caregiving, and what to do with one’s time in later life. While you can’t be an expert on all longevity issues, you can serve as a trusted guide who identifies future issues and coordinates access to an extensive range of expertise and services that respond to clients’ evolving aging needs.

   Find and develop relationships with providers, such as a house cleaner, lawn-care service, handyperson, aging-life-care manager, travel agent, car dealer, director of a retirement community, etc. Top clients will value this network when they need it, and it will result in better retention because your competition likely won’t offer a similar network.

Playing Offense: Replicate the Top 20%

Whether you realize it or not, you’ve already succeeded among certain segments of people, as evidenced in your top revenue-generating client relationships. You can replicate your existing relationships using this logical, straightforward strategy.

Define the Type of Client You Serve Best

Make a spreadsheet of your top 25 clients and add their characteristics as outlined below.

1. Find Commonalities Among Your Top Clients

   • The Four “-Ates”

     • Educate—Where did they go after high school: college, vocational school, armed services?

     • Recreate—What do they like to do?

     • Congregate—Where do they socialize?

     • Donate—Where do they donate their time, talent, or money?

   • Acquisition Method

     Write down how or where you met these clients. Some examples are coffee clubs, lunch and learns, networking groups, seminars, centers of influence, referrals, etc.

   • Demographics

     • Profession or employment status

     • Age

     • Marital status

2. Who’s Your Ideal Client?

   After you’ve completed the characteristics spreadsheet, ask yourself, “What do my top clients have in common?” 

   Then, come up with a name for the type of client you serve best. Here are some examples that might emerge from your list:

   • Single, widowed, or divorced women

   • Business owners

   • Pre-retirees

3. Does Your Marketing Speak to Type of Client You Serve Best?

   As the profile of the type of client you serve best takes shape, tailor your prospecting strategy by aligning your marketing and messaging to that ideal client or prospect. This will help you to begin replicating your best relationships. Position yourself as the go-to professional for a particular type of client you’ve already served well.

Third, Identify Your MVPs (Most Valuable Prospects)

Based on our approach so far, it might seem logical to dismiss the bottom 80% of your clients and focus exclusively on the top 20%. But the bottom 80% still has growth potential for your practice. Within that group, it’s just a matter of finding your most valuable prospects (MVPs). The MVP strategy below builds on the premise that it’s easier to grow your business with existing clients than with new clients.

To segment the MVPs in your book of business, apply 80/20 math to the bottom 80% of your clients. The top 20% of that 80% are your MVPs. This is the group on which you’ll focus your prospecting efforts.

Make a spreadsheet of your MVP clients and use the filters below to determine which ones to focus on:

1. Likeability

   Is this a mutually beneficial relationship? Do you enjoy working together?

2. Referability

   Even if they’re not a top client, have they referred clients to you? Do they have the potential to? Are they a good center of influence?”

3. Growth potential

   Even though they may only have a small amount of assets with you, they may have additional assets elsewhere, e.g., a 401k plan, other IRAs, etc.

4. The 50/50 test:

   Identify clients who are over the age of 50 but have less than $50,000 in assets with you. You can choose a number greater than $50,000 if you choose, e.g., $100,000, or $200,000. With these MVPs, there’s probably some sort of disconnect and you need to get to the bottom of it.

Having “the Talk” with MVPs

After identifying and assessing your MVPs and deciding which ones to focus on, have “The talk,” which could be as simple as this:

“You know (client name), we’ve known each other a long time and I’d like to think we have a solid personal relationship. However, on the professional side of things, I appreciate the $40,000 you’ve entrusted us, yet I can’t help but feel I’m not a relevant part of your overall financial picture. What are your thoughts on us growing that part of our relationship?”

Realize that if you don’t have the talk, the answer is always no. If you do, your client either agrees to grow the business relationship or you gain clarity in knowing why they can’t or aren’t interested in growing the relationship. “The talk” offers you very little downside and unlimited upside because it brings you one of two things: more business or clarity.

What About Your Clients Who Aren’t MVPs?

Your MVPs may not be your biggest and best relationships, but that doesn’t mean those relationships are void of potential.

In the end, if these relationships don’t rise to a much higher level, you can still allocate your time and energy to these relationships proportionately with the complexity of their financial situation. This will enable you to spend 80% of your time with 20% of clients who are generating 80% of your business.

Remember 3 Things When Creating a Practice by Design

First, realize that 80% of your revenue may come from 20% of your clients and that 95% of your revenue may come from the top 50% of your clients. Second, there are ways to protect your best client relationships using defensive strategies and to replicate your best relationships using offensive strategies. Third, the top 20% of the bottom 80% of your clients are your MVPs (most valuable prospects).

The Pareto Principle: The Key to Retain and Replicate Top Clients

Prospecting can be a frustrating experience if we unknowingly target people who aren’t a good fit for our practice. And it’s even more frustrating to lose clients who are a good fit. Use the Pareto Principle to focus on replicating and retaining the clients who count in order to create the practice you’ve always envisioned.

Next Step

1. Within a week, apply the 80/20 and 95/5 ratios to your practice using the method from the first section above and see if they hold

2. With two weeks, choose and implement one offensive and one defensive strategy from the second section

3. Within three weeks, identify and assess your MVPs as explained in the third section