CRM & Client Lifecycle

Core Concepts

Client Segmentation Models

Client segmentation assigns every household to a category that determines the level of service, contact frequency, review cadence, and resource allocation the firm provides. Without systematic segmentation, advisors default to reactive service — responding to whoever calls — rather than proactive, tiered engagement that matches effort to relationship value.

AUM-based segmentation is the most common starting point. A typical three-tier model:

AUM-based segmentation is simple to implement because AUM data is readily available from the custodian or portfolio management system. However, AUM alone is an incomplete measure of relationship value.

Revenue-based segmentation uses total annual fees generated by the household rather than asset levels. This captures value more accurately when fee schedules vary across clients, when some households pay financial planning fees in addition to AUM fees, or when clients have complex billing arrangements. Revenue data comes from the billing system and should be annualized to smooth quarterly fluctuations.