A BBQ-style service model
As the summer comes to an end and final preparations are made for Labor Day celebrations, I think about all the great gatherings we’ve hosted for friends over the last several months. We’ve had small cook outs for a close group of 4-5 friends and larger block party BBQs for 75 neighbors!
While both larger and smaller events accomplished the same goal of connecting with friends, the feel was very different. For the larger gatherings with the whole neighborhood, the purpose was meeting people, getting to know them, forming a sense of community and making a connection. When “catering” to a large number of people it’s best to keep it simple and leave options to a minimum. At the larger BBQs where there is not a huge personal connection, people expect and are happy with standard BBQ fare – burgers and dogs.
On the flip side, the purpose of the smaller events with 4-5 close friends is deepening relationships and showing appreciation for those friendships. Because these are valued relationships and the gathering was small, we had the ability and desire to customize the experience for each guest by offering favorite foods and drinks: scallops and shrimp for the seafood lovers and steaks for the meat eaters, along with an assortment of favorite beverages and desserts.
So, you’re wondering what all this has to do with your service model… EVERYTHING!
Consider segmenting clients into two tiers, those generating more than $5K in revenue and those generating less than $5K in revenue, after all it’s the revenue that affords those steaks! As the revenue a client generates increases, there should be a corresponding increase in the amount of service and value they receive.
“B” clients (those generating less than $5k in revenue) receive leveraged, scalable, one-to-many products and service. These clients represent a significant amount of revenue collectively, but it’s spread among a lot of clients. The revenue per client does not justify customization in this tier, therefore it’s important to connect with the clients, but limit the amount of time and resources dedicated.
On the other end, “A” clients (those generating over $5K in revenue) should receive customized, wealth management solutions through personalized relationships. These clients typically generate 80% of revenue, but only represent 20% of clients. These are the relationships that need to be cultivated and appreciated. The service experience focus should be placed where the reward is greatest; therefore customization and attention to detail are essential.
As you ramp up for fall meetings and activity, think about segmenting your practice and creating a service model that provides service in relation to revenue generated.
Alyssa Von Herbulis is a practice management consultant for Russell Investments’ private client services business.