Problem
The margins of the largest and most lucrative customers of a large company supplying retirement investor services were declining. Despite the highest satisfaction levels in the industry and strong retention rates, the provider was experiencing pressures to reduce fees, bundle value-added services into existing contracts for free, and customize services for each account at no cost. The result was highly individualized services, delivered by dedicated teams with inconsistent processes executed manually to compensate for limited technological capabilities.

Approach
Through a facilitated process with the Executive Vice President and his executive team, we defined the opportunity to improve customer value by segmenting customers, identifying competitive differentiators, and defining signature experiences for each segment to reinforce value. In a series of workshops during Phase I, a team of two consultants generated executive alignment on “The Truth about Today”, the obstacles to margin improvement, and proposed a segmentation scheme based on customers buying orientation. In Phase II, a client executive conducted 30 more client interviews in person and on the phone to confirm the segmentation scheme and recommend both basic improvements to the service (table stakes) as well as key differentiators to perceptively drive higher client value.

Results
When the financial crises hit, and revenues tied to portfolio size declined due to stock market disruption, this organization was prepared to improve customer value and financial performance by targeting newly defined customer segments with specific service and pricing offers.

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