audit FAQ

New Regulations, New Opportunities

As a business, you already hold one of the most valuable assets needed to be successful –an existing client database. With the countdown to the RDR implementation well and truly underway, understanding your clients is key to continued commercial success. If you know your clients, who they are and what their needs are then not only will you be increasing the value of your business but you will be able to maximize the opportunities to deriving greater profitable revenues.

Engage:cs have developed a unique service allowing IFA’s and Mortgage firms to carry out a comprehensive audit of their clients. This audit will not only provide a comprehensive evaluation on the quality of the data records held, but also provide a detailed profile and segmentation of your client base. In addition, through external sourcing partnerships, we are also able to append missing data to complete your customer records.

Why Audit your client base?

Under the RDR, a key change that your business will need to consider is the way in which you handle your client mix. Different types of customers will fit into different segments, distinguished by the type of advice or service that will be best suited to them. It will therefore be key that you are able to group customers together so that you can engage in the most efficient way with your mix of customers.

The most successful businesses in any market are those that make full use of the knowledge about their customers to be derived from their database and use customer segmentation to maximise profitability. Only by understanding clearly the different type of customers, their broad range of needs and the value each group provides, can propositions be designed that maximise the value to the firm.

Once the segmentation is done, a business can engage more efficiently with its customers on the basis of client segments through tailored communications appropriate to each segment.

What does segmentation mean in this context?

Segmentation is a way of being able to understand your clients and who they are, what characteristics they share and what elements make some groups distinct from others in the context of your business services. It is imperative you have a thorough understanding of all your clients, not just those who you currently deal with, so you can operate successfully in the future. An effective segmentation will also look at your client’s potential, rather than just what business they have written with you in the past. The audit is the only service available to ifa’s to provide you with sufficient insight into your client base to ensure you are focussing on the right clients.

Doesn’t segmentation move us away from providing a personal service?

No, on the contrary, it helps you provide a better service to a wider audience. Segmentation is a step towards knowing your customers better as to run this process means that you are actually taking time to know who your customers are and what their various needs are. You can tailor your service to a wider audience so that many more of your clients can have their needs dealt with appropriately rather than be ignored or communicated with in a way that doesn’t work for them. And the marketing tools available today mean that talking to many clients together can still be done at a personal level.

Why else should I consider an audit?

If you are considering selling your business, one of the most valuable assets will be your client data. This is an element that a buyer will be taking a keen interest in and the area where he will be looking to make his money from if the business is to be a continued concern in the future. Being able to demonstrate who your clients are and that you have a database with clean, accurate records will show that there is an inherent value here and will ease the sales process as well as delivering you the price you are looking for.

The mirror side of this of course is that if you are looking to acquire a business, for a relatively minor cost against the cost of the acquisition, conducting an audit of the client base should be considered a key element of the due diligence process. Only by knowing the potential of the clients you are acquiring, how good the data quality is held on them and the future potential for generating business through them will you be able to quantify the value of the business being purchased. You wouldn’t buy a car without looking under the bonnet!

What’s included in the Audit?

The audit will also provide a comprehensive overview of your client base make up and by cross referencing your data with comprehensive consumer records we are able to provide additional consumer profiles and financial insight.

The audit will provide a detailed report covering (not exhaustive):

• Total number of unique clients and volume of records.
• Accuracy and validity of name, address and other contact details.
• Validity of email addresses through dummy send and identification of soft and hard bounces.
• Data errors and omissions.
• Age of data.
• Presence of duplicated records and suppressions.
• Financial product profile (products purchased, attitude to risk, etc).
• Geographical and socio-demographic distribution of clients.
• Extensive client profiling covering age, gender, income and financial motivations.
• Next steps – costs and measures that can be taken to improve quality of data (such as email address appending).

What report do I get at the end of the process?

You will receive a bound report containing all the audit report data as well as a summary document.

The full report has two key sections. The first will provide the review of the quality of your current database records, showing how ‘clean’ the data is, what is missing and how accurate the data is. The second section will provide a profile of your customers including comparisons against the UK population of adults as a whole, financial product propensities and a classification of customers into different types based upon their characteristics.

The second report provides summary detail from the above, draws some conclusions and gives explanations to help you decipher the details contained in the main audit report.

How can I use this information?

A well managed clean database is key to being able to target and provide customers with the services and products they need at the right time. The initial audit will create a sound database to work with and will identify deficiencies in the database that can be remedied.

Having a profiled and segmented database importantly gives you the ability to be able to service a large number of clients in ways that are appropriate to their needs and using methods that are cost effective for yourself. With a segmented database, you can market to them using automated, smart marketing techniques, a further service that Engage:cs is able to provide for you.

To receive a sample audit summary report to see how it can help your business, please email Jonathan jonathan.barrett@engagecs.co.uk