case studies

Case study one – What Clients to Work With

The successful practice had built up a considerable client base over the years both through organic growth and acquisition and although it was receiving a strong renewal base, was largely unaware of what their client base looked like and how long that renewal would continue.

Due to the way the client base had grown they had little insight into the make-up of the client base and whether there were opportunities that were being missed. Indeed, they were only actively dealing with around 160 clients, with the remainder going largely unserviced.

By carrying out a client base audit, Engage:cs were able to provide an in-depth breakdown of their client base and identify a number of issues that needed to be addressed:

• The first issue discovered by the audit was that a number of the contact details for their clients were out of date and they were not only sending correspondence (and in a couple of circumstances, policy documentation) to the wrong address but were also wasting over £2,000 per annum in postage costs.
• Engage:cs were able to cross reference their client records against the Royal Mail’s Postal Address file and correct over 2100 addresses.
• It was also discovered that the firm was currently corresponding to 53 clients who were deceased.
• Once the client files had been brought up to date it was possible to run the segmentation and profiling exercise on all records.
• The audit identified that there was a concentration of clients who had not been contacted for over 3 years. These were business owners and had incomes in excess of £100k. The firm has since recontacted those clients and invited them to a business owners seminar.
• They were also able to see that over 40% of their client base consisted of lower sociodemographic groups who came into the business following the acquisition 8 years ago and during that time they had been sending them 6 monthly newsletters aimed at high net worth clients (and were always surprised at the low response rate generated from these newsletters).
• With the help of Engage:cs they have now set up an email newsletter strategy to provide relevant newsletters to different parts of their client base.
• The practice has now identified some 260 clients they wish to be working with in the future (190 of whom were not in their original plans) and are working with Engage:cs to reengage these clients.

The audit and ensuing engagement process will allow the practice to not only identify who they should be dealing with, but also how best to communicate with them to get those clients reengaged.

Case study two – firm looking to sell and secure best sale price

Having been in business for over 30 years, our client is looking to sell their practice and realize the greatest return. Like many IFA’s up for sale, the main commodity being purchased is the client bank.

Having worked closely with a consultancy that helps prepare firms for sale, they had produced management accounts and reports detailing past revenues. However, it was necessary to demonstrate future earning potential and quantify where that potential would come from. They were also aware that some of their records were out of date and left them vulnerable to any scrutiny during the due diligence process.

It was necessary to build a more comprehensive view of the client base that covered more than just the management accounts.

The Engage:cs sellers audit allowed them to tackle many of these issues

• By carrying out the initial data quality audit we were able to identify where their records where incomplete or out of date.
• Before the audit the contact details were only around 72% accurate. However following corrective work, the records were 98% accurate, which proved very beneficial to prospective buyers
• The client profiling also demonstrated that much of the renewal income came from pension contributions and it was possible to validate the indexation assumptions used by the seller.
• The audit also demonstrated the quality of the client bank in that a very high majority were high net worth clients, with average incomes in excess of £100,000.
• We were also able to demonstrate there were a number of clients who were sophisticated savers and would benefit from a review of their investments.

By producing a detailed report highlighting the accuracy of the personal details of the client base and highlighting key areas that a new buyer could generate considerable incremental income, the seller was able to pre-empt many of the questions raised by the potential buyers. Not only that, but by providing such a detailed analysis of the client base, the buyer was immediately able to see how it would complement their existing business and where the opportunities lied.

The end result was a quick sale where the asking price was achieved and both parties were happy with the outcome.