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How do I classify clients using ABCD categories?

The key to client categorisation and client portfolios is based on a "client needs" analysis.

The best way to categorise clients is to group them according to their needs and the level of engagement they desire from your business.

Attaching a "client needs" mindset to categories reduces the emotion of hoarding clients, helps with workload distribution, reduces bottlenecks and most importantly, improves client service.

Categories are based on the level of communication required by the client:

  • A and B class clients require high-level communication because they prefer to be included in all decisions and they want to take advantage of every opportunity. They often have complex business structures that need specialised advice and extra resources.
  • C class clients require less communication. They are typically sole traders or entities with less complex business structures.
  • D class clients need little or no contact outside of periodic reporting and sending invoices. The business structure is similar to C class clients.

It’s important to understand your client’s category because it will affect your degree of communication. If you are unsure which category your client falls into, then it is advisable to contact him or her to get their feedback on how they would like to be communicated with.

In addition to the client needs analysis, you may like to attach your own business specific parameters to A, B, C and D clients. Below are some examples for you to consider:

A clients

  • Most valuable in your client base, has a turnover of $X
  • Annual revenue is typically > $15,000
  • Profitable, with write ons 
  • Larger, more complex business structures
  • Require more time and resources to complete work milestones
  • Uses a range of our service offerings
  • Refers A & B class clients
  • Great to work with
  • Good governance and record keeping
  • Owner has a growth mindset
  • Listens to our advice
  • Understands and values our service
  • Pays on time
  • Can only be handled by a Senior Client Manager

B clients

  • Annual revenue ranges between $5,000-10,000
  • Profitable, no write offs
  • Business is growing
  • Requires moderate time and resources for job completion 
  • Utilises other service offerings 
  • Strong referrer 
  • Pays on time
  • Could potentially be handled by an Assistant Client Manager

C clients

  • Annual revenue is above $2,500
  • Good to deal with, responds to queries on time
  • Less complex business needs, easier to manage
  • Requires little time and resources for job completion, quicker job turnaround 
  • Refers clients
  • Typically has low level communication or production traffic queries 

D clients

  • Difficult to deal with, slow responder
  • Poor quality record keeping
  • Not profitable, often has write offs
  • Slow payer

While C & D class clients are generally lower in revenue, they are often easier to maintain as a client. They are likely to remain satisfied with the work you produce for them and require little interference on your part. It is equally important that C & D clients feel supported by you and the team. 

Learn about types of communication traffic.

 

 

 

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