top of page
  • Writer's pictureDavid Peters

Making Higher Value Clients a Priority: A Client Scoring Framework for Financial Services Profession

Updated: Jun 26, 2023

Accountable Blog for CFOs

By David Peters, CPA, CFP, CLU, CPCU

If you ever read books on growing a business, you come across a lot of pithy sayings and platitudes. “Work smarter, not harder.” “Make your higher value clients your priority.” My favorite has always been “20% of your clients cause 80% of your problems.” While there is certainly some truth in these contrite words of wisdom, I am often struck by how many authors stop at just the words. That is, many authors agree that the key to building a successful business is spending time and working with your highest value customers. However, many times they don’t tell you what that really means. Simply put – what is a high value customer? Many articles simply say that the owner needs to figure out who their higher value customers are. While this may be true, these unhelpful words leave the reader struggling to apply what they have just read. It leaves them with struggling with where to begin.

Don’t get me wrong. I don’t necessarily think there is a one-size-fits-all way to measure what clients are the best for every single business. However, there are some commonalties among certain industries, including financial services. That is, a common framework is possible. This is where client scoring comes into play.

Client scoring is an attempt to measure and differentiate good clients from bad ones. It is also a way of finding more fulfillment in our work. That is, when we work with only the clients that give us the best results, our chances of running a successful business go up. While certain financial services professionals may have additional dimensions they focus on, I find most practitioners in tax, insurance, and financial planning can find success by focusing on three things – potential revenue, their hourly rate, and compatibility.

Potential Revenue

This one should be obvious. If we are trying to be the most profitable business possible, then we should certainly spend time with the clients that make us the most money. More potential revenue means a higher client score – a higher value should be placed on that relationship. It should be noted though that I am careful to say potential revenue here – not just revenue. Many companies look at which clients generate the most revenue each year. However, far fewer companies look at potential sales dollars. Only looking at current revenue is very backward looking. It misses where future revenue could be generated. In short, it is a defensive perspective. You focus heavily on what you need to protect (your biggest revenue generator), rather than where your opportunities are. Focusing on potential revenue is forward looking.

Many practitioners agree with the logic of examining potential revenue, but they hesitate to use it in their client scoring since it appears to be a difficult number to measure. However, I would argue that this metric is only difficult to measure if we are not adequately listening to our clients. The fact is that clients tell us things about themselves and their business. It happens in everyday conversations – both formally and informally. If you are an insurance agent, clients tell you about things they buy, business opportunities they are looking to pursue, and even things their families are doing. For example, if a client says that their child will soon be driving, you know that they will likely be in need of auto insurance. The birth of a new child might signal a need for life insurance. For tax practitioners, you know about business ventures that the client is in due to seeing their K-1’s and 1099’s. You also know if a new business is beginning to take off due to schedule C income, which may signal a need for small business consulting. We can look at internal reports to figure out what revenue we have. It is only through listening that we figure out what we don’t have.

Along with this thinking though, we also need to be realistic about business that we will never get as well. For example, you may do tax preparation work for a small business owner. If that owner continues to only give you his/her individual tax return and never mentions the possibility of you doing the business return as well, the potential revenue for you may have already been reached. That is, he/she may only ever give you the individual return – nothing more. In short, judgement is important when measuring potential dollars. The scoring should be based on what is realistically possible for you to expand to.

Hourly Rate

I have heard many practitioners complain about “high maintenance clients” – clients who require lots of guidance and seem to always be agonizing over some detail related to their financial situation. They always send “hair on fire” emails that immediately make your heart race and stress level increase. These types of clients wear us down – especially if you charge them a flat fee for your services. They eat away time that could be spent pursuing other clients or just getting other billable hours in. For these clients especially, it is important to calculate your hourly rate with them. That is, take the total revenue you earned from them and divide it by hours spent. Your clients with a higher hourly rate should receive a higher client score than your ones with a lower hourly rate.

If you charge your clients an hourly rate anyway, it may be tempting to simply put your hourly rate down for all your clients. However, when making this calculation, it is important to include both billable and non-billable hours. I think many practitioners are guilty of doing things as a favor for their clients. Maybe they don’t charge them for a copy of a tax return. In the case of a financial advisor, maybe they don’t charge them to sit in on a meeting with their business consultant. While all financial services are service-based and customer-focused industries, it is important to remember the cost of nonbillable hours on our resources and staff. These small favors add up. For this reason, it is important to calculate an hourly rate with all hours accounted for – not just ones we choose to bill on.


When I started my own business several years ago, I promised myself that I would only work with clients that I liked. My reasoning was simple - if you like the people you work with, you go above and beyond to help them. You do a better job. You would also just enjoy your work more. After all, who likes working for someone who is a jerk?

Since that time, I have always scored clients higher if I like working with them. I have never hesitated to get rid of a client who was causing me unnecessary headaches. I get rid of clients who don’t pay me on time. I get rid of clients who mistreat my staff. I get rid of clients who I seemingly have to chase around for everything – tax documents, signatures, and other information I need to do my job. I have often heard practitioners argue that charging a client more will make their bad behavior more tolerable. That has never been my personal experience. In fact, when a client pays more, they may justify bad behavior more easily – “I can be a jerk because I pay them a lot of money.” If a client is causing you pain, it is often best to just let them go.

Often times, letting a difficult client go is best for that client as well. While we would all like to think that we can meet the needs of any client, the fact is that we can’t. There are some people we simply don’t click with, no matter how hard we try. However, the unfamiliar is always scary. Sometimes we remain in bad client relationships because that is seemingly easier than trying to get new clients. We put up with more and more because we reason that we can’t afford to give up the revenue. This is foolish thinking. The fact is that the client may actually have less conflict with another practitioner. More importantly, if we are not spending time on problem clients, it frees up more time for us to work with clients we do like.

Scoring clients based on compatibility allows us to more objectively look at where we may inadvertently be tolerating bad behavior. It allows us to take a step back and figure out where we should be investing more time – and where we should be cutting ties. If want to enjoy your work, you need to enjoy the clients you serve.

Other practitioners might have things might have additional things that they add to these three metrics. For example, financial advisors may look at years of potential revenue and tax practitioners may look at referral potential. In any case though, client scoring for most financial professionals must begin with these three metrics as the baseline. If we don’t look at where our opportunities for future revenue are, the hours we are spending to generate our revenue, and whether or not we like our clients, we will end up feeling burned out and tired. As many writers have said, the key to building a good business is “making your higher value clients your priority.” If we all agree with the truth of this, then let’s figure out how to do it!

41 views0 comments
bottom of page