XYPN Operating System | Client Evaluation Matrix

CLIENT EVALUATION MATRIX

The Client Evaluation Matrix is your tool to assess how well your clients fit your business. This tool will help you see which clients are bringing you the most joy and fulfillment and which clients are compensating you appropriately for the value you provide.

WHY DO WE USE THIS?

As your firm grows, you have limited space, and you may find that some clients are not ideal or profitable for your firm.

WHEN SHOULD WE USE THIS?

Repeat this exercise annually or at any time you feel you need to phase out some clients to make room for more ideal clients.

HOW DO WE APPROACH THIS?

Categorize your clients into four segments or quadrants using this tool. You will place each client on the matrix based on your ‘enjoyment rank’ and ‘revenue’ or ‘effective hourly rate'.

STEP #1

Click '+ Add Client'.

Enter each client on the matrix based on your 'Enjoyment Rank' and 'Revenue' or 'Effective Hourly Rate'.

Enjoyment is just that - how much do you like working with them? Don’t overthink it. Each advisor will have a slightly different definition of what brings them joy. This can include the complexity of planning work, the type of planning, the personality of the clients, the number of referrals they send to you, or the impact your work has on a client’s life. You name it. Just enter a gut reaction from 1-10, with 1 being low and 10 being high.

Revenue or Effective Hourly Rate - Use either your total annual revenue per client or, if you have the data, their annual revenue and the number of hours you work for that client each year. This will give you an effective hourly rate for the time you work for them. An effective hourly rate is more granular and will give you better results for the exercise.

STEP #2

Determine the midline on your axes.

Y-Axis: Fulfillment or Happiness

This axis ranges from 1-10, with 1-5 being low and 6-10 being high.

Ideally, all clients will fall above the midline.

X-Axis: Revenue or Hourly Rate

This axis uses the median revenue as the midline the first time you complete an evaluation. This will give you a baseline to begin. On future iterations, you can use your minimum fee or even an aspirational median. This will help you see which clients need to be pulled up. Just remember, if you continue to use the median, there will always be clients in the lower quadrants, and that's not necessary. Ideally, someday the clients will all fall in Quadrant #1,

BE ADVISED: If all of your fees are low, or you're continually over-servicing your clients, even the very best clients in Quadrant #1 will need work to create a sustainable business. We advise that you ensure your effective hourly rate is $250 / hour or more. This generally results in annual revenue of a minimum of $3,750 per year.

STEP #3

Analyze each quadrant on the matrix based on XYPN's insights:

Quadrant #1: High Revenue or Rate / High Happiness

These are your “clonable” clients. The more, the merrier in this quadrant! This is the goal for all clients! Congratulations for having clients who fall in this segment.

ACTION PLAN POSSIBILITIES:

What commonalities amongst these clients can inform your marketing, client screening, or other practices?
Make sure your marketing content and branding speak to this audience.
Tap into this client segment for deep dive exercises regarding your client avatar.
If you are not using an effective hourly rate on your evaluation, it is important that you take time to ensure you are not spending too much time with your clients. A high fee can quickly turn into a low fee when you overservice your clients.

Quadrant #2: High Revenue or Rate / Low Happiness

While they're fantastic revenue sources, you want to take time to look at these relationships so that you can gain more fulfillment and enjoyment in the work you do for these clients. This quadrant is reserved for client relationships that need some TLC.

ACTION PLAN POSSIBILITIES:

What lowers the joy you feel for these clients?
- Is it the planning you are doing?
- Is it client behavior?
What can you do to bring more joy?
- Can you simply work to manage client expectations and/or behavior?
- Would a higher fee make it more enjoyable? It’s ok to be frustrated that you are not being paid enough, even if they are above your median. High doesn;t always mean "enough".
- If it’s the planning work you don’t enjoy, consider a transition to another planner who will get more enjoyment out of the work.
You may decide to fire the client, and that’s alright.
- You can use your network to refer them to an advisor who is a better fit.

Quadrant #3: Low Revenue or Rate / High Happiness

Look at these clients to determine why they are not paying you what you are worth and increase the revenue and/or profitability they generate for your firm.

ACTION PLAN POSSIBILITIES:

What fee increase could bring these clients into Quadrant #1?
Not everyone is a special case. If they walked in today, what would you charge them?
Have an associate advisor or other teammate do as much support work as possible to increase the profitability of the client.
Consider a full transition to an associate advisor as they take on lead planner roles.

Quadrant #4: Low Revenue or Rate / Low Happiness

This is the worst, but often the easiest quadrant to handle. Does the phrase “fish or cut bait” ring any bells? The bottom line is, you must ask yourself what it would take to move them in either direction, and if it’s feasible.

ACTION PLAN POSSIBILITIES:

Would a higher fee add to the joy? Would you be happier to see them if you knew you were being compensated appropriately?
Is it just a core issue with them that you cannot change? You can try managing their behavior, but sometimes we don’t get along with others, and that is alright.
If you cannot see a clear path to shift them in both fee and joy, then the best bet is to refer them to a planner who is a better fit.
Take time to analyze why they are clients so that you don’t accidentally sign more like this in the future.
If you are nervous about firing these clients, take time to determine the revenue you will lose. You will probably be pleasantly surprised that it is not an amount that truly impacts your business and can easily be replaced by higher-paying, more enjoyable clients.

Last Updated: 8/24/26