Identifying the Objects of Desire

Aspirations keep people motivated for success. That's why McDonald Financial Group, a subsidiary of KeyCorp, uses "aspirational segmentation" to figure out how to best serve its high-net-worth clientele.

KeyCorp (Cleveland, $85 billion in assets) acquired McDonald Financial Group (MFG) several years ago in order to provide one-stop-shopping for wealthy clients. MFG's revenue mix: 42 percent from investment, 34 percent from banking and 24 percent from trust activities. "Clients are really looking for breadth of solutions," says Tiffany Goldstein, senior vice president, strategy and channel management, McDonald Financial Group. "In order to be the trusted advisor, you need to offer all of those things." (Goldstein spoke at a recent Bank Systems & Technology Web event, sponsored by AMS.)

But merely having an extensive product set wasn't enough. To drive growth, advisors needed the ability to personalize client interactions. That's why MFG incorporated aspirational segmentation into its sales strategy. Goldstein defines "aspirations" as "how clients choose to spend either their time or their money at the point of payout." For example, the "family provider" comprises one aspirational segment. "The important goal for this individual is, 'To provide for my family while being prepared for a comfortable retirement,'" says Goldstein.

Each segment can be examined for actionable descriptive characteristics. "One of the things that we learned was that 42 percent of 'family providers' have a financial plan," says Goldstein. "Of those, 71 percent are willing to move assets as a result of that financial plan."

Furthermore, aspirations often correlate with customers' preferred access channels, helping the firm to craft a delivery strategy in response. For example, people in the "explorer" segment, the group to which small-business tend to belong, often use online planning tools. "They would prefer to go online, play with a financial calculator online, come up with their own results and then run it by you for validation," Goldstein says. Knowing that these customers may want to speak to an advisor at any time, MFG highlights its extended call center hours in its customer communications to this segment.

MFG's aspirational segmentation approach allows advisors to offer "more meaningful solutions and suggestions," Goldstein says. Also, knowing what aspirations to look for in a customer helps up-selling at the retail bank. "It has also allowed for the transfer of leads from our retail organization to our high-net-worth organization," she adds.

Based on the results thus far, aspirational segmentation has been a success. "We have seen a significant increase in the number of products and services that are cross-sold as a result of that emphasis on aspirational segmentation," says Goldstein.