The following guest post is courtesy of Rima Khabbaze, Director of Sales at TradeSocio.
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Traders change brokers with the same casualness as changing clothes.
Why?
Because the value and level of differentiation offered by most brokers is not enough to outweigh the benefit of a $1,000+ welcome bonus from another broker.
So, how can you improve your trader retention?
Below are a few lessons we learned from studying brokerage firms with high retention rates.
Lesson 1: Become more than your traders’ broker
Brokerages with social trading have higher retention rates than those without. Why? Because when traders collaborate and engage in an online community, moving to another broker becomes more consequential; It means losing their community.
This is why the news feed is central to the TradeSocio platform, as it enables your traders to build connections that bond them to your brokerage.
Lesson 2: Automate data intelligence for your sales team
Imagine if you could accurately predict whether a trader was going to move to another broker, days or weeks before the trader made that conscious decision.
Better yet, what if you could take those insights and make them actionable by automatically notifying your sales team of any traders who are showing signs of becoming inactive.
This isn’t science-fiction, it’s predictive analytics, and it’s exactly what a number of our clients are starting to use, thanks to the insights provided by the TradeSocio platform.
Lesson 3: What’s measured gets managed
Peter Drucker famously said that “what gets measured gets managed”.
Does your marketing team actively measure retention? And if so, is it tracked over time to see whether retention is improving or getting worse?
This data can usually be gathered from your web analytics software. It’s also something that we track and offer in our broker insights dashboard, as shown below:
For the same reason why athletes measure their performance, tracking retention provides a feedback loop that objectively tells you whether you’re getting better or worse over time.
4. Differentiation: The heart of the problem
At the heart of the retention problem is the fact that most brokers don’t have a strong enough unique value proposition (as far as the trader is concerned).
While technology, data intelligence, and clever marketing tactics can boost your retention rates, none of this is as effective as truly differentiating your offering and providing a service that traders can’t easily get elsewhere.
5. Do you know why your traders are leaving?
Let’s say that 65% of your traders are retained after 12 months. Do you know why 35% are leaving?
Are you surveying your lost clients? Are you keeping a database of client feedback? Is this feedback being seen by the right people in your organization to prioritize and implement?
When you can accurately identify the root cause, you become empowered to solve the problem swiftly and effectively.
Want to increase your brokerage’s retention rates?
If you’d like to boost your brokerage’s trader retention, you can arrange a free (no-obligation) demo of our technology here.