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What makes a brokerage great?
As much as the market has become overcrowded and competition has become fierce, some companies have managed to stand out from the rest and become what most would refer as “great”. Greatness is however not a destination, if merely because no company is perfect. Greatness is a path that a company wanting to remain at the top shall never finish walking. Greatness is an aspiration, not a destination.
So what are the things that these top brokerages that have managed to stand out from the crowd do? Yael Warman from Leverate takes a look…
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1. They don’t compete on price. Price competition in the Forex industry is a red ocean. Spreads are as thin as they get and money incentives are used by every brokerage in town. When you compete with price, your customers will leave you at the first sight of a better offer from your competitor. Top brokers compete on service and added value, which builds loyalty and a good reputation.
2. They don’t limit themselves to affiliate traffic. It is not secret that affiliates are a great way to bring in traffic. For the Forex industry this is particularly true, as it is reported that affiliates generate anywhere between 70 and 90% of a brokerage’s incoming leads. In a market as competitive as this one however, relying solely on affiliate traffic is a guaranteed path towards failure. Brokers today must find ways to differentiate themselves and attract clients using a marketing mix that includes a variety of media including broadcast, digital, outdoor, print, social, event sponsorship and organizing, and other types of mass media outlets.
3. They worry about their reputation. Word of mouth is a key influencer in purchasing decisions. According to Nielsen, 84% of consumers say they trust recommendations from family, friends and colleagues and BrightLocal reports that 88% of people trust online reviews. The power of referrals is so great that getting 1,000 customers to tell others in their sphere of influence about your company, can potentially reach 500,000. No wonder top brokers spend enormous efforts in making sure their reputation remains impeccable both online and offline and that their clients are happy, so much so that they share their good experience with their friends.
4. They automate. Around 200 years ago, the industrial revolution caused major impact over large scale manufacturing, eventually shaping the modern capitalist economy. Today, automation is shaping yet again processes across every industry. For brokerages, automating the conversion and retention funnels means less need for a large sales staff, reduced human error, improved and optimized processes, and ultimately, a boost in ROI.
5. They know retention is more powerful than conversion. It can cost a company five times more to acquire a new client than to retain an existing one and top brokerages know this. This is why top brokerages spend time, energy and money in focusing on retention rather than conversion.
6. They have a mindset of contribution. Top brokers are customer focused. Their decisions are always measured against the premise of WIIFT (What’s In It For Them (the customer)).
7. They are market focused. The Forex market is a global one, but customers are localized and successful brokers know that in order to best attract and maintain their customers is to adapt their offerings to the needs of each specific local market. This strategy can be applied not only to geography, but to other demographics as well. Not all clients are created equal and thus no two offerings should either. Top brokers target millennials with a different set of offerings than they do genYers, they target women with different offerings than they target men, and they target Brits with different offerings than they target Bulgarians.
8. They make conscious decisions about building versus buying. Building your own technology (platforms, CRMs, etc) shows ambition and many brokerages have the “we can build that” mentality ingrained in their DNA, but spending time building your own tech can deviate you from what should be the main goal of a brokerage: sales and marketing. Deciding to build your own technology is not a decision that should be taken lightly and it has often brought down brokerages that had otherwise huge potential of success. Successful brokers know what their core competency is and when it comes to technology, they buy.