Is splashing Las Vegas across your home page the right kind of promotion for a serious retail FX broker?
The past while — as retail FX trading volumes have heated up again in 2013, as has competition in the industry — we’ve been noticing new and innovative marketing campaigns by FX brokers, looking to give their clients and prospective clients ‘something different’ than the herd — while still adhering to the standard of encouraging clients to trade more.
Last week, we reported that Cyprus FX broker Liquid Markets had dumped the deposit bonus in favor of paying clients bonus interest — the more you trade, the higher the interest. This week we were made aware of another interesting promotion by another CySEC-regulated brokers, this time IronFX.
Visiting the IronFX home page, it was impossible not to notice the familiar neon glow of the Las Vegas lights splashed across the page, touting a “Win a Trip for 2 to Vegas” contest (see below), rewarding the best trade performance at IronFX between now and the end of June. How do you qualify for the promotion? Generate trading volume — trade 199 lots (about $20 million in notional trades) between now and the end of June, and you qualify (subject to some other technical qualifiers). The contest also has second and third prizes of $2,000 — and also promises to pay $500 to EVERY qualifier.
One thought on the branding effect of all this. On the one hand, it is an interesting and different-than-usual promotion, which will likely talk to a lot of traders. (Hey, who doesn’t love Vegas!). But of the other hand, we have to question the wisdom of splashing Vegas neon across the home page of a serious FX broker like IronFX. In the online business, your brand is tied very closely to your website and especially the home page of a website (including us). And we’re not sure if in an industry such as retail FX, where brokers are often reminding traders that this is serious, knowledge based trading, and not gambling, is this the image you want to project when people first come to your home page?
Do you agree? Please share your comments with us below.
This is also a good place to quickly review the math of promotions. A client who makes $20 million of trades will generate about $3,000 of spread-based revenue to the FX broker (assuming an average spread of 3 pips) — more than entire second prize! So if only 10 traders ‘enter the challenge’ by being enticed to trade the full $20 million, the promotion should make money for IronFX.
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