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For most Forex brokers, their biggest cost is Client Acquisition. So once you have the clients in-house, the last thing you want to do is lose them.
So how do you retain clients? With so much choice out there, why will traders stay at your brokerage?
Ben Richter, Head of Institutional Sales at Leverate takes a look…
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Today’s Forex market is super competitive with many brokers offering ultra-tight spreads, unique trading propositions and innovative tools.
So how are we, as brokers, supposed to keep track of all this competitive offerings, find ways to differentiate ourselves from others, and above all, keep our client loyal to our brokerage, happy and trading?
After 8 years working at one of the top forex brokerages in the world, I learned the key points to keeping your traders happy and loyal and today, I’m going to share this knowledge with you.
Handling Client Funds
I will start with this topic as the one key parameter to keeping your clients loyal is through efficient and reliable handling of client funds.
Clients care about their money and due to the poor reputation the Forex market has acquired in the past couple of years, this point has become one of traders’ top pain points. Traders are afraid brokers will give them a hard time when they decide to withdraw their funds and in some cases not even return their funds at all. This is true not only for unregulated brokers but for regulated brokers as well, don’t forget: poor reputation affect all brokers and the industry as a whole.
A broker with a good known reputation for handling client funds responsibly and releasing them quickly upon demand, will gain huge trust from the traders and the traders’ friends, whom he will bring over to trade with your company.
Note that at this point, most traders will care less about the broker being regulated as they have received transparent and reliable service from the broker and he knows he can count on and trust such broker.
The big problem… no differentiator
Now a days, the big problem comes from the fact that almost all brokers in the market look pretty much the same. They all have the same websites, the same trading platform we all know, the same offerings of basic trading courses, and even most of the brokers come with the same sales pitch.
The big differentiator usually comes in pricing- who has the lowest spread and not in quality of product or an added value of some kind.
Because of this, transferring funds between brokers is easy and the broker with the most attractive pricing will win.
This is a huge problem in creating loyal clients as there is nothing to make the client stick with the broker except low price.
The question now becomes what can you bring to the table which will be different and better than others; what kind of edge you can create over other brokers out there; what will be your differentiator?
The key is to differentiate your brokerage by providing real added value solutions and offerings, something most brokers don’t do.
The added value I wish to focus on is the trading platform you offer as this is the main tool and platform your traders use to execute their trades and can be your main positive differentiator in your traders’ eyes.
Unique trading platform – a platform that will provide a better user experience for the traders, not only by way of better charting and indicators, but a platform that traders will like to use based on its unique look and feel that will create the stickiness you need in order to keep you traders tied with your brokerage.
Note that an easy-to-use trading platform will outtake complex and multi-function trading platforms any day. 90% of traders are not looking for complex platforms as most of them are doing the same trading actions: simple buy and sells using some technical analysis and charts, nothing complex. Offering simple-to-use trading platforms that most traders like and other brokers don’t have will give you the added value you want in front of your competition. Remember… simplicity is key.
Additional added value can be provided by offering unique trading tools, reporting tools and monitoring tools for traders.
I’m less likely to recommend using EAs and trading signals as they have present a big problem – a few bad trades or a losing streak will make your trades leave you fast with a bad taste in their mouth, thus lowering your reputation in the market and bringing you less loyal clients.
Reliable service will be given to you clients by having your sales/retention representatives maintain a good relationship with the client. Good relationship with clients require maintenance and constant follow-up.
Let traders know you are there if they need you. Giving clients a call even if they haven’t traded for a while, letting them know you care, builds the relationship you need to have between them and your brand.
There is no need for your retention guys to talk for hours and hours with the same person as this is missing the point. A quick call that lets the client know you are keeping them in mind is enough to build a connection.
At the end of the day the best marketing practice relies on word of mouth and you can only reach it but building a strong loyal database of clients with whom you have a strong relationship.
So what to do:
- Provide good service and fast funds transfers – don’t mess around with client’s money.
- Follow-up with your clients on a regular basis – let them know you are always there… even if it sound super basic, most brokers don’t really do it properly.
- Provide an added value solution and platform. This can be done in 2 ways:
- Building your proprietary platform – the upside is that it will probably have some unique features. The downside however, is that it implicates massive costs – development, IT, months or even years of work until reaching the right outcome, millions of dollars in building a unique trading platform with the added value you want for your traders.
- Using a technology company – there are technology companies that already developed a unique trading platform and offerings, the upside is that costs are lower and can be implemented immediately, the downside is that some other brokers may use it as well.