FX & CFD trading is an incredibly competitive global marketplace. Traders often have multiple accounts with different brokers and lack loyalty to one single brand.
Rising acquisition costs and a lack of differentiation in market is leading to a potential new phase for broker’s marketing and product offerings.
Rewards programs offer Forex and CFD brokers with a new tool to curb client churn and extend the lifecycle or existing traders.
Let’s look at why retention is a focus for brokers and how rewards can be an integral part of brokers strategies.
Expensive Acquisition Costs
Following a digital acquisition strategy across networks such as Google, Facebook and leading finance industry websites such as Bloomberg and Investopedia can quickly take your acquisition costs from $200 per client to $2,000.
Supporting this with the nurturing service needed to onboard clients creates an expensive proposition for building a consistently strong and client base.
With the old-fashioned mentality of ‘churning and burning’ clients clearly on the way out (as The Times have earlier stated), FX & CFD brokers can focus their attention on retention as their key to growth.
Why Client Retention is the Answer
You can pick from a range of studies, but in the end, you’ll find it costs anywhere from 5 to 25 times (Harvard Business Review) more to acquire a new client than retaining an existing one.
This makes total sense. You don’t have to find 100% or more new clients to replace the constant flow of clients leaving your company. Instead, focus on incremental growth in your retention rate.
Further studies show that an increase in retention rates by 5% increases profits by 25 – 95%.
Retention is Key
Rewards programs are proven to enhance retention rates in a wide range of industries such as retail, aviation and specific for brokers – finance. Not only do they enhance internal metrics, clients love rewards and are increasingly expecting them.
- Accenture – “Members of loyalty programs generate between 12% and 18% incremental revenue growth per year than non-members.”
- Nielsen – “66% of European’s say they belong to one or more loyalty programs.”
- Roy Morgan – “71% of the Australian population are members of at least one loyalty.”
Integrating Rewards with Carrots Plus
Carrots Plus Rewards Technology allows brokers to integrate a rewards program into their client facing channels with ease.
Brokers can issue clients with points for trading on products such as forex, indices, cryptocurrenices, commodities and more. Brokers can also create their own and select from inbuilt rewards to offer their clients.
This is a white-label rewards technology solution allowing brokers to create their very own branded rewards experience for their clients.