3 Sustainable Marketing Strategies To Create Long-Term Profitability
Too frequently businesses miss one of the most reliable sources of profit – their current customers. Many brokers make their revenue primarily from transactions with an expectation of earning roughly the spread, on average over time. A valuable client is one who actively and regularly transacts, regardless of their ultimate P&L. Clients are expensive to obtain, the possibility of selling to an existing customer is between 60% and 70%, compared to between 5% and 20% for successfully winning a new prospect. Additionally, existing customers are most cost-effective to ongoingly market to - it costs three times as much to win a new customer as it does to retain an old one.
However, in a growth-driven society many businesses, especially in the FX industry, often concentrate on the new: new markets, clients, services.
Looking forward FX brokers should be starting to think more about how to ethically and sustainably use marketing to not only attract new customers but to retain their existing ones.
Relationship marketing is a growingly popular disciple that can be defined as fundamentally promise-keeping processes that aim to maintain and enhance the relationship between a business and its customers. The idea is that through strategic, long-term thinking and focusing on nurturing the relationships with customers, retention will grow and churn will decrease.
Each broker should always treat their clients with respect by providing a fair dealing environment as traders will, in the end, start to recognise when they are being treated poorly from tricks such as asymmetric slippage, skewing against limit orders and toward stops, unnecessary fees, etc.
Many brokers have unfortunately fallen into this trap only to see their account growth slow, volumes drop, and in the worst cases regulator fines accumulate. In the FX world, everyone knows that a bad reputation is the start of the end.
Therefore, it's paramount for brokers to define and communicate their offer clearly - then keep to actually their promise! Below is a list of three relationship marketing strategies that are essential to consider and implement to ensure long-term success for your retail brokerage.
1. Build appealing loyalty programs
Customer loyalty is a well-known outcome of relationship marketing strategies and can be defined as:
"an ongoing positive relationship between a customer and a business. It’s what drives repeat purchases and prompts existing customers to choose your company over a competitor offering similar benefits"
Several variables go into establishing a loyal customer base and creating an appealing loyalty program. Personalisation is a critical component of customer loyalty and should be considered when creating a loyalty programme as the more personal and relevant the benefit, the more valued it becomes. Such programmes which include personalised rewards and bonuses aim to build loyalty and inspire customers to remain to trade with your brokerage.
Be sure to leverage the multiple built-in functionalities of MetaTrader or other trading platforms to assign certain rewards automatically to successful traders which acting as an incentive to keep trading.
Although, building effective loyalty programmes isn't done solely through creating incentives. Instead, treating customers likes humans and nurturing the two-way relationship is paramount - ensuring that they aren't just discarded when they convert to a customer.
2. Invest in a CRM software
All businesses, not just FX brokers, encounter two main challenges, how to understand each customer’s individual needs and how to communicate effectively during the customer journey. Today’s world is about data and making valuable insight that lies within it available when approaching a possible lead.
A CRM (Customer Relationship Management) tool allows you to find, nurture, and convert leads to help you build stronger relationships with your customers pre and post-sale.
Communication and follow-ups are essential elements to think about when implementing relationship marketing strategies. The more you know about your customers, the more it increases the long-term value, helping to decrease churn by recognising patterns that reflect a significant decline of brand confidence.
Additionally, CRM tools allow you to automate your marketing efforts. This helps connect with your customers at all stages of the buyer journey, done through features such as chatbots and automated email campaigns allowing you to engage with the right customers instantaneously, at the right time.
There are many different CRM tools on the market, from comprehensive cloud-based solutions to smaller, on-premise software. Not forgetting some purpose-built solutions specifically tailored to the FX market.
It is important to explore the solution that best meets your brokerages' needs and works best for smaller businesses. Therefore, writing a list of features and specific functionality that will provide true value can help when completing due diligence. To start off, here is a list of top CRM’s tailored to FX brokers and smaller businesses.
Having an intuitive CRM is also imperative from a customer service standpoint as it will give employees on-demand insight into a customers history and satisfaction levels. Which brings me on to the last strategy...
3. Prioritize customer service
As the name implies, relationship marketing is all about positively relating to your customers which involves offering consistent, personal support from the outset. Ultimately, personalisation and communication increase the customer's loyalty by enhancing the customer's relationship satisfaction.
Customer service should be a focus in all aspects of your business model, as it shows that you care about the client’s needs. Simply employing friendly and helpful support teams isn’t enough in the current global business environment. A proactive and personal approach to customer service goes a long way in terms of customer retention.
Gratitude strategies are key to relationship marketing particularly within buyer relationships as they drive relational outcomes such as word-of-mouth and loyalty. Email is an effective channel to keep regularly in touch with customers as it allows you to easily connect. An easy way to re-engage and show gratitude would be by sending an email with a simple thank you message to your customers acknowledging your gratitude for their business.
Additionally, you can send customers a feedback survey to gain valuable insight into what your brokerage is doing right, and what it can improve on. Customers usually have no issue giving their opinions on things and as a brokerage, showing signs that you want to improve the experience for the customer is extremely powerful. A common, quick and easy way to gather feedback is through distributing an NPS (Net Promotor Score) survey, which is a critical focus for an increasing number of businesses who want to seek higher customer loyalty.
Creating high-quality customer service, however, can often be difficult to implement. Therefore, in every area of your operations, you should pinpoint and focus on all the potential customer service issues that might arise, and how you plan on handling them if they do.
Once you’ve compiled a list, create a protocol to address these main concerns, whether through email marketing, FAQs or another channel.
Taking a proactive approach to customer service will help your brokerage, in the long run, retain customers.
In today’s highly competitive business environment, FX brokers must think beyond the constant hunt for the new and focus on long-term and relational strategies.
Building attractive loyalty programmes, utilising an effective CRM platform and keeping customer service front of mind are all steps in the right direction to build quality relationships and retain existing customers to ensure the long-term profitability and success of your brokerage.