Grow up fast or die slowly? 3 misconceptions about churn rates
The first mistake brokers make when looking at their churn rate is to view churn rate as a given rather than an opportunity.
Forex brokers spend millions to acquire new customers, but customer retention is the defining factor that separates market leaders from their competition.
When most online brokers plan to accelerate their growth, their first instinct is to invest in customer acquisition. While customer acquisition will always be a key driver of revenue growth, the customer retention is often the overlooked component. As a business that has invested a lot of time, resources, and money to acquire a new customer, maximizing CLV is imperative to avoid the revenue headwinds caused by churn.
While the journey of a typical FX client may lead to their inevitable outcome, CLV is far from defined. The tendency of Forex brokers has been to correlate the P&L to a trader’s experience instead of taking a holistic view that every interaction has an effect. Consider the typical customer journey in which a trader experiences losses – at this critical point a broker will define their customer experience. The most innovative companies use these critical moments to create opportunities for engagement and retention, fulfilling all elements of the trader experience.
The most relevant aspect of the customer experience after onboarding is their actual trading. By categorizing “trading behaviors” through behavior segmentation, one can provide client specific resources such as customer education services, trading tools, premium news and volatility alerts at the right time! This customer-centric approach defines the customer experience, and this personalization ultimately drives CLV.
The second mistake brokers make when looking at their churn rate is to use churn rate as the sole measure of customer experience; a broker will always be six months late in influencing the future.
Historically, customers expected basic principles like quality service and fair prices, but today customers have much higher expectations, such as proactive service, personalized interactions and connected experiences. on digital channels.
Delkos has developed analytics and accompanying measures to provide behavioral insight into the customer experience. Using this information allows a broker to anticipate and create opportunities before it is too late.
The final mistake thugs make when looking at their churn rate is to think of churn rate as a simple measure rather than an indicator of behavior. Before you can find the right answers, you need to ask the right questions; using Delkos’ analytics and metrics will lead managers to ask the right questions. “What do customers do that contribute to their churn rate?“,”How can we better manage customer relationships to improve the merchant experience?“. Dissecting the meaning of the numbers will help you determine strategies for moving forward.
As we know, the customer experience will always be defined by customers’ perception of how your organization values them. In many ways, it also determines whether your business is growing fast or dying slowly.
To learn more about how your broker churn rate can determine growth, contact Delkos [email protected]