Importance of Sales to Forex Broker’s
August 28, 2016
A forex broker should be viewed as an entity that gives traders access to the forex market in exchange of a commission. This is the very definition of a broker: to intermediate the trading process via offering the best possible conditions for traders to succeed.
For this reason, it is in any broker’s interest to have active traders, not necessarily successful ones. An active trader is one that trades constantly, opening and closing positions all the time, thus the broker makes a lot from commissioning such a trader.
A successful trader
A successful trader is not necessarily one that trades a lot. If the time horizon for the opening trade/trades is longer, or the analysis and reasoning for a trade comes from a bigger time frame, then keeping positions open all this time while not opening others would result in a low income for the broker.
However, a broker should strive to have as many traders possible, no matter their trading style.
Advertising Forex Trading
Because forex trading is advertised as being an easy thing to do, it appeals to one of the trickiest human nature characteristics, a broker should always concentrate on countries were the broker is heavily marketing, furthermore the broker should also focus on customer concentration, to which the analysis of the major concentration of customer’s registration should be pursued by taking advantage of marketing to that region.
But this results in a fierce competition among forex brokers and in order to succeed in attracting both active traders as long as longer term horizon investors, a broker can use many tools destined to accomplish this goal.
The classical telemarketing
The brokerage invests in such a process mostly to build a customer’s database when starting the business. With a big enough database (trader’s names, emails, phone number if possible), concrete marketing campaigns can be used to transform those names on the traders list on actual customers.
is the next logical step as bulk campaigns can be sent highlighting the brand or simply having a strong sales campaign (for example offering a strong incentive when signing up, like a welcome bonus). While this is a classical tool to gain new clients in any business line, lately it is being used with great success due to the progress made in the online email marketing business overall.
Even establish brokers have sales campaigns and they are destined to increase company’s income level in less active periods. For example, summer trading tends to be avoided by traders as most of the times the month of July and August are characterized by ranging markets.
Therefore, traders tend to avoid trading as much as possible during such times and with August being a holiday month, incomes are not being generated at the same level on the broker side.
In order to avoid that, brokers launch different promotional campaigns trying to attract new traders or to increase the trading volume of the current ones.
No matter if a new broker or a well-established one, sales are a very important tool brokers use in the fight for as many traders possible.