If the 1990s was the era of the call center and the automatons that inhabited it, today is the day of sophisticated relationship building across the entire FX industry , and long may this develop further.
The end of the last Millennium. Anodyne offices with movable divisions, magnolia walls and slogans printed on colored card hanging from the ceiling representing a kind of subliminal learning-orientated method of instilling the company ethos into batteries of sales staff, connected for seven hours to their CRM via a voice-over-internet-protocol (VOIP) telephone system that predictively dials retail customers from leads generated by acquisition campaigns.
Back in 1991, when I entered this industry as an apprentice Cisco Systems engineer at British Telecommunications financial technology division (now known as BT Radianz) which provided connectivity and outsourced managed system infrastructure to trading desks and banks, the development of telephony and integrated CRMs which allowed predictive dialing were prevalent.
Graham Technologies in Scotland was one particular example. The company produced the GT-X system which connected VOIP to the SQL database of customer records that BT held on behalf of several financial institutions in order that several floors of call center blandness at the firm’s Bristol headquarters could make and receive calls without touching a button, or without independent thought from the written scripts that were presented to the sales and retention staff that handled calls relating to all manner of aspects from all manner of financial institutions.
The 1990s, then, was the era of the cold calling revolution, and the ensuing characterless customer experience presented by automatons.
Those days, thankfully, are gone.
Last week, I was approached by a senior FX industry executive from Australia who had an interest in how to engage derivatives traders electronically, and had been having a long drawn out argument with a marketing guru that money management firms should hire risk quants to extract value out of client exposures (client profiling) and BBook rather than attempt digital marketing via SEO or generation of new web pages or making lead-based col calls, as this is expensive and becoming ineffective.
This particular executive, whose background spans many large international FX firms, considers marketing to be a requirement but places more emphasis on a better value back end, which in his opinion was spured by the recent hiring by AxiTrader of ex CMC Markets executive Louise Copper to go global, causing him to question ‘What can he produce for AXI that no other FX margin broker isn’t already doing’?
My opinion on this matter is that so many companies attempt marketing exercises and only two have managed to master that – thosebeing iFOREX and Plus500.
The remainder of successful firms in proper regions have very high-touch client facing models and a sales and service team that are highly experienced. For example, if you call CMC Markets in London, and go through to their customer facing team, youll be answered within seconds and get a very detailed and properly thought out answer to any question by very experienced professionals.
I believe the same to apply to Hargreaves Lansdown (HL Markets which is an IG white label). So many times, marketing people come to firms and tell them that they are the next best thing, and that they don’t understand the long tail searches and the SEO and how online media works. Most of this is frankly nonsense and perpetuated by young Millennials who inhabit coffee bars and have no work ethic. Good traditional industry knowledge and high-touch relationships with quality customers is the only way to survive in a very competitive retail market today.
As far as other engagement tools such as social trading are concerned, we live in a very post-social trading era, where every firm has been offering it in one form or another for many years. it is of mixed virtues. New innovations which have gone further toward catering for the very automated modern world in which traders are self-determining include Tradency’s RoboX if maintiaing client interest is the purpose for using it.
This system chooses new strategies automatically based on big data collected over 10 years by Tradency, and switches clients to new strategies to suit their style if they start losing itnerest or if the market changes and they start losing..
Going back to the B Book question, there is nothing wrong with doing risk management by operating a B Book, as long as the broker doing so has a live price feed from a prime brokerage and is executing according to the correct prices.
In such cases, B Booking can mean no exposure to negative balances in times of high volatility and very quick order execution rather than waiting for a bank to decide whether it will fill or not, or waiting for a bank to do a last look (especially these days when banks do not want order flow from small firms so they tend to do a lot of last look on it).
This is absolutely relevant, and brokerages would have their time better used by researching and engendering better relationships with experts in this field in order to create a transparent and high quality environment which will retain customers due to its effective execution method and inbuilt customer care that negates the need for calls to convice potential customers to convert.
For this, Id talk to Jeff Wilkins at ThinkLiquidity – he is a brilliant risk management expert. If you want to talk to bridge experts and are goin the MT4 route, then you should talk to Gold-i, PrimeXM and oneZero. They are experts in liquidity management and are the only three real contenders in this particular market.
Speaking today with a very experienced institutional FX industry executive, when posed the question as to whether cold calling is dead, he explained “That is a very tough question because all relationships start with an introduction of some kind, therefore it depends which part of the business.”
“It is very hard to say as I am looking to start a relationship and not to take the feed that second, and it depends what the end goal is. If it is to set an appointment then no as it is kind of stage one of the sale. However, if it is in the retail sector, then cold calling is nowhere near as useful as it used to be but then again, just look at the number of lists that are being churned which shows that it is still in use but there is only a finite level to which this can go” he continued.
Knowledge and experience of course is vital – this is something of a major point for me, in which I have the utmost respect for the professionals and leaders in this industry who have gained their astute and detailed knowledge via continual commitment to their careers, the majority finding extreme satisfaction in the quality of their work. This applies to almost every single executive that I know and have the great pleasure of interacting with on a daily basis from London to Sydney to New York and Chicago.
The people who lead this business are as equally interesting as the technology behind it and the electronic financial markets structure that they take their instrumental part in furthering.
For the past 25 years, I have spent a considerable amount of time maintaining my relationships with everyone that I have met along the way, which in my opinion is priceless.
Creating a very illustrious image is either the route to the absolute top, or an expensive white elephant
This shows that simplicity, uniformity, ease of transfer from one product to another without requiring familiarization is paramount. In the world of trading platforms, where electronic execution is taking place at a fraction of a nano-second, familiarity absolutely does not breed contempt, indeed familiarity engenders security and peace of mind.
The vast majority of highly advanced electronic trading firms in London, all of which have their own very sophisticated trading infrastructure ranging from proprietary platforms with ultra-high tech user interfaces, to in house, secure and ringfenced servers connected to the live markets via constantly maintained secure network infrastructure, also offer MetaTrader 4 for those international clients that want the quality and industry experience of a British firm, mated to the familiarity of the platform that they are used to.
Dukascopy is a very interesting case in point here. A visit to Dukascopy Bank SA’s Geneva headquarters is an exercise in magnifying the difference between the mainstream and the specialist. Dukascopy commits most of its time to developing its very own systems, the JForex platform, an instant messenger service, a Swiss banking license, inhouse servers and infrastructure, and perhaps the most incredible, highly polished television studio facility with some of the highest level of attention to detail I have ever seen from any production staff anywhere worldwide.
The result? Tiny annual profits and very little global market share. The relationship aspect of the business is non-existent outside of Switzerland, and the branding aspect is non existent outside of Russia and the CIS countries where it has a small amount of loyal followers.
In Switzerland, Dukascopy holds monthly events, however the emphasis is on fashion and luxury (it is at the prestigious Four Seasons Des Bergues Hotel after all!) with token references to Dukascopy platforms on display stands in the corner of the room whilst models strut down the catwalk displaying the latest $70,000 jacket to a Russian audience. This proves that it is still a relationship business rather than a cold calling exercise even at niche level.
Blake Harber at Lucid Software has a very specific and outspoken stance defending cold calling, however. “Lucid Software our team has been proving that cold calling is very much alive. We used to love our email only campaigns but have recently taken a more blended approach of social selling/email/phone” he states.
Mr. Harber claim that compared to the last month, Lucid’s sales team increased Dials by 352% across entire team, passed 300% more leads to a total of 168, and created 203% more opportunities.
He states “It’s a plague that has affected too many sales organizations. The plague of social selling & email only strategy. I’m sick of it. I’m sick of hearing about it. So, here are a few prescriptions to cure the plague if your team is suffering from it.” Yes, Blake. But they are only opportunities and dials. This is a very outmoded model that turns organizations into numbers game-obsessed mass closers of deals instead of high quality firms that engender client and supplier relationships and value them, marking themselves out as industry benchmarks and leaders.
The executive team at the vast majority of firms knows and has good, longstanding relationships with those at all other firms, yet the majority are offering the retail customer a similar experience via a similar platform with similar corporate prowess and experience. These are the successful companies.
Those which have a niche product and an idiosyncratic image or approach, yet have fostered no relationships outside their existing circle, are the ones that have not managed to gain global traction and whose executives are not perceived by their peers as industry leaders and pinnacle figures.
Think of a pinnacle of the industry and the real leaders that come to mind are those whose entire company builds itself on maintaining relationships with other firms in the business, whose product is not confusing and has a degree of warm familiarity, and whose regular appearances are always welcomed at events and conferences.
Despite its online nature. This is not an online business in terms of its ultimate success. It is a relationship business through and through – and in my opinion, long may it remain that way.