FX firms may have to rethink sales methodology as BT launches new service to block cold callers

Are the days of acquiring customers via sales calls numbered?

During the past two years, high touch methodologies have always provided the best results for most retail FX companies, however this applies to maintaining relationships with existing customers, rather than selling to new ones which have never had a relationship with a specific firm.

Indeed, only iFOREX (a company with a $100 million annual revenue) and Plus500 which took its market cap as a publicly listed company to $1 billion in the height of spring last year, have managed to drive their businesses to success via a low-touch business model with absolutely no contact with new customers, instead favoring the digital marketing and media buying approach.

Whilst it is most certain that, within the retail FX sector, which is very different indeed in terms of how customers are approached from the binary options sector, customers will continue to expect continual engagement with the brokerages and ancillary technology firms that provide their services.

…But what about the initial sales calls?

Unsolicited sales calls are the bugbear of many British households, and British customers have long been favored by many retail online trading companies as the nation is a very prominent and populous region for trading, perhaps being one of the largest markets in Europe, especially within CFD and spread betting, the nation having its own ecosystem, comprising very large, publicly listed companies using proprietary platforms for that specific purpose within the domestic market.

Today, telecommunications giant BT has dealt a blow to all firms wishing to target British customers by use of unsolicited phone calls, for example, by calling leads which have been uploaded to the CRM of firms for the purposes of onboarding new clients.

BT is preparing the launch of a free service for private customers which will prevent cold callers from getting through to their domestic telephone lines by diverting the cold call to a junk voice mailbox.

According to BT, this new system will proactively detect cold callers, without them actually having made a call to a specific household telephone line previously, by automatically conducting research on firms making large volumes of telephone calls.

The result of this is an intention to divert approximately 25 million unsolicited phone calls per week, meaning that those firms buying databases of leads to call will find it extremely difficult to make even initial contact with a potential client.

With the current acquisition cost of a new retail FX customer being approximately $1000, and a new binary options retail customer costing around $700 to acquire, the model used in many call centers which is already expensive due to staff costs, real estate, and remuneration among many other factors, is likely to become even higher unless the model is adapted to bear in mind this new virtual brick wall.

The new technology will analyze live data in order to identify telephone numbers which make a lot of cold calls, whether from a mobile phone or land line, and then customers can actually listen to any messages from the junk inbox and review them, rather than directly answering a phone to an unsolicited caller.

An exact date has not yet been provided for the scheme launch but BT has stated that it is likely to be towards the end of 2016.

Initially, it will only be available to BT landline customers who opt into the scheme, so not those with a mobile or business account.

Ironically, back in 1992 when I was an apprentice at BT programming PBX switches and configuring CISCO routers for networks for trading desks at banks, during the days when the firm used to provide outsourced technology solutions to banks and other financial services providers, BT used to categorically tell retail customers who did not want to be contacted that BT owns the telephone line, and therefore it is BT’s choice whether to call or not. Those days (thankfully) have clearly long gone.

In light of this, FX firms wishing to target British customers may have to adopt a similar method to that being used in Japan by veritable giants such as GMO Click and DMM Securities, in that they use digital methods for onboarding clients as cold calling is illegal in Japan, but once a client is on board, the firms maintain very close contact with their customers in terms of providing customer service, news, analytics and other services via telephone and via electronic media.

Interestingly, Japan has the highest level of customer loyalty among its retail FX traders and their respective choice of FX brokerage than any other country in the world. QED!