Growing Fast or Dying Slowly? 3 Misconceptions About Churn Rates

FinanceFeeds Editorial Team

The first mistake that brokers make when looking at their churn rate is taking churn rate as a given rather than as an opportunity. 

Forex brokers spend millions acquiring new customers, yet customer retention is the defining factor that separates market leaders from their competitors.

When most online brokers think about accelerating growth, their first instinct is to invest in customer acquisition. While customer acquisition will always be a core driver for revenue growth, customer retention is often the neglected component. As a company that has invested a great deal of time, resources, and money to acquire a new customer, it is imperative to maximize the CLV to avoid the revenue headwinds caused by churn. 

Though the typical FX customer journey may lead to its inevitable outcome, the CLV is far from defined. The tendency of Forex brokers has been correlating P&L for a trader’s experience instead of taking a holistic view that each interaction has an effect. Consider the typical customer journey in which a trader experiences losses – at this critical juncture, a broker will define their customer experience. The most innovative firms use these critical moments to create opportunities for engagement and retention, thereby fulfilling all elements of the trader experience. 

The most relevant aspect of the customer experience after onboarded is their actual trading. By classifying “trade behaviours” through Behaviour Segmentation, one can provide customer-specific resources such as client education services, trading tools, premium news, and volatility alerts at precisely the right time! This customer-centric approach defines customer experience, and this personalization ultimately drives CLV.

The second mistake that brokers make when looking at their churn rate is using churn as the only measure of the customer experience; a broker will always be six months too late to influence the future.

Historically, customers have expected basics like quality service and fair pricing, but today customers have much higher expectations such as proactive service, personalized interactions, and connected experiences across digital channels.

Delkos has developed analytics and accompanying metrics to provide behavioural insight into the customer experience. Utilizing these insights allows a broker to anticipate and create opportunities before it’s too late.

The last mistake that brokes make when looking at their churn rate is to view churn as a simple metric rather than as an indicator of behaviour. Before you can find the right answers, you must ask the right questions; utilizing Delkos analytics and metrics will lead managers to ask the right questions. “What are customers doing that contribute to their churn?”, “How can we better manage customer relationships to enhance the trader experience?”. Dissecting the meaning behind the numbers will help you determine strategies moving forward.

As we know, customer experience will always be defined by the customers’ perception of how your organization values them. In many respects, it also determines if your firm is growing fast or dying slowly.

To learn more about how your brokers churn rate can determine growth, contact Delkos [email protected]

Read this next

Institutional FX

Tradeweb’s trading volume hits $23.2 trillion in November

Tradeweb Markets, the operator of electronic marketplaces for rates, credit, equities and money markets, has just reported its aggregated trading volumes for November 2022.

Executive Moves

CAPEX.com hires Vikas Lakhwani to join MENA business

Multi-licensed broker CAPEX.com has appointed Vikas Lakhwani as its general manager for the Gulf Cooperation Council (GCC) region.

Retail FX

Swissquote secures CySEC licence as crypto business grows

Swissquote Group, Switzerland’s provider of online trading services, has received approval from CySEC to operate as a market-making Cyprus investment firm.

Institutional FX

Moscow Exchange still enjoys solid market making volumes

The Moscow Exchange, Russia’s largest exchange group, released its monthly batch of trading volumes and metrics for November 2022 – the latest readings showed flat performance across the board for multiple segments.

Inside View

The Year-End FX Turn: To Everything There is a Season

By Paul Houston, Global Head of FX Products, CME Group

Crypto Insider

A Wrapup of zkSync x Bitrue’s “Ask Me Anything” Session

In another edition of Bitrue’s AMA on Twitter Space, Bitrue invited a special guest from the company behind the creation of zkSync, Matter Labs. Marco Cora, Head of Business Development from Matter Labs, joined the session to give listeners a rundown on what’s up with zkSync.

Technology

New Features, Upgrades, and Improvements: B2Broker Launches Big Update of Its Flagship CRM System B2Core

In a massive update for its flagship product, B2Core, B2Broker, one of the leading providers of liquidity and technology solutions for brokers and exchanges, has released new features. Enhancements in the update include the following to provide clients with more features, flexibility, and security:

Industry News

Will SEC v Ripple end come too late for crypto industry in the United States?

SEC v. Ripple Labs has entertained the digital asset industry ever since being filed in 22 December 2020. Nearly two years in, both parties have addressed the court to pursue a summary judgment in order to avoid going to trial.

Inside View

Outsourcing: The Key to Improving Your ROI

Gen Z, the second generation of digital natives, has already set out on its path to wealth creation, participating in the financial markets and inspiring Generation Alpha to follow suit. The current and upcoming generations of investors are increasingly looking for cutting-edge technology to aid their decision-making process. As investor demographics change and the markets become increasingly global, brokers need to evolve their ecosystem to stay a step ahead. This is the only way to survive the rapidly changing markets.

<