A major focus – and expense – of most brokerage firms is acquiring new traders in order to continue to grow their business. In this interview for Dukascopy TV, Andrew Saks-McLeod (CEO of Finance Feeds) and Bart Burggraaf (head of the London office of Media Group Worldwide) discuss the range of branding approaches that brokerages take.
On one end of the spectrum, a small firm is a major sponsor of a relatively unknown football team, which raises the question of how much of a return on investment this can provide. This attempt by the brokerage to legitimize itself in the eyes of potential traders is far more appropriate for a large company. Live events are a more traditional and high touch approach that can be very effective in markets that place a premium on the personal touch, such as Singapore, Switzerland, and Israel, especially when directed at an older clientele.
Widespread low touch marketing – often highly automated – aimed at bringing in a large number of smaller customers is the opposite end of the spectrum, and results in less risk to profitability from the loss of a single trader. While every firm would love to have only the 20% of traders that bring in 80% of the revenue, attempts to accomplish that usually result in simply a smaller number of the less profitable accounts rather than a larger number of the very profitable ones.
The interview concludes with a look at the controversial subject of geo-marketing, which presents privacy concerns but is likely here to stay on at least a limited basis.