The sales department is one of the most important functions of any business, as it is the first client-facing aspect of the firm and the one in charge of bringing in the revenue. Difficulties in sales need to be faced by companies operating in all types of markets as mistakes made in this area can be fatal to businesses.
In order to shed light on the problems faced by online retail FX brokers with regards to sales, Forex Magnates interviewed the co- founders of Karinza, a firm specializing in this field.
Before founding Karinza, Karin Zalcberg was a VP of Sales for xForex and VP of Sales for eToro. Prior to founding Karinza, James Azar was VP Of Sales at DMD Online, VP of Sales for HFX and Sales Manager for TraderXP.
Together, Karin Zalcberg and James Azar have over fourteen years of combined experience in the FX and binary option industries and over twenty years of combined experience in telemarketing and sales.
Please describe your experience working in the Forex and binary options industries.
Karinza has been operating in the FX and binary option market for over four years having served over fifty brokers in helping them establish professional sales teams across the globe. Karinza specializes in sales and marketing mentoring and sales and retention training, including evaluating sales team and building call centers from scratch for FX and binary option brokers.
From your experience, what is the number one problem with the way most binary options and Forex brokers operate?
One of the main challenges with brokers today is the lies and mistrust created by their sales team. The challenge begins with a broker not noticing what their sales team are saying or worse, ignoring what is being said by their sales team to the customers where the sales person misrepresents the truth to the customer. The lack of oversight from the broker itself and the regulator only add to this issue. This very issue creates a bad reputation for the industry as a whole. This can lead to customers getting a bad impression of the industry and its integrity.
Can you share some examples of lies you have heard from salespeople?
Some of the most common lies are: “We are working on being regulated,” or “We are currently regulated by the EU,” while no such regulation exists. Another all too common of a lie is not explaining the bonus terms and conditions which leads to misinformed and upset customers (This is the main complaint to regulators). Not explaining the withdrawal policy or claiming withdrawals are done the same day or within the hour. Not explaining the entire procedure or AML rules.
Another common lie is “We make our money from the banks who we sell the options to.” This is the explanation some sales people give customers when asked how do you make money, rather than explaining that the broker makes money from the volume. Another lie is “We will send you a contract for trading,” when no such agreements exist with the broker.
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It is to be noted that both of us started as sales people and did the job the sales representatives are doing today and excelled in our roles without having to boldly lie to customers.
Why would that work against the interests of the brokers?
This works against the broker in many aspects, the first is the bad reputation spread across digital forums on the internet. Additionally, some customers have taken up legal action against some brokers. Brokers invest hundred of thousands of dollars in marketing their brand only to have to use part of this budget to fight these complaints on the customer’s side via Search Engine Optimization and other marketing channels leading them to waste money to combat this rather than invest in furthering their brand.
How can brokers prevent sales people from getting them into trouble?
As stated above, this is easily preventable from the broker’s side with the proper oversight of the sales team. Everything begins in managing the sales team and sales manager correctly, training the sales team to properly answer customer’s questions and provide the correct information. Review of all calls made and enforcing, training and correcting any mistakes made by the sales team. Rewarding the sales team not only for their sales but also for the lifetime of the customer and their customer service score. The final solution is random customer service surveys to their customers and consistently evaluate the service the customer receives.
Are there regulators that require the use of such client protection methods?
Currently we are unaware of any regulator other than the NFA requiring such protection, most require a record of the conversation with the client, however no regulator has oversight and/or random testing of the broker on a regular basis to ensure the proper consumer protection such as the NFA, where consumer protection is at its highest level currently.
Why should a broker establish itself in a market with harsher regulation?
Many brokers enter this market for the long-term and realize the great potential this market offers them and entering a market with harsher regulation tends to provide the consumer an additional layer of protection and comfort where they feel more comfortable to increase their investment amounts and work over the long-term with their brokers. This will only help these brokers build their brand and business correctly ensuring they are in a healthy business environment.
What is the main obstacle for CySEC regulation from being respected in Europe in your opinion?
CySEC has shown since the banking crisis that it’s tightening its grip on the brokers under its jurisdiction, however, many see it as too little too late. In order for CySEC to be taken seriously, it must enact more consumer protection rules with its brokers and set clear guidelines for methods of communication with the customer. This not only protects the consumer but also the brokers from fraudulent customers who wish to manipulate the broker.