One of the most persistent challenges in every broker’s operation is customer retention.
Why? Because even the slightest change can have a dramatic impact on how your business performs, from profit, margins, and even branding.
Defined simply as a means of retaining or holding onto customers over a period of time, this concept differentiates brokers in the financial services industry, separating the cream from the crop.
Why Customer Retention Matters So Much
Customers will remain loyal to their favorite brands, but only if the brand itself will provide an experience worthy of that loyalty.
It is no secret that retaining a customer is cheaper and more beneficial than seeking a new one. According to a recent study from Bain & Company, retained clients spend on average 33% more per order than new ones.
The study also found that increasing retention by just 5% results in a minimum 25% monthly increase in profit. Now that’s a game changer.
In an attempt to adapt, the industry has seen no shortage of loyalty programs being rolled out in recent years, given the high correlation to client spending habits.
Indeed, members of loyalty programs spend approximately 12-18% more per year than other clients, per a Vivendi study.
But is it enough? given the high degree of industry churn, probably not.
Intuitively, customers tend to hold brands they are loyal to in higher esteem and trust. In the retail brokerage space, this bond is extremely important.
For this reason, brokers are investing large amounts of resources in customer retention, as one of the most pertinent to operations and growth.
How to Best Maximize Customer Retention
For many brokers, it is not identifying the importance of customer retention that is the issue, but rather achieving it in a meaningful scale.
Clients are extremely demanding of brokers or any financial services venue these days. And their experiences can be irreversibly damaged by even small elements of a wrong interaction.
To win this race, brokers must be cognizant of exploring specific channels to help drive customer retention, instead of overloading clients with futile or misguided efforts.
Brokers who aim to improve their customer retention need to start with marketing tools and capabilities that help them optimize every engagement with their customers, delivering exceptional service and building loyalty.
Never Lose a Customer Again
Some of the most effective tactics include pop-ups, which have proven to be highly effective and capable of driving increased engagement.
Some pop-ups can convert up to 40% of website traffic into subscribers and leads. Personalized, contextual, real-time pop-ups increase the effectiveness of the call to action to over 90%.
Up until now, the best avenues for customer retention were email marketing, along with social media. But many venues have taken a step forward, automating and personalizing different notifications.
Other channels are claiming their place as technology advances, enabling real time interaction and personalization.
Ultimately, personalizing every customer engagement in real time should be a must for every trading company. This has been repeatedly proved in numerous research and articles.
To do so, a data-driven customer engagement platform is essential in creating a contextual, relevant and positive experience for the customers, driving conversion rates, and reduce churn.
Personalizing Every Touchpoint is Key
How will you adjust your strategy to keep more of your existing customers? Can you utilize your data and content to keep people interested and engaged?
Can you automatically personalize every engagement your customers have with you?
Can you interact with customers when and where they actually are looking for it?
Every broker needs to answer the questions above and explore all facet of their business and consider how a focus on retention could make a difference.
One company that specializes in this space has been Solitics, which has built a name as an industry leader in helping trading companies optimize their retention efforts.
Solitics automates data driven, personalized marketing processes, while significantly reducing operational cost efforts and increasing effectiveness, to drive conversion, retention and LTV.
To learn more, please visit solitics.com and set up a demo to see what the company can do for you and your retention efforts.