8 key customer retention strategies to navigate the new age stockbroking
Authored by Prashanth Kancherla, Chief Product Officer, Ozonetel
The Indian stock market has witnessed a significant surge in investors, with the number of investors hitting 1.2 crores in the financial year 2022. Additionally, the Sebi Annual Report FY 2021-22 revealed that the influx of new investors onto the exchange was not limited to metro areas or big cities. What's particularly intriguing is that approximately 75 per cent of these investors are below 30 years of age. In this dynamic landscape, the expectations of new-age investors have evolved, placing a premium on trust and transparency in their interactions with brokerage firms.
In this article, we'll explore eight ways in which brokerage firms can make investing an easy, effortless and reassuring experience for their customers.
- Foster trust and transparency
Trust is a key factor in stockbroking. Gartner research reveals that 83% of consumers are reluctant to engage with a brand they do not trust. Investors place their trust in stockbrokers who demonstrate empathy, transparency, and proactivity in their interactions. Customers expect to make money with minimal risk. Therefore, it is crucial for a broker to set the right expectations using clear language and transparent communication.
Furthermore, the speed at which a brokerage firm understands customer queries and generates tickets plays a vital role in building trust. Brokerage firms bear the dual responsibility of not only building trust but also maintaining it in an online environment by ensuring data security, privacy, compliance, and delivering personalized and timely services. This empathetic, transparent, and responsive approach not only promotes customer retention but also appeals to new clients seeking a trustworthy investment partner.
- Speed up your response time
Given the volatility of the stock market, customers will always expect quick answers. Especially in customer service, timely communication becomes even more important while dealing with an irate customer. Many brokerage firms have built a model where they prioritize high-value clients and directly connect them with the right agents through skill-based routing, helping them get a quick resolution. It minimizes turnaround time (TAT) in responding to clients. For instance, if a dissatisfied client simply posts a negative review on social media, it becomes one of the strongest references for people. This can damage your long-term revenue opportunities. Therefore, stockbroking firms must implement a well-defined escalation matrix and strict turnaround times to provide a seamless customer service experience.
- Adopt a customer-centric perspective
Customer service should not just be restricted to problem-solving; it can be a powerful tool for enabling financial planning, cross-selling, and retaining customers. Consider the lifetime value of a customer, especially young investors with a growing income. So, they must align their customer service strategy with their long-term financial goals to engage, retain, and multiply their lifetime value. Hence, brokerage firms should perceive customer service as an engagement tool, not merely a channel for issue resolution.
- Proactively safeguard security
In today's digital age, as customers place their trust in a company, they naturally expect the assurance of robust security measures being in place. Modern stockbroking firms have a unique opportunity to leverage communication tools not only for client engagement but also to actively shield them against threats like phishing and fraudulent investment schemes.
Brokerage firms should implement two key actions: educating customers and initiating proactive measures. For example, if a company identifies a phishing email, it must have a mechanism to promptly notify customers, customer service teams, and relationship managers. Any necessary training or support for these teams should be immediately provided with the utmost priority.
- Align with customer journeys
According to a Morgan Stanley report, India is set to surpass Japan and Germany to become the world’s third-largest economy by 2027 and will have the third-largest stock market by the end of this decade. Previously, the customer base was limited to metros and tier-1 cities, relying on regional branches. Today, a younger, tech-savvy generation with higher disposable income is investing from various locations.
While planning their customer experience roadmap, brokerage firms should take into account different customer journeys including self-initiated, relationship manager-initiated, and robot-assisted. Brokerage firms must adapt by providing personalized services across digital channels while striking a balance between automation, and traditional relationship management. To thrive in this evolving industry, firms should identify their target customers, prioritize retention, and tailor solutions to align with their preferences.
- Strengthen customer relationship management
While digitalization is transforming customer communications, one-on-one relationship management remains crucial, especially for older investors. Skilled relationship managers who can effectively communicate and outline investment risks are essential. Empathize with customers, take ownership of resolving issues, and follow up diligently. So, it is important to have the right people at the right places, companies should hire relationship managers who can empathize with customers, take ownership of resolving issues, and follow up diligently.
- Empower your agents
A well-trained, empathetic team of customer service representatives and relationship managers is key to building trust and reassurance. Firms should encourage active listening, confirm their understanding of the client's problems, and provide firm timelines for resolutions.
To build transparency with customers, brokerage firms must also offer transparency to their agents. Especially when customers interact with a brand via multiple communication channels, the agents need to have a unified view of the customer whenever they converse with them. They should be able to see their entire journey and be able to stitch together their answers accordingly. If the agent is aware of the customer’s problem even before they answer the call, it gives the customer a completely different and better experience.
- Ensure availability & business continuity
IT downtime and data disruption can have a significant impact on business operations. Nearly 43% of organizations experience data loss due to IT disruptions, and about 25% of customers won't return after the first IT downtime. Depending on the business size and reputation, these disruptions can erode revenue and affect customer retention. They should have a robust CX platform to ensure round-the-clock business continuity. They should put in place various redundancies including telecom redundancy, to ensure uninterrupted customer service even in the event of a telecom network failure.
Handling high volumes and volatility requires an exhaustive knowledge management system. Quick queries can be resolved using FAQs, while complex questions may require call centre training or transfers between facilities.
Conclusion
In response to the influx of young investors and technological advancements, stockbroking firms are elevating their customer experience (CX). Trust and transparency remain paramount, but the landscape has changed.
Today's customers demand proactive communication, rapid responses, diverse digital service options, and more. Stockbroking firms must abandon a one-size-fits-all approach, focusing on tailored strategies that blend relationship management and digitalization.
Disclaimer: The opinions expressed above are personal and may not reflect the views of DSIJ.