Spread bettors are a fickle crowd, always bouncing from one spread betting company to the next.
An interesting note on the loyalty of your average spread bettor from Edison Research.
Spread betting companies, it seems, are constantly having to innovate and pay a great deal attention to their clients.
Because if they don’t these clients will just move on.
Why can’t this be the case for all markets? Imagine if the energy market was like this!
Edison say:
“Customer life cycle Spread betters are a fickle crowd. Many become active when particular news flow or markets are grabbing attention (eg gold in 2010) and they lose interest thereafter.
“Others move rapidly between providers driven by price, sentiment and ease. WS advises that the average active period for a client is only nine to 12 months during which period the typical profit for an unnamed spread betting provider is c £3.5k (range typically £2.7-4.0k) and monthly trades c 90-100 (somewhat higher in some overseas markets).
Given the high marketing spend to gain customers, profitability can be materially improved if this life cycle can be extended, even just for a few months.
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