Curious here - How much do the freebies, the free shares, cost FreeTrade in Marketing per month ? Does this strategy work well over standard marketing/advertising channels ?
How many are joining in just for sake of the free share and then closing their account ?
Itās hard for us to know.
We could estimate the cost of the average free share I donāt have a massive sample but I imagine itās in the Ā£3-5 range, potential doubled if itās from a referral.
The next thing we need to know is the retention rate (which you allude to in your post) how many of those users are are sticking around. This is hard to know in the short term and impossible to know in the longer term.
Iād would hazard a guess that Freetradeās marketing spend is actually fairly modest for the sector.
I think this strategy probably works well for a couple of reasons: it costs almost nothing until people try the app (with advertising you have the first hurdle of getting people to even install it). I imagine retention is higher because people are now invested and the referral system gives them an obvious point of contact to help guide them into the app/investing.
If you want to read more I suggest looking at Customer Acquisition Cost, it can really make or break startups. Without seeing Freetradeās accounts (and having a crystal ball for future retention) we can only guess.
The question is whether this is all worth it ā¦ once a free share in your pocket many users closing their accounts and off they go ?
How many Pro traders does @freetrade have, lets say those with a least Ā£10K in their account? Iād love to see more statistics on users and their savings/investments behaviours on the FreeTrade platform.
Me too, I think for now, alot of that information needs to remain private though, given the early stage of the company and letās face it, pioneering nature of what freetrade are doing at the mlment.
If they share too much, any new entrants can use that to their advantage.
I do think though that a good proportion of new sign ups remain actual customers and maybe perhaps 10% take up an isa? If thatās the case, the average freeshare Iāve received is just north of 3 quid so paying Ā£3 per month puts them in profit after just two months.
As you say more data needed to analyse properly but probably not wise to actually share it outside freetrade just yet.
And Ā£3 for a sign up is really low as customer acquisition costs go. A well crafted Google Ad (at the top of the search results) will cost more than that and thatās just for a customer to speculatively click through to the site - not even for a sign up. Even if the customer retention rate is low (and those cashing in/closing their accounts after the free share might be pushing that figure lower), ~Ā£3 per sign up is still something that a lot of other businesses might be very jealous of.
Great points. Thank you.
What I personally love about @freetrade is that it communicates and listens to its clientele - it is placing its users right at the forefront of its technology. As such, users feel very much part of FreeTrade whether as investors or users of its platform.
I have been with H&L for many years and it is really lacking in this area.
I opened a LISA with AJ Bell a couple of weeks ago and itās been a total **** show compared to Freetrade. As someone whoās ātotally new to all thisā I was really surprised to find out that an established brand like AJ Bell was so far behind Freetrade when it came to customer service, stock price updates and communications.
I agree, but itās also worth bearing in mind that for alot of cases there will be ad spend (Google, FB, Twitter, etc) on top of this. I know for sure that I was targeted on Twitter for instance numerous times before I decided to go with Freetrade (after nearly opting for a competitor).
Would I have gone with Freetrade if it wasnāt for the free share?
As a number of rivals also provide this offer, perhaps not, so there would have been an opportunity cost without the free share, as I imagine is the case with many others. For the record, I got a Boohoo share which was promptly cashed out 2nd July. (Donāt care for fashion)
Great feedback - thank you. I think what @freetrade now needs is someone to take on a role of āHead of Investment Analysisā HL, ii and AJ Bell all have them - top commentators, I know them all ā¦ not sure if FT have someone like this who writes top articles each week on the economy, investments etc. As it seems that many FreeTrade users are āplayingā the market field rather following an investment strategy and fully understand the risk/rewards associated with them. Iām I being fair ? Just some ideas to take it to the next level and to compete with the big boys. I want to see FT succeed.
Smart move on Boohoo - I would not support it! Glad to hear youve sold it.