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Real Business #11 - Capital Currencies

Posted Friday, June 17th, 2011 by Neil Edwards

Real Business is a series of posts that analyses the marketing opportunities and challenges of real businesses in the South East. The interviews are undertaken by Keith Lewis of The Courier.

MOST people would probably regard the fast-moving world of money broking as an activity more closely associated with international financial centres like London, Tokyo, Hong Kong and New York - and to a large extent they would be right. However, advances in technology have come to mean that, provided you have the right know-how, systems and set up, it is possible to trade currencies, commodities and a multitude of their derivatives from almost anywhere you choose - including Tunbridge Wells. Capital Currencies Limited, owned by ex rugby player Craig Strong and his wife, does just that from its offices in Lonsdale Gardens.

Capital Currencies started trading in June 2004.  The company has been a success, but growing the business has proved be a slow process. Many of Capital Currencies' clients - typically small to medium sized businesses (SME's) exporting overseas, or expatriates living and/or working abroad, are attracted, first, by the keenness of the exchange rates offered, which are often better than those offered by the clearing banks. The rapid and friendly personal service tends to come second. Crucially, the company cannot, and must not, give advice to clients because it is not permitted so to do by the authorities. It is only authorised to transfer and remit money according to client instructions. Equally crucially, it cannot "take positions" in the market with clients' funds; i.e. it does not gamble with other people's money - a mistake that has cost other companies and their customers dearly in the recent past. Apart from being unwise, it is also illegal.

To say that Capital Currencies operates under tight controls would be something of an under- statement , especially after new European regulations came into force in 2009. Indeed, the company was paid a random visit by a team from the Financial Services Authority to confirm that the operation met all the financial and solvency requirements, that its anti-money laundering procedures were sufficiently rigorous, that the firewalls in its computer system were adequate and that its operating manual was legally compliant. Its systems are as tight as possible, right down to the point where clients receive a contract note and confirmation of payment as soon as transactions are completed.

Because of the obvious constraints, Craig Strong has had "a no marketing policy" from day one. The business has grown simply through referral and word-of-mouth and it is difficult to see how that could change. For example, it would even pose a problem to change the name to something more seductive - Capital Currencies may not ooze commercial sex-appeal, but, in line with common parlance, at least "it does what it says on the tin".

The main challenge facing Craig Strong remains how to create a global brand. He networks vigorously - the company is well known in London, Edinburgh, New Zealand and Australia - and the business is growing, albeit slowly. Cold-calling he has found not to be the answer. An acquisition could prove to be the only way to accelerate growth, but that, too, could be fraught with problems because any purchase would most probably be based on a valuation of goodwill rather than on bricks and mortar, or any other form of hard asset.

The Marketing Eye says:

To build his business and brand, Craig needs to develop awareness, understanding and trust. He needs more of his target audience to know about his business, understand what it offers and trust that their money is safe in his hands.

In the face of these challenges, a‘no marketing' policy makes no sense. To construct a marketing campaign that pays heed to all of the requirements of compliance and yet still has an impact on the target audience is perfectly possible. Indeed, given the need to establish ‘trust', the rigours of compliance can be positioned as a virtue and a strength.

Good PR should be at the heart of the plan. An ongoing series of mentions and articles in the press will raise awareness of
the business and enable Craig to dispel the myth that currency transactions are the sole domain of the banks. Advertising should also be considered and needs to be planned as a campaign spread over several months. Choosing the right publications to advertise in is clearly important.

Direct marketing should be in the plan too. To build a database of decision makers in businesses with import and export interests would not be difficult. A series of contacts then needs to be planned before the telephone is picked up. The calling can be an arduous and demoralising task, so outsourcing this might be considered to filter prospects with the most interest.

Finally, attention to the initial impact of the website would be merited. To establish understanding and trust, the
service needs to be immediately clear and the visual impression that of an established financial services organisation. This
doesn't require a large budget, just good planning and design.

What advice would you give to Craig?

Posted Friday, June 17th, 2011 by Neil Edwards

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