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IN-DEPTH 19 November 2015
How to keep hold of customers
Julian Rogers presents expert guidance on the increasingly sophisticated workings of online gaming retention
By Julian Rogers

Esteemed marketing author Philip Kotler once declared that acquiring new customers costs five to ten times more than satisfying and retaining existing clientele. In a nutshell, keeping a firm grip on your patrons and earning their loyalty is imperative. For online gambling operators, user acquisition has long been an expensive endeavour, especially when fickle, price-savvy customers can easily have their heads turned when operators flutter their eyelids and lay out the welcome mat, accompanied by juicy sign-up bonuses and other perks. Rival websites or apps are merely a few mouse clicks or screen taps away, which means smart, targeted CRM and customer retention continue to be vital in the fight to reduce churn rates, foster loyalty and prolong players’ lifetime values (LTV) from the moment they take the plunge with their first deposit.

“Because this is a saturated market with tough competition, pretty much everybody has a high level of player management techniques,” says Hybrid Interaction founder and CEO Shahar Attias, “so it’s very unlikely someone could introduce you to a concept you haven’t heard before and haven’t tried before. CRM is endless work that needs to be done bit by bit, and when you think you are finished you discover you have to implement it in a different market or vertical. This is why it’s behind the scenes in most cases. It’s not very glamorous – it’s about focusing on the little bits and, at the end of the day, this is what makes the actual money.”

Glamorous or not, online operators today store a mountain of big data on customers’ gambling behaviours, preferences and browsing history. For instance, how much they typically stake, which verticals they bet on, which days of the week, time of the day, whether they respond to offers, how often they deposit and how much – the information is truly colossal. Then comes the challenge of putting this intelligence to work. “More and more marketers are beginning to realise that they are sitting on a goldmine of customer data,” states Pini Yakuel, founder and CEO of Optimove.

“I predict that within one to two years, customer-centric businesses will routinely use real-time personalised customer messaging. If they don't, their competition will trounce them”Pini Yakuel
“On a strategic level, effective analysis of rich CRM data allows the marketer to better understand the various personas represented by his customers, their behaviour, their preferences and their tendencies. On a tactical level, the successful analysis of CRM data allows the marketer to personalise offers and incentives to maximise their relevance to each individual customer. Not only does this help maximise customer engagement and spend, and reduce churn, but it generates goodwill, enhanced brand perception and word-of-mouth promotion.”

But despite operators being able to build accurate profiles of their customers in order to anticipate their next move, Peak Gaming Group president Rob Gallo still questions whether even today operators are putting their data to effective use with CRM. “Just because the analytics are there, I don’t know whether people are using these analytics and metrics properly to measure and segment the players to come up with creative offers. I currently have more than 12 [gaming] accounts and I still get emails for offers on slots when I’ve never played slots.” Gallo, who founded OmniCasino and Sun Poker in the early days of i-gaming, adds: “People’s ideology is ‘we have 100,000 on our database and if we email everyone and get a small percentage to respond then that’s great’. But if they just email the 10% who are strictly craps players then that would be a good offer.”

In a similar fashion to this blanket marketing messaging missing the target more often than not, there’s been much chatter in the gambling industry of late about serving up an experience geared more around the individual player. Personalisation usurps generic and a one-size-fits approach. For sportsbooks, getting more personal with users could involve customised homepages based on a player’s previous visits and bet history. Or it could mean specifically highlighting Liverpool’s odds to a user who predominantly backs the Merseyside club. If he has never placed a wager on arch rivals Manchester United, is it worth touting their match odds to him?

While personalisation has become a buzzword of late, it could be argued that the gambling industry has lagged behind the global e-commerce sites with their tailored homepages based on a customer’s previous purchases or browsing history on the site or within the app. Amazon and eBay are prime examples here. Likewise, online travel operators and airlines are particularly adept at personalisation in order to remind returning web and app visitors of previous searches and viewed pages in order to drive sales.

Likewise, being able to deliver real-time, data-driven customer marketing immediately following a particular customer action, a series of actions or scenario, is a powerful weapon in an operator’s arsenal. “Let’s say a high roller on a gaming site had a big loss,” Yakuel explains. “Retention marketers at the gaming site know from prior experience that a significant percentage of similar players experiencing a similar loss will churn. With the advantage of real-time data, the marketers can automatically serve a real-time, personalised message telling the player that the site is refunding him a percentage of his loss. Relieved and pleased, the player continues to play again and again.” This kind of real-time, personalised communication is the future of CRM, he asserts. “I predict that within one to two years, customer-centric businesses will routinely use real-time personalised customer messaging. If they don't, their competition will trounce them.”

“War is a mere continuation of politics by other means, so mobile is a continuation of CRM by other means. And those who have technological advantage are superior”Shahar Attias
Ultimately, though, it boils down to knowing your customers and tracking their interaction with your products. Certain users may log in every day to gamble. Others may go absent for months. Though that doesn’t necessarily mean they have abandoned an operator completely and churned. Attias cites tennis as an example. “Some players only bet on Grand Slam events, so you only have four of these a year. In other industries you would consider a player who hasn’t logged in for three months as a churn player or a dead account. But it’s actually fully active. If you don’t understand this then you don’t speak the language.”

Most online gamblers have multiple accounts with various gambling firms. With mobile, a player will usually have a smorgasbord of apps that they’ve downloaded to choose from. “When it’s at the tip of a player’s fingers it’s easier to lose him or her, but that also applies to desktop,” Attias explains. “War is a mere continuation of politics by other means, so mobile is a continuation of CRM by other means. And those who have technological advantage are superior. If your competition isn’t in the [Apple] App Store then you have an advantage. If your games are only HTML5 and your competitions’ games are wrapped in an application, they have won. If your product is slow or it gets stuck all the time then you can’t fight at the same level of others.”

With mobile such a fierce battleground, an invaluable CRM tool for reaching existing mobile app players continues to be push messaging – a direct-to-pocket communication channel used to coax users back to the app. That’s provided they’ve opted in to receive them, of course. However, unlike email, push never runs the risk of being ensnared in spam filters and it’s generally considered less invasive than SMS. The carrot on the stick for mobile bettors with push is usually an enticing odds boost on a particular market before a televised match is about to get underway. Similarly, a push message on the stroke of half-time can tempt armchair fans into placing a suggested in-play wager.

“What other marketing tool gives you such a direct link to customers?” says Dorothy Creaven, CEO and co-founder of mobile CRM specialists Element Wave. “TV? Print? Online? Nothing will get directly to customers the way push notifications can.” Creaven says opt-in rates generally vary from 20 to 70% but, again, it’s imperative that messages are relevant and target a particular segment of the customer base. “Some brands might send blanket push messages to a massive range of audience without any targeting,” says Creaven. “You’re crossing fingers and hoping for the best.”

Indeed, a customer who solely places a few football accumulators most Saturday afternoons probably isn’t going to respond to a push message trumpeting enhanced odds on a favourite running at Royal Ascot. This wasted push message could prompt the user to dive into the settings to switch the notifications off or, worse still, uninstall the app altogether. Instead, segmenting players based on their betting habits and messaging accordingly prevents bombarding a customer’s homescreen with irrelevant offers and calls to action.

Tracking every action within the app as a knock-on effect of a push message is vital, too. “If you don’t track it you won’t even know if they opened the push notification or even if they ignored it,” Creaven explains. “Or if they did open it, what did they do next? Did they deposit €10 and place a bet? Did they close the app or delete the app? Whether or not it was a positive effect, you need to track everything.” It means push campaigns will automatically create a mountain of data, says Attias. “But that is where BI [business intelligence] kicks in. It goes back to maintaining a sophisticated BI department that will allow you to send the right message to the right customer at the right time without annoying him.”

“What other marketing tool gives you such a direct link to customers? Nothing will get directly to customers the way push notifications can"Dorothy Creaven
On the whole, though, Yakuel suggests the differences between today’s average online customer and one ten years ago is that he or she expects brands to try to engage via follow-up marketing communications. Also, personalised and relevant promotions are no longer deemed invasive and a little bit creepy. “This means that savvy marketers, namely those who discover how to send highly relevant offers to the right customer at the right time, will enjoy all the revenue and brand perception benefits as well as a hefty advantage against competitors.”

Looking ahead, he believes we’re moving into the next generation of online CRM intelligence – “emotional intelligence”. “The big advances here are being able to discover and manage hundreds of different high-resolution customer ‘personas’ and communicate with each one so effectively that they feel like you know them personally, including their wants and their preferences. Just like the old-time storekeeper would know exactly what each of his customers want, based on when they came in, what they bought in the past, what their recent activity was and even their current mood.”

This, he says, can be achieved by micro-segmenting the customer base and using predictive behaviour modelling (applying mathematical and statistical techniques to historical and transactional data in order to predict the future behaviour of customers). “Predictive behaviour modelling goes beyond passive customer analytics by allowing marketers and retention experts to make decisions based on expected future results, rather than trying to make educated guesses based on analysis of historical data.” So, it would appear, CRM is about to get a whole lot more sophisticated and intelligent.
DISCUSS THIS ARTICLE
IN-DEPTH 16 August 2019
Roundtable: David vs Goliath – Can startups really disrupt the industry?

(AL) Alexander Levchenko – CEO, Evoplay Entertainment

Alexander Levchenko is CEO of innovative game development studio Evoplay Entertainment. He has overseen the rapid expansion of the company since it was founded in early 2017 with the vision of revolutionising the player experience.

(RL) Ruben Loeches – CMO, R Franco

Rubén Loeches is CMO at R. Franco Group, Spain’s most established multinational gaming supplier and solutions provider. With over 10 years working in the gambling, betting and online gaming industries, he is skilled in operations management and marketing strategy.

(JB) Julian Buhagiar – Co-Founder, RB Capital:

Julian Buhagiar is an investor, CEO & board director to multiple ventures in gaming, fintech & media markets. He has lead investments, M & As and exits to date in excess of $370m.

(DM) Dominic Mansour – CEO, Bragg Gaming Group:

Dominic Mansour has an extensive background of nearly 20 years in the gaming and lottery industry. He has a deep understanding of the lottery secto,r having been CEO at the UK-based Health Lottery, as well as building bingos.com from scratch, which he sold to NetPlay TV plc.

What does it take for a startup to make waves in gaming?

DM: On the one hand, it’s a bit like brand marketing; you build an identity, a reputation and a strategy. When you know what you stand for, you then do your best to get heard. That doesn’t necessarily require a TV commercial but ensuring whatever you do stands out from the crowd. Then you have to get out there and talk to people about it. 

AL: Being better than the competition is no longer enough; if you’re small, new and want to make a difference – you have to turn the industry on its head. Those looking to make waves need to come up with a new concept or a ground-breaking solution. Take Elon Musk, he didn’t found Tesla to improve the existing electric cars on the market, he founded it to create the industry’s first mass-market electric sports car. It’s the same for online gaming; if you want to make waves as a startup, you have to bring something revolutionary to the table.

JB: Unique IP is key, particularly in emerging (non-EU) markets. As does the ability to release products on time, with minimal downtime and/or turnaround time when issues inevitably occur. A good salesforce capable of rapidly striking partnerships with the right players is vital, as is not getting bogged down too early on in legal, operational and admin red tape.

How easy it for startups to bring their ideas to life? How do they attract capital?

AL: It depends on the people and ideas behind the startup. Of course – the wave of ‘unicorns’ is not what it used to be. Some time ago the hype was a lot greater in terms of investing in startups, but that’s changed now. Investors now want more detail – and even more importantly, to evaluate whether the startup has the capacity (as well as the vision) to solve the problem it set out to address. That’s not to say investors are no longer interested in startups – they certainly are – but now more than ever, it’s important for startups to understand their audience as well as dreaming big.

JB: To get to market quickly, you need a great but small, team. If slots or sportsbook, the mathematical engine and UX/UI are crucial. Having a lean, agile dev team that can rapidly turn wire framing and mathematical logic into product is essential. Paying more for the right team is sometimes necessary, especially when good resources are scarce (here’s looking at you, Malta and Gibraltar).

Building capital is a different beast altogether. You won’t be able to secure any funding until you have a working proof of concept and, even then, capital is likely to be drip fed. Be prepared to get a family and friends round early on to deliver a ‘kick-ass’ demo, then start looking at early-stage VCs that specialise in growth-stage assets.

How do you react when you see startups coming in with their plan for disruption?

RL: We welcome the innovation and fresh thinking startups bring. This is particularly the case in Latin America, with a market still in its infancy. One area we’d especially like to see startups making waves is in the slot development sector. Latin America is a young market that needs local innovation suited to its unique conditions – especially in regard to mobile gaming.

Operators eyeing the market have Europe‐focused core products, which creates a struggle to work to the requirements of players and regulators. To succeed there, it has become more important than ever to work with those with a knowhow of the local area to adapt products and games to besuitable from the off; we welcome the chance for local talent to develop and grow.

Do you think it’s easier for established companies to innovate and establish new ideas? 

AL: From a financial perspective, yes. It is without a doubt easier for incumbent companies to establish a pipeline of innovation via their R & D departments, as well as having the tools to hand for data gathering and analysis.

But it stops there. Startups hold court in every other way. Not only are they flexible, they can easily switch from one idea to another, change strategy instantly as the market demands and easily move team members around. Established companies know this – and this is why we’re seeing an emerging trend for established companies to acquire small, innovative online gaming start-ups. They have the right resources and unique ideas, as well as the ability to bring a fresh approach to businesses’ thinking.

RL: For me, it’s always going to be established companies. Only with the resources, industry experience and know‐how can a company apply technology and services that truly make a difference. Of course there are exceptions. But when it comes to providing a platform that can be approved by regulators across multiple markets – as well as suiting an operators’ multiple jurisdictions – it is simply impossible for a couple of young bright minds with a few million behind them to get this done.

DM: I actually think it’s harder for established companies. It’s key to differentiate between having a good idea and executing one. That’s where the big corporates struggle most. They’re full of amazing people with all sorts of great ideas but getting them through systems and processes is nearly impossible.

Is it essential to patent-protect innovative products?

AL: It’s a very interesting subject. If we take IT for example – patents can actually become a block to the evolutionary process within the industry. Of course, getting a patent future proofs yourself from the competition copying your concept but, having said that, if you’re looking to protect yourself from someone more creative, smarter and agile, you’ve probably lost the battle already!

In our industry everything is moving faster and research takes less time than the development itself. No matter how good you are at copy pasting, you can’t copy Google or Netflix. The most important thing is not the tech itself but rather its ‘use-case’ – or in other words, does it solve what it’s meant to solve? Competition is healthy and the key to innovation. If you spend your whole time looking behind you, you’ll never be able move forwards.

JB: Tricky question, and one that depends on what and where you launch this IP. It can be difficult to patent mathematical engines and logic, mostly because they’re re-treading prior art. Branding, artwork and UX is more important and can easily be copied, but the territories you launch will determine how protectable your IP will be once patented. US/EU/Japan is easy but expensive to protect in. But China/South East Asia is a nightmare to cover adequately. Specialised patent lawyers with experience in software, and ideally gaming, can help you better.

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