Published: 12 February, 2021

OKR: The woke version of KPI

Despite the effectiveness of KPI, Hybrid Interactive consultant Shahar Attias tells us why OKR – objectives and key results – are the future for online gaming.

We consultants lead an ultra-modern lifestyle, very 2.0. Stories on LinkedIn? Sure. Migrating all workspaces into Notion? Did it yesterday. Following on James Charles? Hi sisters! So why are we still hung up on the same old KPI methodology?

Well, for starters, it worked pretty awesome so far, which is quite a decent argument. I mean, we do work in betting, so we all know that you never change a winning team. Unless of course, you’re a Dutch regulator. In that case, you never do anything anyway.

Going back to key performance indicators, they are simple and brilliant: you decide which activities are crucial to your business success, set desired targets and monitor progress along the way. Online casinos will closely follow deposits and NGR over time (as well as reinvestment, or bonus out of GGR, for example, and additional ratios as supporting indicators). Social gaming operators are following on their in-app purchases (as well as retention, DAU and ARPDAU as secondary KPIs). On the other hand, people working for state-owned retail lotteries follow the clock until 1pm and that’s it.

So, why on Earth is there a need to change such a successful methodology? Because we are the most advanced online marketing industry, that’s why. E-commerce has carts. We have cashiers. Online stores have same-day-delivery. We have real-time everything. They hire sales people. Please… we have affiliate account managers. Since we’re always on the lookout for the most advanced technologies, when it comes to management practices, where can we go from here? Say hello to OKR: objectives and key results. According to Andy Grove, who developed this methodology during his time as Intel’s CEO, this is a “goal-setting framework, where the objective is the direction, toward which the organisation needsto be in the medium term”. Let’s break that into terms that aren’t buzzwords and something we can actually work with.

Setting the objective would be a process in which you align the company and your team goals. Such an objective should be ambitious, qualitative and time-bound. It’s not your regular “we need a 75% MoM retention rate” bark from the CMO. Instead, expect something like “Improve our casino brand loyalty” as your quarterly objective, MeikoShiraki style.

What can you do with such a vague request? Set some key results to support it. In OKR, each O has 3-5 KR, and they must be measurable, quantitative and value-based. Here we go:

• Ensure 40%+ of our first-time depositors (FTD) will remain
active the following month
• Dedicate at least half our bonus budget to segmented promos for constant three-month active players
• Reach out over the phone to all players in last month’s top 20% depositors, who haven’t deposited yet, after the current month’s 10th day

What do we have here? All KR are easily measured and the value is quite clear (generating further deposits from last month’s active players is, well, the basis of your job, honestly). Also, note that the requirement was to boost loyalty and here we went from FTD to last month’s top players and through to three-month actives; targeting these groups (if done successfully), is bound to increase repeat visits and – with the right offer (budget), and using the right channel (even phones) – their likelihood to stick around.

But all you basically have here is a bunch of KPI in disguise. Surprisingly enough, this claim is kind of true, but not entirely correct. KR essentially encompass KPI, that’s clear to see. But not all of your KR will include numbers, for example, “reach out over the phone” is measurable, yet in a binary manner. And KPI are straightforward metrics, whereas KR are derived from the objective; when you complete all your KR, this should give you confidence that your objective is achieved. In fact, the objective will have a sliding percentage scale that progresses as KR numbers are met through the quarter. It’s like gamifying your work processes and reporting. Let’s run a quick recap.

An objective is the direction we want to go in. The metrics (KR, KPI) will help us monitor how we’re performing. Roughly, that’s the main difference between the two methodologies. OKR also has a goal, set first on the company level, and shared between the teams so they could set their KR accordingly. Obviously, as with our example above, brand loyalty can and should be supported not only by CRM, but also additional marketing functions (acquisition, social media, etc.) and definitely on the product level as well.

With OKR, you define an area for improvement, or a problem to be solved. KPI are used to set revenue targets, growth or performance expectations.
Do we actually need it? It’s quite the “it” thing right now, and all posh start-ups brag about “adopting what made Google big”. (Sure, it was OKR, not PPC for adult-related keywords.) So what about our dear iGaming CRM people? I somehow feel such a methodology is better suited for large organisations (let’s say, 100 to 200 employees or more), who are trying to become more efficient by working quarterly instead of annually. Most B2C operators in our industry usually have no more than a couple dozen employees who monitor the activity as it happens and react instantly.

Our world is moving so fast and the competition never stops challenging us. Can we really afford being patient enough so a process will last a full three-month period? An old joke is that strategic thinking in iGaming is limited to planning your weekend when it’s Wednesday. Only last Christmas we saw enough advent calendars being updated, on the go, with last-minute adjustments due to positive or negative results early on. With such a hectic vibe, setting a retention rate objective for Q2 2021 is as practical as gazing at Instagram holiday photos during COVID-19. Sure, it looks stunning and you wish you were doing it as well, but in reality it disturbs your work, rather than help optimise it.

That said, maybe we should take the leap, perform a mental switch and allow ourselves to also focus on long-term projects with top-level goals. After all, you might say setting an objective has nothing to do with the tweaks you need to perform daily; you take care of your key results (same as you currently do with your KPI), be as agile as you already are and find solutions to the never-ending catastrophes knowing that your work keeps contributing to push that quarterly needle in the right direction. On a macro management level, it does make sense.

As an iGaming CRM consultant with over 20 years of industry experience, Shahar Attias has helped both start-ups and publicly traded operators to optimise their player retention efforts, and can help your company to benchmark your internal marketing strategy,procedures and KPI with the competition. Following senior executive roles with 888, Playtech and Pokerstars, he has founded Hybrid Interaction Ltd, the premier online gaming consulting firm, and has held more than 150 successful projects across all verticals and through most jurisdictions.