At the moment, the iGaming industry is one of the most profitable markets in the world, with a value of more than $45 billion across all existing companies. It is predicted that the estimated growth in the iGaming market will improve by 14% every year, which means that this is a challenging market with stiff competition.
There must be something unique and innovative about an online casino, as a brand, to stay on the crest of that wave for long. Since the casinos’ policy is total confidentiality and data protection, they do not share any data or lessons learned with each other, unlike other business spheres, which makes iGaming one of the most difficult markets to research and influence.
However, it cannot be forgotten that the engine of every business is the customers, and the iGaming industry is no exception to this reality. This belief is as old as time, but it still works. The rule is to try to stay as close as possible to customers and listen to them carefully.
The main questions to answer, based on this premise are: “Who are your customers (age, demographics, etc.)?”, “What do they like?”, “What do they expect from you?
Most Important Business Objectives for iGaming Operators
Advertising is one of the keys to winning customers, and there are many companies that spend as much as they can on advertising, hoping that it will bring in a massive influx of players. However, these efforts can be unsuccessful if the company’s website and products are not focused on the customer’s needs and expectations. Moreover, advertising may be restricted or limited in certain areas of the market, and that is why the concept of customer engagement takes the lead here, which also depends on another variable, such as conversion rate optimization.
Properly developed conversion optimization strategy allows the reliable online gambling websites to get more visitors, increase purchase value and lead to performance growth.
Based on the fact that the CAC (customer acquisition cost) is $410 on average, it can be estimated that even a 10% improvement in the conversion rate reduces the acquisition cost by $41 per player and improves the company’s profit margin by 8%.
However, when a new visitor becomes a conversion, every effort must be made to keep this loop going. To have more repeat transactions and visits, work must be done to optimize the customer retention rate.
In fact, the level of player experience and the quality of the products play an important role in the growth of the online casino. Meeting customers’ requirements and tailoring services to their needs is what can create a strong bond within the B2C business and increase customer retention.
Now, you have to define the main business objectives for the gaming market, and these are also relevant for any other segment:
- Reduce unit costs at the procurement stage
- Maintain customer retention
- Increase customer lifetime
What Is Customer Retention for iGaming Business?
Customer retention is a process that drives existing customers to continue using the services or purchasing the products of the online casino in question. In other words, customer retention is about measuring how much a customer is committed to your brand and how much they are willing to come back again and again.
The best way to describe the customer retention process is like owning a restaurant. Excellent service, high quality food and an understanding of each customer’s tastes will make it a customer’s favorite place. The moment you acquire your first customers is the time to start thinking about customer retention as a major influencing factor in the success of your brand.
It should not be forgotten that the average customer retention rate by industry generally differs and is defined based on proven statistics within the context of a market segment.
Customer Retention Management: Facts and Figures
Customer retention management will help increase your customer lifetime and also improve your revenue. Focusing on customer retention helps generate a steady revenue stream. In addition, it is cheaper and easier to retain the existing customer than to find a new one. According to statistics, it will cost five times less to retain a customer than to acquire a new one.
The chances of selling to that existing customer are 40% higher than to a customer who has never heard of your brand. In addition, when launching a new product, existing customers are 50% more likely to buy it than new customers. In addition, existing customers tend to spend 31% more compared to their counterparts.
Research and facts cannot lie, so you can see that engaging the players is what needs to be improved and focused on consistently. Understanding the audience will help make the right decisions to maintain those vital relationships.
How to Calculate Customer Retention Rate
Another good news about customer retention is that it is not a diluted notion, but a parameter that can be easily calculated. Here is an example that illustrates it: let’s say an online casino has 3,000 players during the last three months. During this period (3 months), only 1200 players returned to make a deposit or a transaction on the site. These two numerical figures allow you to understand what the customer retention value is.
But it should be remembered that new visitors should not be considered, because that will not define the correct customer retention value. Taking into account that the initial online casino customer figure was 5,000, if you have 3,000 players at the end of the three months and 1,200 is for returning players, that leaves a figure of 1,800 customers who remain loyal to the brand. Dividing 1,800 by 5,000, that comes out to 36%. This means that the customer retention rate is 36%, which is the number to look at when creating your marketing strategy. That 36% of players returning on average is not bad, and that means that 36% of players can be counted on, which will ultimately provide a steady stream of revenue over a given period of time. According to global statistics, increasing the customer retention rate by just 5% can increase profits by 25% to 95%.
It means that the iGaming industry has a quite evident and prolific dependence between customer behavior and overall margin. All these facts and figures demonstrate the importance of customer retention within the business strategy model, designed for online casino.
The Importance of Personalization for iGaming
Personalization in iGaming can be characterized as an understanding of which segment the players belong to, what are their tastes and desires in games, what is their intention and why they value your brand so much. Knowing a complete set of information will allow you to deliver the right marketing strategy that works.
To understand how to adopt personalization at its best, you need to interact with your audience, i.e., apply specific marketing tools to collect key information and create a specific user profile.
Ideally, you should define what customers like/dislike, want from their gaming experience on your site/platform and work to offer advancements in your services, according to their needs or create customized marketing triggers.
Keep in mind that the more comprehensive and personalized marketing strategies you have, the more customers will engage.
Defining what the players’ needs are is the first step to improve the conversion rate. The following metrics are the ones that can help to perform iGaming audience segmentation to use a personalized approach for any player:
- Marketing Source
- Early VIP potential
- Player profile identification
- New or returning players
- Understanding player intent
- Early churn potential
- Identifying interests
The best way to see the real picture of a customer’s interaction with specific channels and optimize your conversion rate is to analyze the player’s performance data, comparing it to what it had in the past in combination with real-time values. Based on the data received, the right personalized triggers can be generated and activated at the right time. Remember that customers who interact with the business will increase retention rates and generate a higher LTV (Lifetime Value).
Customer Retention Technology for Online Casinos
As mentioned above, in order for iGaming companies to earn regular revenue, players must be attracted and retained on an ongoing basis. These are just a few marketing ways by virtue of which you can attract customers to your brand and keep them as loyal players:
Bonus Offers
Many online casinos have special promotional offers and bonus schemes to encourage players to return or stay for a long time. The welcome package is a good way to attract newbies and reward them for choosing your brand. Loyal customers, for example, can get exclusive prizes such as instant cash rewards, free spins or anniversary gifts. Daily jackpot drawings or weekly challenges can be held to compete for additional gaming benefits.
Special Offers
Special offers are one-time or ongoing promotions. When you have players who are with an online casino for a long time, it is good to give them something to look forward to. Throughout the year, you can organize special events for them. Taking into account holiday events, for example, at Christmas is a good initiative, making available new games with Christmas themes that can offer additional goodies, in line with the spirit of the holiday season. In addition, there can be tournaments with a large accumulated prize pool. Players can compete against each other by playing specific games, with the winner taking the biggest prize.
Cross Selling
Cross-selling is the idea of sharing different products within a platform. For example, if the player enjoys traditional slots, table games can also be advertised as an additional product. Cross-selling allows customers to enjoy all parts of the business to become more familiar and engaged.
Event Triggered Marketing
To create events designed specifically for players’ wants and needs, attention must be paid to the actions customers take on the site; and to certain behavioral readings it acquired. Based on this specific data, you can send automatic notifications and personalized emails (so-called marketing triggers) with which the customer is likely to interact. For example, based on the fact that a player lost 80% of his money at one time, a special bonus can be offered.
An email may be sent to give news about a new bonus offer for roulette, since the customer recently won more in this type of online games. If the player has suffered significant losses in recent games, he or she could receive an exclusive deal to win money back faster or receive a cash back bonus.
