If you want your online casino to be successful, there are two problems to deal with: the first is gaining new customers and the second one is retaining existing ones.
Both acquisition and retention of customers are the issues that lie in heavy competition within the iGaming industry. The number of casinos is almost unlimited, but the number of players is still not broad. Moreover, gamblers usually are creatures of habit — once they make a choice, they don’t give up on it easily. That is why you need to convince players to stick to your online casino and keep them engaged.
Correctly chosen CRM software will enable you to solve both these problems and improve the performance of your iGaming platform quickly. Below, we will explain why CRM systems are essential to online casinos and what value they can add to your business.
Mighty LTV or What Is This Fuss About?
First, we need to talk about the LTV concept. LTV is short for “lifetime value” and refers to the value each customer adds to the business while being a customer. To give a simple example, a customer who deposits only once a month and plays a maximum of 10 games has a very low LTV. However, a customer who deposits every week and tries hundreds of games of different categories has a much higher LTV value.
It is technically possible to divide LTV into three key aspects:
- revenue per gaming session
- transaction frequency and retention
- profit margin
These three key features are what defines LTV in iGaming, and each must be evaluated separately.
Revenue per Gaming Session
As an online casino, your goal is to increase the value of customers’ orders as much as possible. This can be realized either by increasing the price of bets and deposits or by increasing the number of payments per transaction — here come “add-on” items.
Have you ever noticed that products such as gums and candies are always near the cash register in supermarkets? The purpose of this is to attract your attention and to encourage you to purchase an additional product which is usually cheaper. Thus, you can make the customer enter the market to buy a single product, but leave with more than one.
This tactic can also be used in online casinos. For example, you can propose a customer to make a deposit that is smaller than the average one to try the new game or new service. In other words, you can make your customers be aware of other products and encourage them to buy more than one “thing” per transaction. This is what really increases the order value if we are talking about online casinos.
Transaction Frequency and Retention
The frequency of transactions made on the site directly depends on the level of user’s engagement and motivation. Based on segmentation, you can encourage your customers to make more transactions with highly relevant bonus offers sent by email, push notifications, etc. Besides, for every customer, it is significant to feel important and valued, that is why loyalty offers and VIP programs help boost customer’s engagement and, as a result, LTV.
Consumers are more likely to respond to marketing messages when they feel that the content speaks directly to them.
Another thing that may help to improve purchase frequency and retention is the convenience of your site and actions the player makes.
Customers do not like innovations and always want to see what they are used to, but at the same time, customers don’t usually want to look at the same thing. They want to see something new regularly. This dilemma applies to all online businesses and is even more important for online casinos with complex interfaces, that feature hundreds of games on their homepage. If you noticed a decrease in the number of members after making a change on the casino site, you have done something wrong. You should always carry out the updates based on the behavioral data of your customers and learn their feedback at every stage.
In addition, studies show that 28% of customers cancel the order due to the complex and time-consuming checkout process. If we apply this to online casinos, you need to simplify the betting process as much as possible, by choosing both the user-friendly interface and the payment system. Customers should be able to complete the deposit process in not more than three steps and place their bets without dealing with complicated menus/options. Do not forget to optimize the gambling experience and purchasing process also for mobile devices since mobile players are now the broad audience.
You can increase your prices or lower your expenses to increase the profit margin. For most businesses, increasing costs is the only option since cutting the expenses requires significant changes in the brand’s policy and strategy. For example, by starting to offer high-limit games that appeal to high-roller players, you can get a price increase without making any changes to your existing services, or you can offer “add-on” products to raise the overall profit value.
What Is CRM Software and How Can It Help?
CRM stands for “customer relationship management” and is application software for monitoring, controlling and managing all your business’ interactions with your target audience. We believe customer relationship management software to be an essential base of any marketing strategy. However, many companies are not aware of what CRM really is and how to apply it correctly.
The study by Nucleus Research shows that every dollar spent on CRM returns $ 8.71 in the long run.
What Does CRM Mean to Online Casinos?
So, what do CRM tools do and what kind of data can CRM collect? The more customers your online casino or gaming platform has, the more data you have to keep. Your customers’ personal information, game preferences, financial backgrounds, and communications with the support department are vital data to help your business grow. Since you cannot save and use all this data in Excel spreadsheets, you need a much more practical solution — CRM. CRM Software enables you to collect and store customer data that are of great importance to your business so that you can achieve:
Individual approach to players
If you think there is only one type of player, you are wrong: each player has different desires and needs. Even customers who enjoy a specific kind of games form a certain variety segment. For example, someone who likes Blackjack Switch may not like Multi-Hand Blackjack. Blackjack is available in many variants, and each has its own type of players who can also be segmented into other relevant groups. Besides, one who likes Multi-Hand Blackjack may not spend much money, unlike the one who prefers Blackjack Switch. Now you see that these are completely different customer groups.
CRM software allows you to track each customer’s gaming habits separately and create a different profile for each. In other words, you get solutions tailored to each customer, rather than one solution for everyone.
Every player enjoys playing at casinos with content and services that appeal to him. Thanks to the individual data collection, you can identify a particular player’s favourite provider and have that provider’s games highlighted on the home page when that player is logged in. In addition, the individual profiles you create will ensure that your loyalty program works in the right way.
Positive feedback on external resources
Since CRM solutions will enable you to provide a tailored service to the customer, this will also allow you to receive positive feedback from your satisfied customers on external sources such as social media, forums, etc.
Help in marketing programs or cross-sales
Cross sales refer to supporting products purchased together with the original product, and as we mentioned above, it is what actually increases the order value. You can use the data collected with CRM systems for the efficient operation of cross-sale marketing campaigns. For example, a customer who usually plays only slots had visited the live casino category page but left without playing a game — it means that these data can be used to prepare a certain live casino bonus for this player.
Target audience analysis
TAA is a very complex process and covers your customers’ demographics, personal preferences, interests, and other relevant metrics. Most businesses have to work with third parties and allocate a separate budget to obtain this data. However, with CRM software, you will start collecting TAA data already at the registration stage. These data are vital to create buyer personas and provide detailed information about the customer you are targeted at.
CRM systems work really efficiently for iGaming. Due to the monitoring of your customers’ behavior using CRM, you can see the games customers love and, for example, highlight them on your homepage. You can see how much of your bonus offers have been activated and make changes to the bonus terms or idea. According to your customers’ choices, you can also identify unpopular suppliers and focus your category page on more preferred ones. Besides, you can identify the issues your customers have with your services and make improvements accordingly.
In other words, a properly selected and used CRM software allows you to understand what your customers really want and gives you the opportunity to communicate with them constantly to become better. CRM also gives you freedom with updates on your site since you will be able also to conduct A/B test to see what works for your customers and what does not.
Segmentation: Why Does It Matter?
The individual approach will lead to segmentation in marketing campaigns. Malcolm Gladwell explained why segmentation is important in his TED Talk Choice, Happiness and Spaghetti Sauce, with a simple example: in the food industry, there is no single spaghetti sauce that everyone likes, right? Companies produce multiple sauces with different flavours rather than one type of sauce; that’s because everyone has different tastes and preferences. Gladwell insists on the fact that customers who have a choice are happy customers.
Instead of a standard marketing campaign that is targeted to appeal to everyone, you should choose campaigns that advertise different variants of the same product to different customer groups.
Gladwell underlines that multiple marketing campaigns aimed at small groups based on customer preferences will be more efficient.
Here is recent research that supports this idea: marketers studied 30 million customers and 2,000 campaigns, and made a conclusion that the average revenue from campaigns targeting at 100,000 customers or more was $0.10. While campaigns targeting at 150 or fewer customers achieved $1.90 income per customer.
The difference is remarkable: creating small-scale customer clusters with segmentation provides higher results. Now you can imagine why segmentation is important. As we mentioned above, there is no single player type, and everyone enjoys different game types and variants. You can use the data you get with CRM systems to create small player segments and, for example, make your bonus offers much more effective and targeted.
RFM is an abbreviation of Recency, Frequency, and Monetary, and stands for a special approach to segmentation. By monitoring such values as recency, frequency, and monetary you can easily identify customer groups with certain needs. In other words, you can use the data you get from the CRM system and apply RFM segmentation method to create specific player segments.
CRM systems provide you with comprehensive data you can use, but you can get better results by also using the RFM method to segment players. So, how does RFM segmentation work? First, you need to characterize your customer according to the following attributive values:
- Recency: simply refers to the last date a customer performed a transaction on your site
- Frequency: indicates how often the customer conduct transactions
- Monetary: shows the total amount which the customer spent on your site
Next, you should segment your customers into three groups for each attributive value (R, F, M), each group of which should then be divided into four different groups — from the highest value to the lowest.
With RFM segmentation, you can identify customers who spend the most but not often, active but low-spending customers, new customers who spend above average, etc.
Your goal here is to identify the behaviors of the customers in each group by making the customer groups as determinant as possible.
For example, instead of creating a single “slot players” group, you can create a group called “jackpot machine players”, and within this group, you can create small segments for players who spend a lot and spend less, according to financial data.
Finally, you are able to create an appropriate communication channel with your customer based on the behavioral data you processed. The goal you need to achieve is to analyze customer behavior and create specific services or bonus offers for each. The more meticulous you are, the more accurately you can identify how to influence your sales increase.
Drawbacks of RFM Segmentation
Despite being quite an effective marketing tool, RFM segmentation also has some disadvantages. RFM method considers only three main values and does not take into account other important factors such as the type of products bought, activity in other campaigns, demographics, etc. All that makes RFM not a highly precise model.
The Best CRM for Your iGaming Business
Using the best CRM solutions with the focus on your business goals will enable you to get two values that are vital to any business: customer data and efficient communication with the target audience. With CRM software, you will be able to shape your business and make future decisions you will be confident in. Therefore, if you want to stand out from your competitors and offer services that create a difference, you should start using a CRM platform immediately and take advantage of all the benefits it offers.