For the time being, iGaming industry is one of the most profitable markets worldwide, being worth over $45 billion across all existing businesses. The estimated growth in the iGaming market is predicted to be improving by 14% every year meaning this is a tidbit with stiff competition.
There must be something unique and innovative about you, as a brand, to stay on the crest of this wave for long. Since casinos’ policy is full confidentiality and data protection, they do not share any data or gained experience with each other, unlike other business spheres, making iGaming one of the most challenging markets to research and influence.
However, let’s not forget that the engine of every business is a customer, and iGaming is not an exception. This belief is as old as time but still works. You need to stay as close to your clients as possible and listen to them attentively.
The main questions for you to answer here are: “Who are your customers (age, demographics, etc.)?”, “What do they like?”, “What do they expect from you?”.
The Most Important Business Objectives for iGaming Operators
Advertising is one of the keys to gaining customers, and there are a lot of companies that spend as much as they can on advertising, hoping that it will bring the massive influx in players. However, these efforts may be fruitless, if the company’s website itself and its products do not focus on the customer’s needs and expectations. Besides, advertising may be restricted or limited in certain market areas, and that is why the concept of customer engagement takes the lead here which is also dependent on conversion rate optimization.
The correctly developed conversion optimization strategy enables your site to gain more visitors, increase purchase value and leads to performance growth.
Based on the fact that CAC is 410$ on average, we can estimate that even a 10% improvement in conversion rate reduces the acquisition cost by $41 per player and improves the profit margin of the company by 8%.
However, when a new visitor is turned into a conversion, you need to do your best to keep up this circuit functioning. To have more repeated transactions and visits, you need to work on your customer retention rate optimization.
Indeed, the level of the player’s experience and the quality of your products play a significant role in the company’s growth. Meeting the requirements of your customers and tailoring your services to their needs is what can create a strong bond within your B2C business and increase customer retention.
Now, let’s define the main business aims for the gambling market as well as these are also relevant to any other segment:
- Reduce the unity costs when at the acquisition stage
- Maintain customer retention
- Increase the customer lifetime
What Is Customer Retention for iGaming Business?
Customer retention is a process of spurring existing customers on continuing using your services or buying products from you. In other words, customer retention is all about measuring how much your customer is engaged with your brand and willing to come back over and over again.
The best way to describe the customer retention process is like owning a restaurant. Excellent service, food of high-quality and understanding of each customer’s taste will make it be a favourite place for a client. The moment when you acquire your first customers is the point to start thinking about customer retention as an important influence factor of your brand’s success.
Do not forget that the average customer retention rate by industry usually differs and is defined based on the proven statistics within the context of one market segment.
Customer Retention Management: Facts and Figures
Customer retention management will help increase the customer lifetime and will also improve your revenue. Focusing on customer retention helps build a steady and consistent flow of income. Besides, it’s cheaper and easier to retain the existing customer than to find the new one. According to the statistics, it will cost you five times less to retain the customer rather than to acquire.
The chances of selling to the existing client are 40% higher than to the customer who has never heard of you.
In addition, when launching a new product, the probability of buying it by current customers is 50% more than by the new clients. Moreover, already acquired customers tend to spend by 31% more in comparison to their counterparts.
Research and facts cannot lie, so you can see that engaging your players is what you need to improve and constantly focus on. The understanding of your audience will help you make correct decisions in sustaining those vital relationships.
How to Calculate Customer Retention Rate
Other good news on customer retention is that it is not a diluted notion but a parameter that can be easily calculated. Here is an example: let’s say you have 3,000 players for the past three months. During this period (3 months), only 1,200 players returned to make a deposit or transaction on your site. These two numerical figures give you an understanding of what your customer retention value is. But remember that you should not take new visitors into account because that will not define the correct customer retention value. The calculation of customer retention works as follows:
According to the given formula, if you have 3,000 of players at the end of the three months and 1,200 is for returning players, that leaves you with 1,800. The number of players you had at the start was 5,000. Divide 1,800 by 5,000 and that is 0.36. Multiply 0.36 by 100 and get 36. This means your customer retention rate is 36%.
This number is what you should analyze when building your marketing strategy. Having 36% of players come back on average is not bad, and that means you can count on 36% of your players to provide you with a steady flow of revenue over a set period of time. According to global statistics, increasing your customer retention rate only by 5% can increase your profits between 25-95%.
It means that iGaming industry has quite evident and prolific dependence between customer behaviour and overall margin. All these facts and figures prove the importance of customer retention within your business strategy model.
The Importance of Personalization for iGaming
We can characterize personalization in iGaming as an understanding of what segment do your players belong to, what are their tastes and desires in gaming, what is their intention, and why do they value you. Knowing a full set of information will allow you to deliver the right marketing strategy that works.
To understand how to adopt personalization at best, you need to interact with your audience i.e, to apply specific marketing tools in order to gather key information and build a certain user’s profile.
At best, you should define what customers like/dislike, want from their gaming experience on your site/platform and work towards delivering advancements of your services according to their needs or create personalized marketing triggers.
Keep in mind that the more comprehensive and custom-tailored marketing you have, the more engaged customers you get.
Defining what your players’ needs are is the first step for improving your conversion rate. The following metrics are what can help you to conduct segmentation of your iGaming audience 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
- Interest identification
The best way to see the real picture of your customer’s interaction with specific channels and optimize your conversion rate is to analyze the player performance data you had in the past in combination with the real-time values. Based on the data you receive, you will be able to generate the right personalized triggers that will be activated at the right moment. Remember that customers who engage with your business will increase retention rates and lead to higher LTV.
Customer Retention Technology for Online Casinos
As we already mentioned, for the iGaming companies to gain a regular income, the players need to be continuously attracted and retained. Here 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 casinos hold special promotional offers and bonus schemes to encourage players to come back or stay for long. Welcome package is a nice way to attract newbies and compliment them for choosing your brand. Loyal customers, for example, can get exclusive prizes like instant cash rewards, free spins or anniversary gifts. Daily jackpot draws or weekly challenges can be held to compete for extra gameplay benefits.
- Special offers
Special offers are one-time or permanent promotions. When you have players that are with you for a long time, it’s nice to give them something to look forward to. During the whole year, there can be special events arranged for them. Take into consideration holiday events, for example, on Christmas, make new Christmas-themed games available that can offer extra goodies in the spirit of the holiday season. Besides, there can be tournaments with a massive prize pool. Players can compete with each other by playing specific games, and the winner gets the biggest prize.
Cross-selling is the idea of sharing different products within one platform. For example, if the player enjoys traditional slots, you may also advert table games to him as an add-on product. Cross-selling allows the customers to enjoy all parts of your business so that they can become more acquainted and engaged.
- Event-triggered Marketing
In order to create events specifically tailored to your players’ desires and needs, you need to pay attention to the actions your customers perform on your site and to certain behavioural readings you acquired. Based on these specific data, you can send personalised push notifications and emails (so-called marketing triggers) that your customer will engage for sure with. For example, based on the fact that the player lost 80% of his money at a time, a special bonus can be offered.
Here are some excellent examples of events triggered by the player’s actions:
- An email may be sent to give news on a new bonus deal for roulettes since the customer has recently won more in these types of online games.
- If the player has suffered some significant losses over the past few games, he could receive an exclusive deal to earn money back faster or receive a cashback bonus.
- As a reward for winning over the past few games, the player can be offered exclusive services or participation in company events.
Customer Retention improvement is one of the best ways of increasing your income on a regular basis. As mentioned before, it’s essential to create a strong bond with your customers by providing them with personalized services and experience. To define what is a good retention rate for customers within a certain business, one should consider set performance aims. Think on converting your business into a comfortable place for your customer where he is always expected and valued, and soon you will get regular investments as reciprocity!