How to improve your Online Casino in 2 simple steps
How to improve your Online Casino in 2 simple steps
Getting it right, the first time, can make all the difference
Getting it right, the first time, can make all the difference
December 14, 2021 • 5 min. read •
December 14, 2021 • 5 min. read •
The iGaming space is an extremely competitive area when it comes to acquiring new customers. A lot of brands are fighting tooth and nail to attract the atention of curious casino and sports betting players in the hopes of winning their business. Google Ad-words, affiliate sites, television spots or newspaper ads are all instruments companies use every day in order to increase the traffic to their websites or apps.
But the traffic is expensive. And it’s getting more expensive by the day. Very few of the new customers acquisition deals you see nowadays are based in revenue sharing alone, most of them feature high upfront costs in the form of placement fees, CPMs, CPCs or CPAs. In addition, these costs are paid regardless of the quality of the customer they attract. This creates a unique challenge for most operators since every deal now has an inherent amount of risk attached to it: that the amount the customers spends with your business will not make up for the cost of acquiring them. So how do you deal with this?
1. CLV – the 3 letters you’ll love to hate
CLV stands for Customer Lifetime Value and it represents the average amount a customer is going to spend with your business before they leave and don’t come back. Ideally, this value is going to be higher than the amount you spent to convince him to become your client as well as any additional operational costs you may incur with his activity. In iGaming is important to take into account all aspects when looking at CLV, because unlike other industries, casinos players can win tons and withdraw their winnings. And that’s something that happens on a regular basis. You need to take into account:
- deposits as well as withdrawals,
- any bonuses you offered the player and how much they cost you,
- any other costs related to the activity: payment, gaming taxes, jackpot seeds etc.
You usually can’t (and shouldn’t) do this evaluation on a per customer basis in iGaming, especially due to the volumes involved and the way marketing activities are structured. However, you should routinely be aware of the averages. What will happen most of the time is that you’ll encounter situations where you have 10 customers who deposit €200 and an 11th one that deposits €2,000 before they stop coming to your site and effectively churn. Whether this €360 in deposits will be enough to cover the costs and make you a profit will depend on the marketing deals you have in place and/or your arrangements for operations. At least you know where you stand and that’s the first step in properly organizing an efficient business.
2. Churn – the boogeyman of any operation
The churn rate represents the percentage of customers who decide to take their business elsewhere, leaving your product for good. This can happen for a multitude of reasons: the product doesn’t cover their needs, technical issues, pricing expectation mismatch and so on. In a space where competition is high, like the iGaming space, keeping customers with you for a long time is a challenge. There is always going to be someone out there trying to attract your clients with better offers and promises for a better experience.
This is where CRM (Customer Relationship Management) comes in to save the day. The people in this line of work are specialized in optimizing the client’s experience with the brand to make it as likely as possible that they are happy and will not leave for a competitor when they’re looking to make a repeat deposit. It makes a world of difference for a player to receive a tailored offer when he wants to play a game. To know that something will be there for him when he decides to come back to your website. Just as it creates a great impression if he is met with clarity, conciseness and understanding when he encounters an issue. This is the distinction between a player who comes and claims a welcome bonus to “test the waters” and one who will come back years after that first day.
Good CRM can make the difference between being able to meet your quota of new customers for the month or coming up short. If the market moves into a position where you have a CPA of €150 for each new client, but your product in its current form is only able to attract spends of €130 from each, you are going to face quite the conundrum. In the best case scenario, you’re going to have to tap into sources of lower quality. While in the worst, you’re just going to be left in the dust by competitors who continue to outscale you and slowly push you out of the market.
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At the end of the day, maintaining a profitable online casino is a complex endeavour. You’ll always be spinning multiple plates, and the only way to keep the show going is to be aware of all factors influencing your bottom-line. Acquisition efforts go hand in hand with retention ones. You can’t have one without the other if you’re in it for the long term. Should you need a few pointers, we’re one click away.