Player lifetime value (LTV) is at the heart of casino economics. Everything else, well, is a game of chance, like the pandemic we are in. Player retention determines the financial health of the casino by impacting KPIs across GGR, NGR, bets-to-deposits, and more.
Player retention, though important, should be pursued mindfully. Locking down the players might be an unsustainable pursuit.
Responsible gaming should be an exciting, enriching, diverse, interesting, and fun experience for players. Eventually, players should be able to identify with the game and their participation. This is achieved through promotions, rewards, incentives, and recognition; tailored to player needs. This includes but is not limited to cashback, retention bonuses, and VIP recognition.
In this article, we look at how casinos can approach player retention as a strategic imperative, capable of a business-wide impact rather than just an ad hoc amalgamation of expedient tactics and initiatives.
How can Casinos pursue a player retention strategy?
Over the years, casinos have been at the forefront of using science and technology. Casinos have understood player behavior to design reward programs in such a way that players keep coming back for more. Land-based casinos that have had a head start of many years over online casinos have perfected mind-boggling tricks such as food, alcohol, lighting, sounds, hotel rooms, and win celebrations.
The COVID-19 pandemic brought about a significant change in the casino business, almost overnight. Online casinos hit paydirt. Land-based casinos grappled with adapting to the new reality of non-physical interactions. The pandemic brought to the fore, the need for a sustainable player retention strategy that not just scales but also adapts to changing circumstances. Therefore, it is important to have a player retention framework, plus the innumerable tactics that casinos nevertheless employ to boost retention.
Framework – The Deming Cycle PDCA
In this medium post, Dan Schoenbaum had proposed a simple player retention framework covering 3 steps – unifying data across acquisition and retention, behavioral analysis for user loyalty, and social features to boost network effect. While Dan’s approach is a good start, it does not address the aspect of “continuous improvement.” Player retention is expected to evolve with changing player behavior. Therefore, continuous improvement will be vital to any framework. The Deming Cycle PDCA (Plan, Do, Check, Act) is an approach that utilizes an iterative approach for continuous improvement. After all, continuous improvement is never-ending. A Deming Cycle approach oriented to the casino business could be a good start to developing a player retention framework. The simplicity of the Deming cycle with its focus on iterations can allow casino owners to quickly implement changes, learn from them, and then decide to either adopt or abandon them. This suits player retention initiatives because they are always evolving across several factors.
Player retention factors
The planning step is key, but the idea of the Deming cycle is to quickly run through all the steps without worrying about perfecting the outcomes. Here is a list of factors that can take a ride on the cycle of Plan, Do, Check and Act. Casinos would do well to add more factors they deem relevant to their business.
Player Lifecycle and User Journey
Tracking the user from start to finish will be an indispensable input to the planning process. Right from which channel the user was acquired from, to how the user behaves while playing the game, to how the user responds to outcomes, and how that influences the user’s decision to continue playing. The user journey concludes with how the user can refer new users through a mix of social proof and incentives.
Unified Data for a single view of player/users
The above medium post has already made a strong case for this. It is understandable. No wonder casinos have full-fledged data analytics teams both in-house and outsourced. The data points related to users/players reside across multiple channels and platforms i.e. websites, apps, CRMs, Ad networks, and financial software. A data management strategy including business intelligence (BI) tools, data visualization software, and a data warehouse, maybe good ideas to consider.
Player profiling, segmentation, and personalization via analytics
Casinos have to know their players, and incentives must be delivered that keep the players excited. Whether it is player behavior or game recommendation, casinos should satisfy player needs while still keeping some room to whet their wants. After all, who does not love a bit of curiosity? Using the data dump of a player’s journey on the gaming platforms, operators can identify patterns to build incentives that move the players forward. Players have their preferred games. No prize money for guessing that. Operators have to identify such preferences and include similar games in their suggestions to rightfully address search queries from players i.e. a user-loved recommendation engine. This reality has to drive player profiling, segmentation, and personalization. Actionable
gaming analytics on player data sets will ensure this business intent. All this will ensure that real value is created for casinos in terms of an increase in long-term players and not just opportunistic bonus hunters that churn after welcome incentives runoff.
Unlimited internet access on mobile has made users demanding when it comes to user experience. Some of the most used apps on the planet – AirBnB, Uber, DoorDash – are continuously generating ‘aha’ moments for their users. The same users expect no less whether they are playing games on casino platforms, desktops, laptops, or mobile devices. Poor user experience will cause churn, or at worst, drive players to competitors. Even the VIPs expect a smooth user experience to continue engaging with their bets.
Incentives, Rewards, and Recognition
Rewards are key to driving desired player behavior towards engagement. Engagement leads to retention.
- Rewards – As a player starts, operators award bonus currency to catalyze investment. Investment drives engagement and kicks off the investment-engagement-retention cycle. Ironically, a casino makes money when the players lose. Incentive programs have to ensure that a bad streak does not result in player churn. Cashbacks, retention bonuses, clever loyalty programs, and memberships are some best practices.
- VIPs – With VIPs casinos have been ahead of the recognition game. VIPs demand special attention, extra respect, and at times even a kid glove. Land-based casinos are better placed in managing VIPs, with some even boasting a VIP relationship management program. Online casinos are closing in because recognition programs like VIP have become a good indicator of successful casino operations.
Player retention for a VUCA future
VUCA (volatility, uncertainty, complexity, and ambiguity) describes the world we live in, very well. It is no different for online casinos and land-based casinos. The global market is putting enablers in place. In 2018, the United States legalized sports betting. This triggered the interest of US players in several online gaming players in the UK and Europe. Some of this interest is also being driven by emerging player preferences in the US market. Then there is blockchain. Blockchain would eliminate the need for any central authority to authorize bets. Blockchain will allow for all the bets to be placed across a network of computers. Some commentators are also heralding Blockchain as the force that will make online casino gaming legal across the world. In all this excitement, do not expect the player to stay still. After all, this won’t take a lifetime.