The battle for hearts and minds

The gambling industry is awash with endless customer promotions, whether that’s free bets, price boosts, money-back specials or other – sometimes loss-leading – offers. Inevitably, promiscuity is rife as customers dart from one firm to the next, taking advantage of all these bonuses, which means leading firms have to shell out eye-popping sums on marketing and offers just to be heard above all this ‘noise’. For instance, Paddy Power Betfair has access to an annual marketing war chest of £300m, while rival William Hill’s online arm spent £122m on marketing last year, or 22% of net revenue. But with all these indispensable marketing costs, increased taxation, onerous regulatory and compliance costs, not to mention eroding margins, operators are being squeezed from all sides.

It’s why retaining profitable customers is so important, especially when it costs significantly more to acquire a new user than keep an existing one. However, gambling industry consultant Liam Casey of Bet On Experts is of the opinion that loyalty was more abundant when operators stood out from the crowd with distinctive features. Everything on offer today is just too similar, he suggests. “Loyalty did tend to exist when you had much greater differentiation between operators based on how they dealt differently with customer needs. Bwin was recognised for the depth and breadth of its sports markets, Sports Interaction was known for very fast withdrawals, while Ladbrokes was called ‘The Magic Sign’ because their pricing was generally so on the money.”

With operators heavily reliant upon third-party suppliers for core betting and gaming technology in many cases, the main differentiators tend to be branding and customer experience. “Everything else is highly commoditised,” Casey says. “It’s the same sports, the same games and the same promotions at the same time. On average, it’s four mouse clicks from a current active window to depositing and betting – using a prefilled payment screen – with a competitor today. So it’s never been easier to jump from Operator A to Operator B, and it’s this ease of use that is a significant driver of users jumping from brand to brand.” He also suggests an active UK bettor will typically use two or three betting brands.

Value hunters
Just in the same way we are constantly encouraged to shop around for car insurance or our gas and electricity using price comparison sites, naturally punters can follow suit. Why take the 15/8 with Bookmaker A when Bookmaker B is offering a standout 2/1, right? Some won’t go to the trouble of opening an account with Bookmaker B, though price-sensitive gamblers are more likely to. For them, odds comparison sites like Oddschecker have become an automatic port of call when researching their bets. It’s here that they are confronted by an avalanche of signup offers and the usual bun fight to acquire new users around major sporting events like the Cheltenham Festival. On top of this, Twitter – and now increasingly Instagram – are awash with ‘tipster’ affiliates trying to cajole sports fans into signing up and having a flutter here, there and everywhere.

“There is a core group of punters that override the churning trend and have consistent betting habits” – Mathias Gitz Madsen, Better Collective

Mathias Gitz Madsen, head of business and digital intelligence at affiliate Better Collective (bettingexpert), says: “What we see from our side is quite a high churn [across the industry], which can mean two things in relation to loyalty. One interpretation is that the majority of punters have a short active betting lifespan. If that’s the case, then loyalty to the operators isn’t the issue; it’s loyalty to betting in general. The second interpretation is that these punters are indifferent to operators, and will open short-lived accounts with them based on what offers are available. However, even with a semi-disloyal user base, loyalty still exists among bettors. There is a core group of punters that override the churning trend and have consistent betting habits. These punters remain loyal to individual operators that have taken initiatives to increase retention.”

Dimiter Pantaleev, central customer marketing director for Kindred Group, confirms that the industry faces an increasingly uphill battle to prevent valuable customers from being poached by rivals these days. And this on-going problem intensifies in mature and extremely crowded markets like the UK. “The UK is one of the most competitive markets – quite comparable to Australia and Italy. But in terms of loyalty, this market is maybe the most difficult when it comes to retaining customers at any stage of their lifecycle. Most customers are not connected to a specific brand as they can be in, say, retail – hence, they choose a betting brand because of the value they receive from offers and prices.”

In the club
To help curb promiscuity, one sportsbook loyalty reward that has been achieving traction is the free bet club. For example, Sky Betting & Gaming’s popular Sky Bet Club doles out a free £5 bet every week for customers who opt in and place £25 of qualifying bets before midnight on a Sunday. The Leeds-based operator has also recently rolled out a ‘Bonus Builder’, which is an additional weekly bonus besides the free £5 bet and is designed to encourage business during this summer’s lull with no major international football tournament taking place. Not to be outdone, William Hill’s Offer Club gives away a free weekly £5 for those who stake a total of £20 or more on football accumulators, while Betway’s Free Bet Club awards £10 in free bets when punters stake at least £25 on trebles or higher in a week.

Then there’s Unibet’s In-Play Free Bet Club whereby users receive a free £10 in-running bet every week when they place five or more £10 in-play bets. Pantaleev says its overarching aim is to retain customers week in week out, and he says it “worked well” last football season. “In such a challenging market [the UK], we saw a trend of these loyalty clubs but wanted to go one step further and encourage customers to bet live and reward them for it. Fortunately for us, this offer had a wide appeal, drawing the loyal football fans that we aim to attract. Of course, we still attracted shrewd punters who would use matched betting to take advantage but this was a risk we were willing to take.”

Everyone loves a freebie or a thank you of some sort, so it’s easy to see why these bet clubs are spreading, turning betting with a particular firm into a weekly habit for many. While these bet clubs will eat into operators’ margins, they increase loyalty among swathes of low-stakes punters who religiously place higher margin bets like speculative football accumulators at weekends. “The weekly bet club-type offers are targeting a particular type of active player who isn’t overly price-sensitive, enjoys a punt and is likely to be cheaply ‘bought’ by a recurring offer,” says Kevan Edgerton, head of CRM and loyalty at African operator Editec. “Pinnacle, for example, is unlikely to run that sort of offer but Sky Bet will make a big deal of it. Again, different propositions suit different players.” As Edgerton points out, Pinnacle is a brand that swims against the tide and eschews handing out welcome offers and retention bonuses.

Instead, the Curaçao-headquartered operator lets its competitive pricing, tight margins and high limits do the talking. This approach means Pinnacle is a favourite among higher staking bettors. Most low-stakes bettors probably wouldn’t recognise the Pinnacle name or brand, despite it being around almost two decades. “I believe this constant and reliable value gives Pinnacle the foundations for much stronger long-term relationships with our customers, and as such it ensures their loyalty,” explains marketing director Harry Lang. On the topic of loyalty generally, he continues: “Most experienced gamblers are price conscious and, as such, they seek out the best deal, often flitting between three or more bookies and using odds comparison sites to find the best price. Other drivers include trust, convenience and bonus incentives [but] once customers get settled with a bookie they trust, inertia and familiarity tend to set in and these are key drivers of product loyalty.”

A special connection
Certain brands from fields like technology, motoring and fashion have become some of the most trusted and respected around. Indeed, many consumers forge personal connections or affinities with household names despite the fact they’ve probably never got their hands on a Lamborghini, a Rolex watch or a Louis Vuitton handbag. Gambling companies aren’t selling physical products, of course; it’s a service, a form of entertainment and the chance to win money. “Our products are not tangible so it’s difficult for a customer to become emotionally attached to our offering, which complicates loyalty building,” says Pantaleev. But that doesn’t mean egaming operators have been unable to build distinctive and unique brands. For example, Paddy Power’s risqué, tongue-in-cheek marketing combined with audacious PR stunts and a well-oiled social media machine pumping out amusing content, has helped the Irish operator’s name transcend the world of gambling.

“Our products are not tangible so it’s difficult for a customer to become emotionally attached to our offering” – Dimiter Pantaleev, Kindred Group

Meanwhile, BetVictor positions itself as a more sophisticated betting company with phlegmatic ads that have lampooned some rivals’ brash and ‘laddish’ commercials. Even bet365 has toned down the deafening ads lately, opting instead for more calm and measured messaging, highlighting how sports fans across the world unite to bet with the world’s largest sports betting company. “Some people become loyal Audi drivers or Apple aficionados because they buy into the brand promise twinned with the product’s perceived quality,” Lang remarks. “For us online bookmakers, we have ethereal brands offering different ‘products’ in the form of odds every second, which look very similar to each other on the face of it. Value is the only real differentiator, and as such there’s less opportunity to achieve true brand loyalty unless this value can be delivered reliably and constantly.”

For Edgerton, who previously held CRM roles at the likes of Panbet, Betclic Everest Group and Sporting Index, the gambling sector is more about building personal relationships with customers in exchange for their loyalty. “As the industry matures and gets ever more reliant on maximising value from existing databases as opposed to just acquiring thousands of players with varying LTVs, there is much more focus on providing players with a robust, consistent, quality experience. This is via targeted, relevant communications and generally acknowledging that customer experience is a key factor in how long they will remain as an active player.”

He also stresses that firms need to view customers as more than just a revenue stream. “They will appreciate this and churn rates inevitably, on the whole, will improve. It comes down to appropriately targeting players with the right communication methods at the right time about the right event, providing an engaging incentive to bet, whether that be bonus-led or not, so that those who are more ‘promiscuous’ in terms of holding multiple betting accounts at once, see the value of betting with you rather than rival bookie X, Y or Z. Headline loyalty schemes are great and serve a specific purpose [but] you have to go deeper than that and drill into why individual player behaviour is what it is and how you can influence it to maximise the incremental value from your CRM efforts.”

Established names
For operators like William Hill, Ladbrokes, Coral and Paddy Power, having shops on the high street is a clear advantage when it comes to brand awareness, not to mention aiding multi-channel and omni-channel efforts. William Hill, which in 2016 had 2,375 of the UK’s 8,700 licensed betting offices, has also been laying bets for over 80 years. For Ladbrokes, it’s even longer. Likewise, Victor Chandler (rebranded to BetVictor in 2012) was a bookmaking dynasty until Chandler Jr., known as ‘The Gentleman Bookmaker’, sold the 70-year-old family business in 2014. As
with most industries, this sort of heritage and ubiquitous retail presence for certain operators resonates with consumers and suggests a reputable brand you can trust. They’re no fly-by-night cowboys that will scarper with your readies.

Nowadays, though, online-only brands like Betfair, Sky Bet and bet365 have firmly established themselves as industry giants with widely recognised brands. “Bet365 is fostering loyalty via great brand and customer experience,” Casey says. “They sometimes get forgotten for innovation, but they consistently surprise and delight their customers with new experiences. Paddy Power is doing it in the same way but simply don’t have the same scale, and Sky Bet has done a great job via product experience and offering consistency when they roll out new features.” Sky Bet is able to leverage the Sky brand to full effect while using the satellite broadcaster to promote free-play games like Fantasy Football and the hugely popular Super 6 game on a Saturday. Paddy Power and BetVictor also boast free-play games (Hotshot Jackpot and The Million Pound Goal) with head-turning prizes – all primarily designed for cross-selling purposes and building loyalty.

Sometimes, though, whether or not a customer remains loyal simply depends on the level of funds resting in the account. If they have had a winner will the winnings be recycled or withdrawn? On the flipside, will they return if they’ve lost money and emotions come into play? Or will they churn if the balance hits zero? “Customers get annoyed if they lose in the short term,” says Casey, “but if they have a consistently good brand and product experience they will return.” That means having first-class desktop and mobile products, quick and convenient payments, great customer support and relevant and compelling loyalty programmes. Winning the hearts and minds of today’s bettor is about having the full package. Pantaleev concurs. “Kindred Group has invested a lot in UX and CX the past few years, whether it is improving the site navigation or payment speed – this all helps build long-term loyalty from our players.”