Is the 'free spin' worth it?

When I worked at Betfair and Unibet, I remember hanging out with the casino marketing teams and one of the most consistent themes was bonusing. Bonuses seemed to be that blunt instrument which everyone used to open or close the doors to new customers. Going back to the title of this article: are bonuses worth it? Let’s break it down a little bit.

Ecosystems
I love the ecosystem thought framework because it is easy to understand at a high level and helps make sense of huge complexity. In ecosystems you can often isolate a few critical levers that go on to affect everything. Arguably the biggest lever in our lives is the power of the sun – it affects everything. In government, it’s interest rates, while in gambling marketing, it’s bonuses.

If you’ve ever worked on the operator side, you will have heard war stories of bonuses that were just too generous. A miscalculated free bet for the Grand National and then 200,000 new accounts later, the sweaty realisation that you just burned through millions of pounds in the hope of some payback at some point in the future. I’m not guilty of that fail.

Awareness
This might sound random, but bear with me. You’re driving along and in the corner of your eye you see a ball bouncing onto the street. You brake suddenly and avoid running over a child. Roughly 95% of all the information we absorb is subconscious. Black Friday and riots in supermarkets for ‘once it’s gone, it’s gone’ offers is the same dynamic – we know when it’s a really good deal.

Wisdom of the crowds, the idea that enmasse people are exceptional at judging a situation. All in all, humans are hyper aware (when they’re interested) and as a group that hyper-awareness grows exponentially powerful and astute. Of course, we’re social animals and can be steered left or right. Governments know this and so do good marketers.

The question is, do we really need bonuses and which way is the industry going with bonuses? In my view, operators work in a self-regulated ecosystem where they are watching each other constantly and when one offer from a prominent thought-leader brand gets a lot of attention, the others follow.

It’s easy to see why, because we all know giving away money wins customers and if we know someone is successful, we follow them. The catch is that customer group-think knows when an offer is in their favour or not. Somebody will dig out terms and conditions which show a bonus has a high wagering requirement, it goes out on the forums and then everything goes flat.

If you’re a big brand and you have a ton of cash, you can do marketing to ‘noob’ consumers who don’t even know what wagering requirements are and if the bonus appeals to their worldview, it’s going to work. A good example is Sky Bet’s £10 free, Coral’s deposit £10 get £50, and other £5 free opening offers.

It’s a small amount of money and so it’s disposable. But if you’re not a big brand that can advertise to the mass market, you then rely more on serious gamblers who intuitively know what a good bonus looks like. In this ecosystem the bonus numbers get much bigger, just to grab attention.

And then you have the free spin. What’s the dynamic there? Free spins have got the same make up as free samples in the supermarket. The marketing theory says: we follow a number of set behaviours based on the stimulus of giving and reciprocating. Marketeers align themselves around the notion of reciprocity, in our case the giving of free spins.

Reciprocity
You receive something, you feel bound to return the favour. Of course, in our normal lives if we don’t reciprocate, people think we’re idiots and don’t want to know us. It’s a prerequisite to functioning in society.

But is gambling normal ‘society’? I don’t think so. Customers see us as a service and as the adversary. If we’re the enemy who they want to win money from, then why would they want to reciprocate if we just give them bonus cash with lots of terms and conditions?

Free spins are the free samples of our world. We do them at Oshi and I’m yet to be convinced they will help us. Following on from my comments earlier about people having a ‘radar’ for a good deal, our database has grown more in the last two months than in the previous year.

Fortunately it’s a very cheap way of acquiring an email database of potential customers. Inevitably, I’m not seeing much reciprocity with free spins. The conversion rate is terrible, but our plan is to iteratively improve our casino experience and only communicate to these free spin players when we’ve got something worth saying. Hopefully we will reach that tipping point where we’re fundamentally more attractive than the rest and then they convert.

Commitment and consistency
You can argue that bonusing framework can fall within the commitment and consistency paradigms – you always give good bonuses and you’re committed to customer welfare because you give them free money. The problem is people gamble for variable outcome. If bonusing is as expected, then where is the variable outcome? That free money just becomes an expectation and not a pleasure.

That’s why I think gambling commitment and consistency centres around dealing with customer welfare. Being consistent with terms and conditions along with judgements customer services people make and above all the fairness by which decisions are made.

I liken it to governments, laws and the judicial system. Whether you like the judgement or not, if you feel the government/operator is consistent and fair, you will trust that country/brand more. Since bonuses are pretty simple and system driven, they generally don’t go wrong. Until something ‘breaks’, a customer will never know how consistent or fair an operator actually is.

Liking
Simply, if someone likes you, they’re more likely to say ‘yes’. For egaming operators, being likeable on first impressions comes down to whether they like your brand. Do they like your ad campaign? Do they like the colours on your website? What about the pictures? The games they first see?

Paddy Power obviously does a great job of being likeable. They’ve created powerful associations between the brand, their colours and their overall communication tone. Do bonuses on their own make a brand likeable? No, if anything, being too aggressive on bonusing without getting the other fundamentals right just makes you a needy brand that is ready to be abused.

I’ve been that needy brand getting abused and it didn’t work. When I look through our data, we attracted lots of heavy bonus abusers who were sucking the profitability out of our company. In turn it meant we weren’t developing new features fast enough because of cash flow restrictions and we weren’t moving to our goal of being a standout casino experience.

That’s why we killed off our most ‘attractive’ bonus offers and hoped for the best. What happened? The bonus abusers driſted away, our turnover dropped by 40%, our profitability grew by 200% and we could start building features and systems which are beginning to make us a standout casino.

Brands like Videoslots, Slotsmillion and Casumo are so strong on the fundamentals when it comes to the casino experience, and they can ease right back on bonuses because they have something more than the rest. They have trust and love. And this isn’t trust like noob gamblers seeing an ad on TV and thinking a brand is trustworthy because it is on telly, this is trust from serious gamblers who know what good looks like.

I think bonuses will stay, because customers expect them as a reward for engagement. It is easy for brands to be abused, so my advice is to always focus on fundamentals like site experience and customer service and as they improve, cut down on bonusing and watch your brand gradually become trusted and loved.

Nick Garner has worked in the egaming industry since 2006 after he joined Betfair as a marketing manager. He moved to Unibet in 2010 to work as a senior marketing manager and in 2012 set up the successful egaming marketing agency 90 Digital. In 2015, Garner also launched Oshi casino.