Online casinos have been around almost since the dawn of the internet and this means that they probably have more historical data than any other type of business.
Over the years casinos have used data analytics to adjust their customer offering to ensure that they are giving the customer exactly what they want which in turn means greater profitability.
So how do online casinos actually use data analytics and can other businesses learn from this model?
In this post we’ll look at;
- Customer behaviour and the IoB
- Website UX
- Community building
- Offers and gifts
- Free to play
- Payment options
- What we can learn
Customer behaviour and the IoB
The collection of data has come a long way in the last few years and with the advent of the Internet of Things (IoT) data availability is better than ever.
Alongside this big data processing capability means that analysis can be done from the micro to the macro levels.
This has spawned a whole new class of analytics expertise in the Internet of Behaviour (IoB).
This discipline examines consumer behaviour and looks for ways that this can be harnessed to provide services that will appeal not only to existing customers but also to entire sections of the population that would never dream of using an online casino.
One of the most striking uses of analytics that casinos employ is that of User eXperience (UX).
Understanding how people use the website, what they look at, how far they scroll, what elements are most effective are all things that can be identified using UX analysis.
One of the most surprising aspects of UX is that simple changes can make a huge difference. For example, the placement, colour or even the shape of a button can alter the uptake of a particular offer massively.
Understanding the customer journey through the website and producing heatmaps to show what people are looking at and what they click allows designers to adjust each element so that it is working to its best potential.
What type of customers are likely to be attracted to an online gaming community? Are there types of communities (poker, bingo or slots players) that would appeal to different types of users?
The community-building aspect of casinos is something that has really taken off in recent years and understanding what communities will appeal to individuals allows them to be introduced and inducted into forums, chatrooms and message boards as a way of fostering a sense of belonging.
If people feel that they belong then they will return more often to the site, will spend longer there and will tend to be more loyal to the business itself.
Without a competent data analytics capability, casinos would have to use a scattergun approach and offer every community to every player which is unlikely to have the desired effect. Understanding people allows them to be directed towards the right community for them.
Offers and gifts
Understanding the potential of offers and gifts is vital for the profitability of casinos and other businesses can certainly take a leaf out of their books here.
On one hand, the casino needs to know the size of the free gift that is likely to attract customers at all levels into their online casino. But at the same time, they need to be sure that they are not offering a larger gift than the LifeTime Value (LTV) of each customer, otherwise, they are going to lose out on the deal.
This is a form of Price Elasticity of Demand (PED) and this is an important concept for all businesses. In other words, what is the price that produces the best profitability for your business?
The more free gifts the casinos give away the more customers they introduce but if they give too many gifts or free plays then eventually they lose money on each customer and so the exercise is self-defeating.
Free to play
Free to play (F2P) is an established concept in the world of online gaming and describes the process of offering customers free versions of games that allows them to play without risking any money, but of course also without any winnings.
The problem here for casinos is that offering free games costs money in development and support time and of course server space.
So at what point does it become pointless offering F2P options with customers just sticking to the free version?
And what extra features or services would persuade them to move to the full version?
Understanding customer behaviour allows the casinos to tailor the free versions of their games to encourage people to move to the money casino by limiting plays, restricting features or offering gifts and rewards for real play.
There’s a cost to setting up different payment options and most of them have a variety of fees that reduce the profitability of each client.
So the question is; when is it worth investing in taking a different types of payment?
At what point will the number of customers gained begin to outstrip the development costs and recoup the fees paid to the payment processor.
A good example here would be where a casino operator wants to develop a Litecoin casino but needs to understand and develop crypto payment processing capability.
With cryptocurrencies taking off there has to be a point where it becomes important for any business to offer the option to its customers to avoid falling behind its competitors.
Data analytics is a way that owners can assess the viability of specific methods of payment processing and decide when it is the right time to invest.
What we can learn
For any business, a data analytics capability is an exceptionally important aspect of marketing.
Understanding customer behaviour and what they are looking for from a company like yours is the first step on the marketing journey.
Once they become customers then understanding how they interact with your website will allow you to refine your design and targeted offers and gifts help convert visitors into customers.
Offering innovative payment options and building communities will also develop loyal customers and increase website dwell time and repeat visits.
Data analytics makes all of this possible and for any business, it is a very worthwhile investment.