Lifetime-value and the case for targeted activation and retention strategies

LTV: Part 2

In the last post, we covered why player retention is critical for operators.

TL;DR: the cost of player acquisition is high due to costly bonus expectations and the path to operator profitability is increasing player life-time-value (LTV).

In this post, we will discuss the role of targeted activation and retention strategies in driving player Lifetime Value (LTV) and how Push is uniquely positioned to help. Note: We will cover loyalty programs in our 3rd installment.

Engaging customers early, with strategies that drive usage from the first interaction is critical to increasing LTV. Promotional offers at the first player interaction (e.g. threshold promotions) can help drive early player engagement. To drive retention of your best players, many operators offer exclusive experiences (e.g. special events) or VIP support and engagement.

The challenge is that engagement offers and personalized outreach can be expensive. Scaleo estimated that 20–30% of marketing spend goes to promotional offers. Most operators don’t have the resources to personally call every single new player that joins their platform.

For this reason, you ideally want to focus your best offers and customer service on the truly high value player. Importantly, you want to identify and retain high value players ASAP.

Tailoring offers to high value players can almost double the ROI. Push Cash’s industry-first loyalty feature helps segment players from the first interaction, enabling quick identification of high-value players for targeted activation strategies.

This article will discuss:

• What types of activation and retention strategies increase life-time value?

• What makes a great activation offer strategy?

• How do legacy payment service providers support activation and retention strategies?

• How can Push make my activation and retention strategies more effective and efficient?

What types of activation and retention strategies increase life-time value?

Activation offers

Acquiring a customer can be expensive, activating them is critical to realizing player LTV. Offers can be highly effective at player activation, and if a player goes dormant — reactivation. Generally, there are two types of activation offers

1) Financial offers: “Do X to get Y.” Examples include:

• Threshold promotions: Promotional dollars towards wagers over certain dollar value

• Boosted Odds: Offering enhanced odds on specific events or matches to attract more bets and increase excitement among bettors.

• Parlay Insurance: Customers receive their stake back as a free bet if one leg of their parlay (accumulator) bet loses, encouraging them to place more complex bets.

Retention Strategies

2) Experiential offers: “Receive special treatment as a thank you for playing with us.” Examples include exclusive events or contests for loyal players.

Access to VIP support

Players are provided direct access to service and support with an operator. This personalized support may also come with highly personalized offers.

What makes a great activation offer strategy?

Giving the right offer to the right person — as soon as possible

Many operators will present the same offer to every player, if they have not yet established a history with the player. A $25 bonus can be expensive if it just attracts bonus hunters — and may not be enough to entice truly high value players. Many operators will wait on establishing a personal relationship with a player, until they have established a history of play.

Providing the same offers and treatment to all players can be incredibly economically inefficient. Let’s consider two offers programs, one which tailors (“personalized offers”) the offer based on customer value and the other which offers the same value to each player (“vanilla offers”). As this example shows, tailoring the program to focus just on high value players can have almost double the impact on increasing handle as a plain vanilla program.

How do legacy payment service providers support activation and retention strategies?

The challenge is that many do not. From a payments standpoint, the best way to attract and retain high value players is to let them play on their own terms. However, many legacy payment service providers will cap deposit amounts, or limit deposit methodologies (e.g. wires only). Making customers wait days to get their money back can deter high value players.

While not the focus for this article, Push Cash supports high dollar value deposits and instant withdrawals with a very user friendly experience. All players receive the same easy to use deposit experience whether they are depositing $500 or $50,000.

How can Push make my activation and retention strategies more effective and efficient?

Advanced targeting, from the first interaction

Push Cash can help you truly customize offers based on the potential value of a given user. Push’s unique loyalty feature lets players opt-in to share with you their historical gaming spend. Player’s can opt in to share their bank verified gaming history with the operator. Specifically, they can share their aggregated deposit AND withdrawal amounts from the previous year.

You can use this information to segment your customer base from the first interaction, to create targeted offers for players and drive specific behaviors from high value players. You can use this information to identify which players you want to reach out to personally, on their first interaction to start building that personal relationship.

Instead of offering $50 cash to all users, offer users that have demonstrated high levels of play across multiple platforms truly compelling offers. This level of personalization can help you get more targeted with promotional dollars, cutting costs and increasing efficiency. Importantly, by doing this on your first interaction, you can lock in player loyalty early — and help increase overall player LTV.

Coming soon: The case for player retention part 3

In the next installment, we will focus on loyalty. When should I use loyalty programs to drive retention? What are examples of great programs? How should I think about putting together my program?