Online casino development. Loyalty programs

 What are loyalty programs in online casinos?

In this article, the experts of Slotegrator has brought up to speed on loyalty programs in online casinos. What is their importance to the operators of gambling sites? How they affect the business success and why you need to use them in the modern marketing? How to develop and run a successful loyalty program? Read all the answers in the following material by Slotegrator.

What is the loyalty program and why do you need it? 

A loyalty program is a marketing tool aimed at the retention of customers. Currently, it has particular importance for any business: whether it's a store, a travel agency or a casino. Any B2C business depends on customers – the more customers, the more successful your project.

What is the interest to retain customers? Today, the competition in online gambling is flourishing. New gambling platforms are spout up like mushrooms after the rain and all they are ready to go great lengths to get a client. Even the well-known online casinos are constantly inventing new ways to attract players. 

They use all available methods – promotions, welcome bonuses, loyalty programs, loyalty points, etc. Special attention is paid to the high rollers – the players making big bets. After all, they are able to bring a gambling establishment good profits. Therefore, each online casino tries to arrange a personalized approach.

The whole idea of loyalty marketing is to properly build the client experience and to give them motivation and a desire to return to your website again. The reasons why client retention is better than customer acquisition:

•  Costs spent to engage new players on average 8-10 times higher than to retain the existing ones;

•  According to statistics, the operator usually gets 50% of extra profit as soon as the players’ outflow decreases by 10%;

• A large number of regular customers gives stability, reliability and positive reputation to the gaming platform. This reduces the cost of attracting newcomers.  

Online casino loyalty programs 

Today, it is almost impossible to find a gaming platform not having a loyalty program. 

Loyalty marketing in gambling is based on two fundamental psychological motivations. The most powerful one is to provide the user with significant benefits for his regular visits. The second major motivation is status. Loyalty program gives the player a sense of importance and significance in front of a gambling establishment. And the more they play, the higher is their status. They get the privileges, honor, and respect.

For the first kind of motivation, online casinos use a point system. It typically includes depositing, or participation in any games, tournaments, contests – the player is provided with some points, coupons, bonuses, etc. Afterwards, he can use them to play free games, acquiring something valuable, or convert into fiat money.

Ideally, the loyalty program should work in such a way that the user could get such dumping conditions, impossible to receive on any other resource. It will be a strong argument for the player to remain the customer of the gambling establishment.

For a "status" motivation, a multi-level loyalty system is used. Generally, levels are named after precious metals or stones: silver, gold, platinum, sapphire, diamond, etc. – it carries a very strong emotional strain. "VIP" name is very common in online casino loyalty programs as well. In everyday life, it typically denotes the highest status and already became a cliché.

Various indicators may determine the player’s status. For example, size of deposits, number of games played for a certain period, the frequency of visits to a gambling site, etc. The main task – to push the client to achieve a higher status. This is a very strong psychological motivator. 

An important point here is that the status has to be recognized by the player, close and trully accessible. Then he will return to the gaming house not only for the pleasure of playing and winning, but also to raise the status. 

Both types of motivations give online casino marketers a huge field to create exciting and exclusive offers. It is desirable that your loyalty program is the most original, customer-oriented and different from the competitors. Then it will give a noticeable effect.

Development of the loyalty program 

The most important thing to remember before you design a loyalty program is the customer needs. History knows a lot of very creative, in terms of the marketing theory, loyalty programs that proved totally disabled in practice. 

The development of the loyalty program requires creativity. You can build up an already existing one by adopting the competitor's approach. However, the effect is unlikely to reach the expected, and the costs of implementation may exceed the budget. 

Therefore, experts of Slotegrator recommend focusing on the needs and preferences of your target audience.

Once you identified the wishes of your customers, it is necessary to organize the data collection and statistical analysis of player activity. What games they prefer, how much and how often they make bets, how much time they spend on the site, etc. This information is essential when developing a system of loyalty points. 

You also need to sort out the players by groups. It is necessary to form the hierarchy of all customers in the gambling establishment by assigning them certain statuses.

Moreover, today, there is a common practice when the gambling resources unite for collaborative retention of players. Online casinos may use scale loyalty programs that span multiple sites to provide higher and more diverse services. 

It gives many advantages, e.g., joint tournaments or draws, targeting at the expanded audience, etc. What is more, the players benefit from such programs as well since they are not tied to one particular gambling establishment. They have a wider choice what is extremely important for modern Internet users.

The launch of the loyalty program and its KPI's

Before you launch a loyalty program, it is recommended to test it on the group of the most loyal players. Thus, you will be able to see the shortcomings and deficiencies to be corrected. When the performance of the program will be brought to the highest level, it can be implemented widespread.

You should not forget about the subsequent management and improvement of the loyalty program. These actions must be based on continuous analysis of customer behavior. Loyalty program should be be continually modernized in accordance with the rapidly changing gambling trends and preferences of the players. 

Thus, Slotegrator company distinguishes several main stages of the loyalty program implementation:

After the launch of the program, the issue of assessing its effectiveness raises. 

The simplest and most objective way is analyze the key performance indicators (KPIs) expressed in the behavior of players. 

When discussing KPI's for online casinos, the following indicators should be considered:

• Participation coefficient. The ratio between all the players and those involved in the program;

•  Activity. Percentage of players actively using loyalty points;

• The period of inactivity. The period for which the participant has not played/not visited the site

• The churn rate. The percentage of players who have left the loyalty program. Usually, they stop visiting the site as well. 

• The loyalty level of the player. Indicates the degree of readiness of the regular visitors to play more. Calculated as the ratio of loyalty program members who are playing more often to the total number of participants; 

• The cost-effectiveness of the program. Comparison of financial results before the program implementation and after. Also, it is necessary to consider the costs of development, introduction, and implementation;

• The share of revenues from regular players. 

This is a sample list of basic indicators for performance evaluation. Each operator has to compile an individual list. It is necessary to include the most important factors and use them during analysis. When evaluating the performance of the program, it is important to focus on the long-term prospects. Then the loyalty marketing will be most useful for the business development.

Why loyalty program may not work and how to fix it?

Slotegrator experts highlight several major reasons why a loyalty program may not work in gambling establishments:

• Worthless program. Not giving players any tangible benefits and does not make the area competitive;

• Lifeless program. The program is not developed , and a player doesn't receive any interesting offers for a long time;

• Too complicated and incomprehensible terms and conditions of participation;

•  Lack of originality. The program is no different from those offered by competitors;

• Unattainable or difficult to reach levels/loyalty program statuses;

• Poor opportunities to spend the accumulated points. The proposed options may be irrelevant, unprofitable or unstimulating;

• Wrong target of the loyalty program. It sometimes happens that only those players who are already loyal to the gaming house get benefits of using the loyalty program;

• Improperly established communication with the client. When the players simply don't know about the benefits of participation in the program, the additional privileges, bonuses, promotion, and have no idea about some fundamental changes in it;

• Technical errors. If the program was not properly debugged, some fails of a technical nature might arise. For example, the disappearance of bonus points, miscalculating, errors when using points, etc.

A comprehensive analysis of the shortcomings and their fixing will help correct the situation.

Conclusion

It is important to remember that the loyalty of online casino users can be reached through the participation of both parties. Therefore, the operators cannot focus only on their own benefits. For its part, the players provide operators with the information about their preferences, while online casinos analyze this information and use it later to form a mutually beneficial relationship.  

A properly structured loyalty program, according to statistics, can increase business profitability by 20% or more. It stimulates players to play more often and forms an affection to a particular gambling establishment.