Demystifying Retention - Part 1
The following is the first article in a series published by eGaming Review in their November 2009 edition. Over the course of the next few issues, this series will seek to carve out the critical steps you need to deploy in your business in order to get more out of your retention programme. The copy below may differ slightly from the published version, as this is my original unedited version.
Most CEOs I've sat down with recently are facing the same major challenges: how will we differentiate our brand(s) and products in an increasingly commoditised, saturated gaming market? How can our offering be more compelling, our teams more productive, and our marketing more cost effective? If you are feeling the pressure, trust me, you are not alone.
As a result, more and companies are taking a hard look at their retention programmes, which have long had a strong reputation for delivering excellent business value through its relatively low cost of generating additional revenues. The numbers indeed support it: the cost of keeping a player is less than the cost of acquiring a new one (at least when done correctly and only for a certain length of time). However, most companies have a tough time realising the potential financial benefits in their bottom line.
I recently had the opportunity to chat with a lot of operators following my presentation on loyalty programmes at the EIG Expo last month. While there was tremendous interest generally about loyalty, retention and managing the customer lifecycle, there equally seemed to be a lot of focus on using expensive tools and developing complex schemes and processes that provide little more in terms of revenues than they do in costs for the business.
Retaining players and generating that much sought after additional revenue is critical for every business, but it's not necessary to have a PhD. in Statistics or Financial Modeling on staff to achieve this (at least not to start). In fact, this is the exact reason why CRM has come under attack over the last few years. Companies are over investing their time, energy and money on complicated CRM programmes and business intelligence, resulting in an exponential growth in the people and processes required to support them, effectively washing the real value out of the end-result. While there are some businesses out there that can benefit from these systems, most companies, especially in online gaming, only get caught up in a quagmire of unmanageable products, data intelligence and lists.
Over the next few issues of Egaming Review, we're going to look at the critical areas you need to consider and the steps you and your business can take to start realising the potential financial rewards straight away. Our goal is that by the end of this series, you and your organisation should have the practical knowledge necessary, a set of streamlined processes and tools set up, and be in an advantageous position over your competition to really make an impact on the bottom line. Meet me back here next month as we address the issue of where the real potential sits in your database and how to harness it.
Look for Part II to be published in eGaming Review's January 2010 edition.