Igaming Focus: Are U.S. operators overlooking customer retention in favour of acquisition? 

Igaming Focus: Are U.S. operators overlooking customer retention in favour of acquisition? 

  • Hannah Gannagé-Stewart, CDC Gaming Reports
August 10, 2021 11:00 AM
  • Hannah Gannagé-Stewart, CDC Gaming Reports

The U.S. affiliate market is a delicate beast. It is yet to mature into whatever characteristics will define it in comparison to its European counterpart. But a recent conference session threw up an interesting question about how heavily affiliates, and operators, should focus on customer acquisition in a new market. 

It’s logical to assume that acquisition should be the initial focus, and U.S. operators have not been shy of buying in audiences with major media deals, such as Penn National’s recent acquisition of the Score and, prior to that, Barstool Sports. Others, such as DraftKings and FanDual, have capitalised on their existing player base and the obvious synergies with igaming. 

But having acquired those lists, and converted as many players as you can, how do you retain them? And are U.S. operators thinking about that enough right now? 

Speaking at the recent iGaming NEXT Bright Future conference online in early June, PlayUp director and U.S. CEO Dr Laila Mintas suggested that retention was largely being overlooked in the U.S. 

“Everyone is focused on acquisition, and not many are focused on retention,” she said, as part of a panel entitled ‘Customer Acquisition and retention in the U.S.’ “So, part of our strategy is to retain the customer. Instead of going out and keep giving bonuses away to acquire new customers, it’s much better to reward customers that you have already, and I think that’s something we will see improving in the U.S. over time.”  

Fellow panellist, CEO of Australian affiliate iRival Media Adam Fiske, agreed. “Sometimes we falsely think about affiliates as just about acquisition, where there’s probably a bigger role for them, or for us and for many companies, to play in retention and re-engagement,” he said. 

With so many operators competing for their share of what will be the biggest igaming market in the world, retention has to be a key part of the strategy. While bonuses and incentives have always been used to great effect as part of the marketing mix in other markets, they can be something of a blunt instrument – and are rarely a favoured option from the perspective of regulators. 

Fisk also highlighted the difficulty in taking too broad of an approach with customer acquisition in the U.S., as organic traffic through SEO or social media marketing will often attract players from unregulated states, which is consequently unmonetizable. 

From that perspective, both Mintas and Fisk agreed that their strategies for both acquisition, and retention, will be to find various ways of segmenting the audience in each state and targeting players with tailored offers and specific products. That may be focusing on certain sports or building campaigns around particular events and tournaments.  

Having both come from the Australian market, Fisk and Mintas welcomed the legalisation of fixed-odds horse racing in New Jersey and its anticipated launch in Colorado soon. Fixed-odd horse betting is a popular vertical in Australia, so both firms intend to use their experience there to cut through in the U.S. Their advice was to avoid trying to be all things to all players and to select key areas of focus on segmented audiences.  

Fisk highlighted the diversity of approaches being taken in the U.S. right now, suggesting that the battle to win ground is taking priority over being strategic about acquiring an audience you stand the best chance of retaining. 

“Just to touch on the bigger operators, we still are seeing different approaches from all of them,” he said. “FanDual has gone for really big, above-the-line spend nationwide, but then going with, I guess, an influencer strategy, right from Charles Barkley down to Tick Tock platforms and things like that.  

“Then you’ve got Penn, who came and invested in Barstool, who would probably say they’re not spending any money on marketing, but they obviously spent the money to acquire that audience. And then brands, who might have these big media deals with an NBC or NHL, for example. But then they’re also rolling out niche products or their points betting product, for example, as a point of difference as well. So, there still is a very big range of different approaches there.” 

With around half of U.S. states now open to legal sports betting, the battle for market share will continue to take priority in the short term, but retention will soon become the differentiator. It’s one thing to build an empire, but another to keep it. Which will be the first to collapse under its own weight?