Oddschecker's Guy Harding: Are customer bonuses becoming redundant or do they remain a necessary evil?

Oddschecker's Guy Harding: Are customer bonuses becoming redundant or do they remain a necessary evil?

Wednesday, October 11, 2017 Posted by Luke Massey
Harding explores alternative methods for customer acquisition

For a long time, bonusing has been a key acquisition driver for operators. However, given the fiercely competitive nature of the industry in 2017, operators have been forced to consider the imbalance between customer incentives and the impact they have on final margins, while assessing the sort of customer that takes advantage of a bonus and whether they are still as effective as they used to be.

We caught up with Guy Harding, Head of Commercial at leading industry affiliate Oddschecker, to discuss ‘leaked value’ to the customer, a rise in the number of bonus related disputes, and whether the concept remains a ‘necessary evil’ for global operators.

Totally Gaming: Do you believe that customer bonuses are becoming more redundant, or do they remain a 'necessary evil' for most global operators?

Guy Harding: Bonusing is certainly losing its sheen from an acquisition perspective. Punters are becoming far more promiscuous, most punters will have 3 or 4 online accounts, our users tend to have 6 or 7, this means that their propensity (and by definition ability) to seek out the best prices is increased. So yes, I’d say price and e/w offer terms are starting to reduce the relevance of bonusing.

Furthermore, established brands such as Hills have adopted a ‘volume to value’ strategy whereby they have given greater emphasis to the retention of high value customers at the expense of low value, offer-hungry players with far steeper churn profiles. What this means is that marketing budgets which can amount to almost a third of some bookies’ revenues will be repositioned towards retention marketing.

There’s also a real danger that we follow the Australians down the prohibition route. By June next year, all sign-up and retention bonus bets down under will be scrapped.

Finally, the recent tax adjustment which brings the tax treatment for gaming free plays in line with sports betting means that UK facing bingo and casino operators will either have to accept greater tax burdens or dial back on their free spin offerings. Without the differentiating pricing levers at the disposal of sportsbooks, more than ever online casinos will view bonuses as a necessary evil.

TG: From your experience with Oddschecker, if you were now working for an operator would you focus on other USP's to avoid this leaked value to the customer?

GH: Yes. The key balance which all of our successful partners exhibit is delicate mix of price and brand.  Even our perceived price sensitive punters will side with poorly priced sportsbooks if their product is strong and their brand awareness is high. Oddschecker presence is a must, I am going to say this aren’t I, but any bookmaker which wants to be taken seriously in the UK market needs a presence on our site. Given that almost two-thirds of all UK online punters consult one of our platforms at some point in their betting journey, not being on ‘the grids’ speaks volumes.

But being stand out best price - although helpful - isn’t the be all and end all. Marathon and Blacktype have managed to utilise Oddschecker very successfully via price-led messaging but at the same time Paddy Power and Sky Bet can command the lion’s share of Premier League 1x2 bets whilst being the two widest priced operators. The reason they can get away with it is their branding. It’s very very strong and innovations such as Request a Bet make punters stickier in an ever more competitive market.

As with all of these ideas though, they’re quickly copied and the USP dissipates. Bookies need to be on their toes, all of the time. For instance, PPB’s boss admitted that Q1 was far more competitive than he thought it would be. Breon highlighted the US Masters as an example – PPB offered pay-outs on 8 places, which was matched by Sky Bet, Bet365 and William Hill – he thought this would be a more unique offer. There are copy cats everywhere. As Breon discovered to his detriment, USP’s lose their ‘U’ very quickly in this industry.

What next? Well, at the weekend, I was reading in the Guardian about Will Duff Gordon’s venture which explains how GPS tracking on horses could open up a whole new range of bets; imagine being able to create a RAB on Barney Roy to lead after one furlong plus Enable to lead two furlongs out and Winx to win the Prince Of Wales.

TG: Do you think that a rise in the number of bonus related disputes, principally from a lack of clarity over T&C's, will see operators turning to alternative acquisition methods?

GH: I actually spoke on Radio 4 about this last Christmas. The terms and conditions offered by bookmakers are currently being investigated by the CMA and we expect an update in December. If certain unscrupulous operators pursue a bonusing strategy with overly onerous or opaque terms it has the effect of tarnishing the attractiveness of the offering across the industry.

The main things the CMA are looking at are the clarity of the offer before sign–up and restrictions to withdrawal. As the UK’s leading Odds comparison site with well over 2 million unique users a month, it is very important for us that our users know and understand the terms of the bonus before they sign up and we work closely with our bookmaker partners to ensure that this is the case.

Perversely operators could actually welcome any crackdown given that bonus abuse which is concerted and organised, albeit legal exploitation of the offering, is purported to cost the industry £20m a month.

TG: What big changes in delivering customer personalisation do you expect to see across the industry in the next 12 months? And do you expect bonusing to be a key part of this strategy?

GH: I actually think the industry is pretty poor at this. Despite the fact I never bet on US Sports for instance my eyes are still harassed with NFL, MLB, NBA offers/prices whenever I log in. Instead I should either be given a soft introduction to such betting opportunities or not exposed to them at all. Wasted pixels in my honest opinion. Being able to build a stable, or reminded of when a previously backed horse is running are also features I think bookies should adopt.

Many would argue however that with the advent of RABs, Ask Paddy, Your Odds type bet building the journey is already very personalised. That said, surely it won’t be long until the punters realise how poor the value is from these offerings. I guess without bet homogeneity, Punters Champions like Oddschecker are unable to point the punter in the direction of the best value offering.

Guy Harding is one of the key speakers on the ‘Customer retention and acquisition: Beyond bonuses’ panel at EiG 2017 (30 October – 1 November), focused on customer bonuses as an acquisition tool, managing data for better customer personalisation and retaining higher value players.

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