Adaptability. This will be the core value in the gambling industry for the years to come in the face of Covid-19. Yet, adaptability only exists by the virtue of a true understanding of your database, players and marketing strategy. Here lies the danger for operators that find themselves in need to adapt, but are confronted in what appears to be a ‘blackbox’ of their business operations. In this article we reveal the winning formula to keep adding value in the future: adaptability + durability = sustainability.
Thus far we can only speculate on the lengths of effect that this virus will have on the gambling industry. We can, however, use this formula as a stress test to give an honest answer to the question: Is my company ready for what players might ask of me tomorrow?
How COVID-19 affects your brand
We don’t need a crystal ball to make some educated guesses about what changes are ahead of us. But more importantly, we don’t even have to look into the future to measure potential success. We simply look at ourselves. We are already seeing different effects of the lockdown on operators. Some thrive while others struggle. We’ll break down the ‘categories’ of operators as to address the individual problems that we are witnessing:
- Sports centric, large brands/groups
- Larger casino centric brands/groups
- Pure play casino brands
- Well-funded, younger, (hybrid) brands
Sports centric, large brands/groups are hit the hardest by the crisis. They will find it very difficult to adapt to this new reality. Partly for technical, and strategic reasons, but also ‘thanks’ to their (older) user base. For them to just pivot into virtual sports, e-sports or switch to being casino focused is nearly impossible. As it stands now, the sustainability of the first category is not guaranteed as they are unable to adapt. For in a storm, grass is more resilient than a tree.
Larger casino centric brands/groups will potentially benefit in the long term, or potentially disappear. They can use this time to expand their user base and even their product range, and will probably have the runway to expand that user base into their sports betting activity. It’s all about how they make the most of this time and their marketing activity.
Pure play casino brands will continue to grow, purely because they can keep doing what they have been doing before and are able to scoop up new players at relatively low cost. In what category do you find yourself?
The definition of the ‘new normal’ will constantly change
Many of the multi-product operators spent most of their marketing resources on Sports Betting marketing. Bringing relatively cheap players which they would hope to upsell to casinos to increase CLTV. Due to COVID-19, this ‘chain’ broke. Operators are finding it hard to fill in the gap the complete shutdown of sports created (low adaptability). To adapt, these operators need to relocate their marketing resources swiftly. A static company culture can prevent the needed transformation. Consultation from outside can give a refreshing perspective on relocating resources.
Even more challenging will be the problem with the largest asset of the multi-product operators: their database. The frequency and total number of relevant contact moments with their database is rapidly decreasing, effectively lowering the value of their database (+low durability). In some cases we’re seeing the players that still want to gamble online move elsewhere (=low sustainability). To a new brand of well-funded, younger hybrid brands (the last category). Only time will tell if they will return to the brand where it all began when things turn back to normal; – the new – normal.
COVID-19 is just the catalyst
COVID-19 exposes underlying problems that have always existed. If the coronavirus never happened lean and mean (and well-funded) operators would have exposed unsustainable operators for what they are regardless. They are keen to profit from the inflexible operators lacking the strength to make changes rapidly. For them the Corona outbreak could be an absolute game changer as it could help them achieve the exponential growth. These operators have been focusing their marketing approach on smart and aggressive, value driven, marketing channels. Many more traditional operators have been struggling with this as they don’t know their audience well enough and have limited control over some of their key (marketing) partners. This means they can’t adapt their input, let alone their output. On top of this they are dealing with major issues with marketing partners where they are unable to get them on board to help them adapt to new realities. The virus does nothing more than revealing a line in the sand that was already there.
Take action
We see the current period as a great time to restructure your marketing (technology) strategy, your product offering and even reconfiguring your brand/corporate strategy. Revenue Engineers have always been on the forefront of digital innovation, helping a wide portfolio of clients with their marketing, opening up new markets & product verticals and making use of smart technologies in order to maintain stable growth even during these unique times. Would like to know whether your business is ready to operate in the new reality? Feel free to contact us via growth@revenueengineers.com