Predicting and analysing the churn rate of your online casino is crucially important: this information is key to improving your performance and growing profits. Why did players leave the platform? How likely are they to come back? How can you reacquire them, and what are the steps to minimize the churn rate? Read on to find out.
What the churn rate is and how it is calculated
Churn, or attrition rate, refers to the percentage of users that stop their activities and leave the platform over a given period of time. It is basically the opposite of retention — it indicates how many players registered and played on your platform, but ended up leaving it.
Today, every gambling site aims to prevent churn. With the help of existing techniques and CRM-strategies, you can keep your customers active and significantly reduce the churn rate. There are two numbers to keep in mind regarding a business’ churn: customer churn rate and revenue churn rate. Here is the customer churn rate formula:
Let’s look at an example. If your online casino begins a month with 10,000 users, and by the end of the month only 8,000 of them are still around, it means that 2,000 players left. So, your churn rate would be:
2,000 / 10,000 × 100 = 20%
Some companies prefer to focus on the revenue that could have been obtained had their users not left. The formula for calculating the revenue churn rate looks like this:
In our example, 2,000 gamblers left the online casino during the month. If their average payment was $1,000, and they performed on average seven payments per month, the revenue churn rate would be:
2,000 people × $1,000 × 7 payments = $14,000,000
Statistics show that if a gambling company increases the retention rate by at least 5%, its profit can grow by up to 95%. It is worth noting that many marketers believe that reducing the churn rate should be a priority in any company, regardless of its activity.
Why players churn
Understanding why players leave your online casino platform will help you improve your business. It is always good to investigate the reasons, maybe asking directly to the players. They are generally happy to share their negative experiences with you, letting you know what went wrong. This knowledge will allow you to work on a win-back strategy or improve your product to lower the churn rate going forward.
22 October, 2019
User Acquisition and Retention: Overview of the Top Tools
Players can churn at any point in their journey - this is a parameter that needs to be analyzed. Some issues can discourage a user from the beginning of their experience on the platform, while others manifest themselves after weeks of playing. Understanding what is causing the churn allows operators to plan a win-back strategy and decide whether pursuing it is worth the time and effort required.
Below is a list of the most common issues known to cause churn in online casinos.
Registration or verification failure
Any technical issues with the sign-up or verification processes can be disastrous for your business. Whether it's a faulty registration form or a problem with uploading identification documents, you risk losing customers right at the beginning of their life cycle. What's worse, if players cannot easily withdraw their funds due to technical issues in the casino's verification process, you'll have quite a fire to put out.
Payment system failure
This is the most sensitive part of the whole experience on a gambling platform. If a player wants to withdraw and the transaction is not completed promptly, they have a solid reason to leave right away.
Your competitors have better offers and bonuses
The iGaming industry is growing and developing very fast, and it is one of the most competitive industries around. For this reason, each iGaming company tries to stand out with sign-up bonuses, special offers, and marketing tools such as jackpots, tournaments, and free spins. It's hard to imagine that an online casino could be successful in this market without offering any boon.
Your catalogue of games is not vast enough
Top brands have a vast catalogue and years of experience in the market, making them hard to compete against. Their offer is based on experience and the analysis of players' preferences. Newer operators do not have this experience to rely on, which is why they have to provide the broadest possible range of gaming content. By allowing players the freedom to choose, operators can gather intelligence to hone their offer. We recommend you to pick different types of games, including live dealer games, slots, and table games.
The games offered don’t respond to market demands
If your online casino offers a mix of classic and modern games with lots of features and attractive bonuses, you're on the right path. If your catalog doesn't contain what the market you operate in is looking for, however, you'll have a hard time retaining players. To avoid this, choose your providers carefully and analyze the market in depth.
Your catalogue isn’t updated regularly
You can have the most comprehensive and innovative catalogue, devised specifically for your market, but that doesn't mean you're set for good. Players get tired of games and love to try new releases. If, after some time playing, they do not see any updates to your offer, they're most likely to churn.
Poor player support
Customer service is arguably the most crucial department in your company. Interacting directly with the players, it's tasked with solving problems and making clients feel they are taken care of. Support is there to make everything smooth and quick, to let customers know that it is safe to stay and fun to come back. If this service is slow, impolite, ineffective, or unprofessional, your players will leave.
Inadequate search and navigation tool
Ease of browsing is essential: players shouldn't be forced to scroll endlessly to find the game they are looking for. It's best to provide a clear layout and tools like a navigation bar or a search box.
Wrong bonus calculation
If you promise players a bonus, it should be properly calculated and paid out on time. If players don’t get what they were promised, they churn, and the chances to get them back are very low.
17 September, 2021
Problems online casino operators face and mistakes they make
Poor currency and language support
Ideally, you want to allow players to use their currency of choice, or at the very least that of the market they reside in. The same is true for language support: if users don't understand the product or its terms and conditions, they're more likely to churn in favour of other platforms that better meet their needs.
How to prevent the outflow of players from online casinos
Determine the reason
To prevent client loss, start by identifying the primary triggers. You’ll want to communicate with your customers to understand which parts of the product need to be changed or improved.
27 December, 2022
Real-time marketing for online casinos
Offer a wide range of games
Any online casino should provide a wide range of games from well-known software developers. Moreover, you should constantly enhance your catalogue: add titles that are popular in your market, keep up with your providers' scheduled releases and diversify your offer as much as possible. This retention effort helps to reduce the churn rate.
Stand out from your competition
Understand what makes your product unique and take it to the next level. You can add live dealer games to your catalogue, run tournaments, offer great bonuses, or create a loyalty program.
Maintain a proactive approach
You have to learn to look ahead, predict possible issues your players might encounter, and find solutions before they turn into a problem. Answer your players' questions before they ask them and communicate with them efficiently, announcing the latest updates, features, and product improvements – any interaction will increase your brand awareness.
Reacquisition: online casinos’ win-back strategy
Once you know why your players leave, you can take measures to fix the problem and minimize the churn rate in the future. You can also use the information so acquired to create a win-back strategy — a solution to try and recapture players lost to the churn
Before reapproaching the players, operators should think about the effort needed and the likely results. Is it worth it? Your reacquisition plan will come with costs, and its effectiveness will largely depend on the quality of the planning. Before implementing a reacquisition strategy, operators should ask a few questions:
- How high are the chances that a player will return?
- How long will the player remain for after their return?
- Will the player be profitable enough to be worth the attempt?
These questions require some guesswork, but they are essential nonetheless. The first two can be answered considering the reasons why players churned. This is where your analysis comes in handy: if, for example, players left the platform because of a lack of exciting games, you can safely assume that they might return and stick around if you can offer them a more extensive and diverse catalogue. If, on the other hand, the player has left because another casino offered better bonuses, then they will be tricky to retain going forward without continuous incentives. In this case, your reacquisition efforts might not be worth it in the long term.
Remember that reactivated players will also have to go through a retention process, so getting a player back to the platform is only the first step. You don’t want to invest time and effort in winning back a customer that you won’t be able to retain.
Next, consider how profitable this player will be. While it's impossible to be entirely accurate, you can come up with an estimate based on the player's previous experience on the platform. Will the player be profitable enough to warrant your reacquisition efforts?
Once you have identified the fraction of players lost to the churn who are likely to come back to your online casino, stick around, and play enough to be profitable, it’s time to devise an attractive win-back strategy.
To gain the players’ trust back and motivate them to return to their online casino, operators tend to offer bonuses and improve their services and products. It is worth noting that combining these two win-back strategies brings the best short-term results, players that are reactivated this way are not likely to stick around for long. On the other hand, using just one of these techniques reduces the win-back rate but offers better results in terms of increasing the reacquired users’ second lifetime.
Another thing to keep in mind while reacquiring churned players is that their initial experience's quality plays a fundamental role in your win-back efforts. Notwithstanding the issues that made them leave the platform, reactivation would be much easier if their first experience had positive sides you can appeal to. The best way to avoid churn is to offer a quality product to begin with, and Slotegrator can help you with that.