Viewpoint – Customer Acquisition Vs. Retention Transcript Part 2



Viewpoint-Part-2This month’s Viewpoint features a two-part interview where Dana Workman sits down with Shahar Attias of Hybrid Interaction and Marc Kenigsberg from Euro Partners. In the second part of the interview, they discuss the diference between CPA and Revenue Share Affiliates, how affiliates can help out with the actual retention of players and how affiliates and operators work together to maximize the number of players coming in.

Dana: Let’s talk about CPA vs. Revenue Share Affiliates. How does the revenue scheme make a difference and how they focus their efforts?

Marc: I would say that how they focus their efforts determines their revenue scheme, not the other way around.  Affiliates who are in for the long term, they try and build up communities or sustainable businesses. Generally they’ll want to work on Rev Share and operators will reciprocate by giving them more tools, more access to data, and working like partners. But affiliates that are looking to do things quickly or don’t care if the other side makes money, generally want CPA more.

The one thing I will say is, there is a strong case for CPA for cash flow and not every affiliate that wants CPA doesn’t care about his business. But when I speak to affiliates and they aren’t willing to work on rev share, I get concerned.

Shahar: With CPA, it’s dead meat because you can be as aggressive as you want, you’ve already paid for them, so you can do whatever tricks and stuff that you can imagine or any creative promotions as long as you will make those players to play more and more and more. As long of course that the promotion is economical.  With Revenue Share, it’s a bit different because you need to calculate it efficiently, keeping in mind that you’re not only paying for your overhead cost and operation, you also pay a significant part to the affiliate as well on top of the cost of the promotion so it’s kind of something that has to be more moderate.

Dana: How can operators incent affiliates to focus on acquisition or retention?

Marc: Rev Share.

Both: Laughter.

Marc: I really think Rev Share is the answer to a lot of the problems in the industry today. When both sides have respect for the margins of the other, then you have the business that both people make money. In terms of acquisition, some sort of performance scale giving them more access to control of the players. You know there’s a lot of acquisition strategies but if everything split down the middle and you both have access to the data then you…

Dana: Again, hand in hand.

Marc: It really really is you know. That’s what I believe.

Shahar:  As surprising as it may sound, affiliates are human beings and you know, some of the operators they tend forget that but it all comes back to human contact and treating them as equal partners. Once you have that and you have established correct relationship with them, they will work with you in order to push the joint target together which is making more money.

Dana: How can affiliates help out with the actual retention of players?

Marc: Okay. So I think there are two ways clearly. The one is with kind of consulting or advice. Generally affiliates know their players better than their operators before they come in the door. So giving information about the types of players where they getting, that helps the operators retain them. The second is poker specifically and in some cases, sports where it’s largely community driven not just topless sending traffic from SEO then the affiliate’s community continue to engage the customer after their joined operator and I think they have direct partner retention.

Shahar:  When you work with affiliates, at some verticals such as poker or other tournament based activities, you can in fact as an operator create blocks of much broader event to be allocated to your affiliates meaning you can satellite to them part of the activity offering them an option to send players using a segment of the bigger promotion that the entire data base enjoy. So all of your players can witness part or participate at part of the promotion. New players or people that are not even players anymore before they even register, they can start for example free-roll and the winners will then be allocated into this broader event. So you need to work together with part of the promotion being totally owned by the affiliates.

Dana: How can operators and affiliates work together to maximize the number of players coming in and actually sticking around?

Marc: I think by focusing on core competencies on the affiliates side that means choosing a niche or a part of a market that they’re really really good at and can devote that detail to and on operators side, focusing on their retention and things they do best to get the most out of it and then obviously just coordinating campaigns between them.

Shahar: From the retention side of things, it’s quite simple. You work with your players; you try to provide them the best possible support. Communicate messages that are relevant for them by using segmented tactics and really really getting to know your database. That done together with a sufficient level of acquisition strategy will probably create synergy that will take the business forward.

Dana: So I hear that some companies have actually cut their budget and are still making money by re-activating players or encouraging players that are currently playing to play more instead of acquisition and actually spending money on that. What do you think of that kind of business model?

Marc: Excluding some exceptions in regulated markets, I think either they fly by night operations or they have no rights managing a business. If they were into activating customers to begin with and they weren’t trying to get the most out of customers to begin with, then, not really sure what they were doing. And if they think that just by working with a finite number of people that has a rate of attrition and gets smaller and smaller each month they can replace bringing new customers then, again, don’t think they should be running a business. But they can find me and I’m more than happy to take it from them.

Shahar: Well essentially everything in online marketing goes back to the funnel. In acquisition you’ve got the clicks, then visitors, registrations, and the depositors. In this case, if you decide to completely remove all acquisition effort, in fact, you minimize your reach. You can make more money off your existing players but why settle only for that? You’ve got the entire universe to target and you know by ensuring an excellent retention strategy, you will make more money of any lead coming into your system. But that again with your hydrant, just brings more people into the shop and then take good care of them so all works together. You cannot really do only retention. You’ll have very low level of people.

Dana: It’s only so much time at least.

Dana: Well affiliates were once regarded primarily as an acquisition tool, in today’s online gambling industry, it seems pretty clear that operators should utilize them for retention by working together  to maximize full potential. I’m Dana Workman and this is

Watch part 1 of the interview.