Noam Kanfi's Blog

iGaming Services and Marketing Specialist

Customer Retention Metrics

Customer retention is one of the most vital aspects of any business. When it comes to online businesses, customer retention methods are even more important as there is little to no face-to-face time between the business and its customers.
Therefore, it is important that business practices prioritize customer retention above almost everything else. Here we will take a quick look at the importance of customer retention and how it applies to online casinos, as well as offer some key metrics and methods for measuring customer retention using said metrics.

The Importance of Customer Retention

Business students and business gurus have argued about the merits of acquiring new customers versus retaining existing ones to death. However, there doesn’t need to be any discussion because the numbers speak for themselves. It costs vastly more to bring in a new customer than to retain an existing one. Existing customers require little to no marketing outreach and are already provably more likely to use/purchase your product. Online casino churn rate, what portion of users leave the platform, is at the forefront of how successful an online casino will be. Online gambling is a volume game, retaining your existing customers is the best way to ensure a steady increase of revenue over time.
Key Customer Retention Metrics to Look At
There are some key metrics to consider with any online business; however, the following four are the most applicable and important to online casinos. It is of the utmost importance that key metrics are not only considered and tracked but that the data is used to influence business decisions and the future goals of the organization.

Customer Churn Rate
Customer churn rate is the rate at which customers leave the platform. This is most often measured within two parameters. First, how many customers join the platform and then leave? Second, how long does the average repeat customer spend on the platform? The longer the latter churn rate the better.
Churn rate = customers lost / existing customers (e.g. 1000/25000 = 4% churn rate)


Customer Retention Rate

The customer retention rate is almost the exact opposite of the churn rate. What percentage of customers return to the platform after they use it for the first time? Do customers stay after they have used their free spin on the roulette wheel or free credit playing online slots? If the customer retention rate is low, for example, is it worth offering those free promotions? Probably not.
Retention Rate = (customers at month end – new customers this month) / customers at beginning of the month (eg. 25000 – 1000 / 25000 = 96% retention rate)

Repeat Purchase Rate

How often is a customer likely to use your service again? What percentage of your casino users load up their account with credit once and then never do so again, preferring to only use free spins and capitalize on promotions? An average repeat purchase rate in most industries is about 28%. Given the nature of online gambling, a good repeat purchase rate for an online casino is 60-70%.
Repeat purchase rate = number of returning customers/number of total customers


Loyal Customer Rate

The loyal customer rate is very similar to the repeat purchase rate but goes one step further. It is important to quantify customers by how often they return not just whether or not they have. For example, if you have a 70% repeat customer rate what percentage of those repeat customers return once more, 5 times, or a hundred? Finding a way to quantify customers based on how often they come back not just how much they spend is vital for identifying your loyal customer base.
Customer loyalty value = customer x purchases per year (excluding first purchase)
Customer loyalty rate = average customer loyalty value x total customers


Summary

Hopefully, this brief article has given you some good ideas for measuring customer retention and clarified just how important retention is when running an online casino. Being able to increase customer retention rates by 5% can potentially increase profits by as much as 25% over a prolonged period. Improving business practices of retention is a far more cost-effective method of revenue increase than an increased marketing budget in the hopes of acquiring a new customer base.

Noam Kanfi

iGaming Services and Marketing Specialist

Noam Kanfi has more than two decades of experience in iGaming, working with some of the biggest names in the industry.

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A Move to Playtech

The next stop in Kanfi’s career was with one of the true industry giants, Playtech. He was CEO of B2C for just over five years between 2016 and 2021.
He had several responsibilities managing all areas of B2C relations in a newly setup company. This included managing several subsidiaries around the globe, including in Mexico, Spain, and the UK. Furthermore, Kanfi was in charge of technology and support teams in Bulgaria and Ukraine.
In this senior role, Kanfi had many other obligations, such as taking responsibility for revenues in relation to business plans in all PT B2C JVs and other partnerships. He also had to balance CPA costs in countries such as the UK, Spain and Mexico. At the same time he was continually working to innovate and find ways to scale the business in as cost-efficient a way as possible.

A Winning Career

Kanfi’s next major role was as Manging Director of Operations for Winner.com, which for many years was one of the leading gambling operators in the UK market and elsewhere. His extensive responsibilities included all product, CRM, CX, compliance and operations aspect of the casino and sportsbook business. He also oversaw the launch of new brands in regulated markets while working to implement new technologies in order to improve retentions, reduce costs, and so on. He also reviewed all on-site customer processes, leading to an increase in signups, deposits, and retention.
Before long, Kanfi became Winner.com’s COO. In his role, he delivered revenue growth in key joint venture operations including for brands such as Marca Apuestas, Caliente, and Maxbet.

Work with William Hill

Kanfi then went on to work with William Hill for several years. He was managing director of two subsidiaries, based in the Philippines and Bulgaria, where he had full responsibility for customer service, risk, VIP retention, CRM, and more. During this time, he established and managed call centres with more than 350 employees spread around three locations and spearheaded numerous advancements, such as the move to live chat customer support, and the automation of risk and payment processes.