Joe Pappano of Sightline Payments outlines why the payment journey is increasingly important in a betting firm’s customer retention strategy in the midst of a busy US sports schedule.
As the start of the 2022-23 NFL season continues to grip sports fans and bettors alike, sportsbook operators are reducing their spending on promotions and advertising for the coming season. Customer acquisition is now customer retention. That is even more of a focus for high-value customers.
Gaming customers always want faster cash outs when they win. Betting Hero recently reported that 96% of daily sports bettors would be more inclined to use one book over another if they had more options for faster and easier withdrawals. For high-value customers, there are several things we know about them leveraging payments data.
First, they often struggle depositing the amounts they desire. This is largely a result of card network rules that limit deposit volumes based on gaming transactions being labeled as high-risk transactions.
Second, high-value customers have more open accounts at sportsbooks than average players. For a normal patron, we see an average of two total open accounts per player, which doubles to 4.2 total accounts per player for high-value customers. According to operators, those customers tend to be more price sensitive and shop around different books frequently. They also want a greater variety of payment options – both on deposit and withdrawal.
Every sportsbook has a wide variety of deposit options, with most enjoying greater than a 90% acceptance rate. The most common cash-out method remains ACH, with withdrawals often taking days to process. An optimal customer experience should give winners access to their funds in minutes, not days.
Gaming companies are constantly innovating, and payments solutions are no exception. Sportsbooks are exploring the use of real-time payments and original credit transaction solutions for faster customer cash outs. Operators are taking familiar digital payment solutions from non-gaming ecosystems to provide customers with more ways to get quick access to their funds.
In-play wagering and same-game parlays provide customers with a more versatile experience with more opportunities to win. But what happens when in-play wagering meets real-time cash outs?
Let’s say a customer wins an in-play wager during the first quarter of the Sunday afternoon game and wants to withdraw that money immediately. Then, that same customer wants to bet the halftime lines of another game, so they then redeposit the funds they withdrew earlier.
Operators pay to acquire funds again and again as customers withdraw and redeposit over the course of the weekend. This forces operators to choose between providing maximum in-game wagering with multiple cash-out options and paying for each cashier transaction.
It’s not surprising that this tension has resulted in marketing campaigns designed to keep customer funds in a wagering account. And that’s even more of a concern when dealing with your top players – you want to give them the best of both worlds. From what we see, high-value customers replay 85% of funds that are transferred back to their Sightline Play+ account, a rate almost 50% higher than standard players.
Sportsbooks are solving this tension through the introduction of payment options that allow for a player’s immediate access to their winnings without the waiting period. Operators are also educating themselves on fund acquisition costs and including in their payments’ stack options like Play+, which allow for reacquiring funds at a lower cost than traditional payments methods.
This churn of money can end up costing operators millions of dollars to reacquire the same funds again and again and again. While we know that operators conduct extensive analysis for their cost of acquisition, researching their cost of reacquisition is critical as the shift to in-play wagering and real-time withdrawals takes place.
From the analysis that Sightline has conducted for operators, we find there is an opportunity to save 1.75% on this reacquisition cost. When you extrapolate that over the $20 billion in annual deposit volume for operators, that’s a potential savings of $350 million. This analysis presents a huge savings opportunity that many operators can take advantage of for no additional cost.
As U.S. sportsbooks shift their focus to retention, tracking player behavior and loyalty programs becomes even more important. Operators are partnering with gaming payments companies to tie wagering, cash outs, and overall spend together, seeing the whole picture of a loyal customer’s activities and tailoring their communication with that customer to meet that individual’s specific needs.
This ultimately leads to increased loyalty and retention of those players. We see that high-value customers transfer their funds to Apple Cash and Venmo most frequently after withdrawing – indicating that these players are sending money to peers, using the funds for bill payments, and using those alternative payment methods to cash out.
Leveraging modern payments solutions enables operators to provide a better player experience and customized communication for every loyal customer.