GI Friday column: A very brief history of casino bonusing

Just a bit more than a decade ago, the modus operandi for most operators was to offer first deposit cash bonuses followed by recurring reload bonuses. The first to attract new players, the latter to keep them happy and loyal. And should players lapse, an attractive one-off bonus to invite them back.

The name of the game was to give the most irresistible bonus offers to stand out from the crowd of similar offers, which typically translated into larger and larger percentages and amounts. While some operators applied some basic segmentation to their player database, others simply offered the same reloads across the board.

Many learned the hard way that this was not a cost-effective way to reward players, no matter how much traffic it drove back or however big the deposit spike got after yet another weekly reload cycle started.

For one, bonus strategies focused on awarding money alone sounded like a dinner bell to the bonus hunters lurking in the shadows. Operators also learned that a crude and somewhat aimless cash bonusing scheme was not the optimal way to reward their valued players.

Today, the principles are, of course, the same. Acquisition. Retention. Reactivation. But the strategies and tools have evolved immensely over the last 10-15 years and one of the biggest game-changers is how we capitalize on our data.

The technology to recognize customer behavioral patterns and dynamically segment players has been around for years, allowing operators to put in place much more targeted strategies. There are different types of players and at different stages in the life cycle, which calls for different types of measures.

Predictive segmentation even helps in identifying future behavior: which players are likely to churn, who are potential VIPs, or prospective bonus abusers. Operators with this insight can make educated decisions and take appropriate and proactive actions before opportunities are lost or threats materialize.

Another example of today’s data-driven iGaming landscape is event-driven, real-time bonusing. Performing the right action at the right moment is a must-have to cater to the new generation of consumers, who are used to the instant gratification that the online and tech industries brought to them. Gamblers are no different. If promised five free spins by playing 50 rounds on video slots, the player expects that reward to be granted instantly when the objective is accomplished. ‘Play today and get rewarded tomorrow’ is obsolete. Patience is a thing of the past.

The possibility to offer event-driven, real-time rewards has opened doors for gamification. There is an ever-growing amount of industries that embrace gamification with excellent results. Gamification is literally everywhere. Via smartphone apps, people are motived to work harder and smarter, reach their savings goals with their bank, do math homework, and exercise – all driven by gamification. And while your audiobook app only lets you level up and unlock some badges (still strangely gratifying!), gamification in the iGaming industry is full of very much tangible rewards.

Getting a reward is great, but for a true player, getting a reward in a competition against other players adds to the thrill. Climbing the leaderboard of a tournament enriches the user experience beyond playing the actual casino games.

The same is true for challenges presented to the player that may unlock a reward, or a new challenge, or both. Players can set out on a journey where they decide which path to take, choosing between different missions with different objectives and rewards —all while levelling up to get access to new perks and challenges.

Gamification done right increases player engagement and loyalty, which in turn improves retention rates, and eventually results in the ultimate goal of all operators – increased lifetime value. The industry has truly come far in how we engage with and enhance the user experience of the players. But as tech-driven industries go, the best part might be that in 15 years we’ll look back at what we did in 2020 and shake our heads at the lack of sophistication.

The original version of this column has been published by Gambling Insider on October 23, 2020, under the title A very brief history of casino bonusing in their weekly GI Friday.