In the grand universe of gambling industry, where a long litany of factors come together to compose the success or downfall of a betting business, operators and software providers need specific, clearly-defined and reliable indicators of where the business goes, how goal-oriented are the steps taken, to what extent are in harmony the purposes and means of the enterprise.
Today at the heart of successful business in general, and gambling business in particular, lie KPIs (Key Performance Indicators) based on data collection, storage, processing and analysis. Most KPIs are classified as strategic, operational, functional, or financial. Each of these has its own features, time frames, purposes.
In the betting business, executives at different levels rely on the KPIs to provide time-relevant betting platform, secure loyalty of wagers, prevent churn of users, boost revenue, provide return on investment. To serve the ultimate goal KPIs should be well-structured, organized and processed. However attractive and lucrative betting business may seem, whichever business mode you choose – starting from the scratch or integrating sportsbook or casino software, detailed player data and their behavioral traits are must-know.
On the broad scale iGaming industry KPIs are divided into:
- Money related/Financial KPIs
- People related/ Behavioral PKIs
- Hybrid KPIs
- Money related KPIs are a tool to measure and present the transparent report on the financial performance, balance, profits of the betting webpage. Under this category fall the following criteria:
- Gross Gaming Revenue (GGR), which shows the total revenue of the betting business. You get it by deducting the sum of winnings form the sum of wagers. This is a backbone of the online casino and sportsbook financial performance. It should be mentioned that GGR is not a fixed number and may change from period to period. It can be expressed as a formula:GGR = Total Bets – Total Wins
- Net Gaming Revenue (NGR), is a more complex and realistic metrics which shows the real earnings of the betting business. Namely it is derived from the total bets minus wins, bonuses, commissions paid to payment systems, license fees, royalties, taxes and all the other expenses. In other words, it is the net, exact profit of the business.
- NGR-to-Deposits, metrics to show how much revenue comes from the deposits made. Definitely, the higher the figure, the better.
- Bets-to-Deposits, demonstrates the circulation of deposited money in the games. If the number is too high it is an indicator of giving out too much money in bonuses on the casino’s side.
- People Related KPIs are criteria employed to unveil the behavioral specifics of players, hence these are crucial for the ongoing improvement of the betting webpage in terms of securing loyalty and providing high numbers of wagers and involvement of users.
- Conversion Rate, measures and demonstrates the number of wagers who acted in accordance with the casino’s targets. This is the number of users (visitors/viewers, registered/visitors, and depositors/registered) who performed the desired action on the webpage, which includes clicking on the ads, opened emails, made deposits and so on. Thus, this indicator shows to what extent the promotional actions and advertising on the webpage are effective.
- Player Lifetime Value (LTV), an indicator of a single player’s loyalty to the webpage, the period spent on the webpage and the total revenue brought within that period. This is the building block of a successful betting platform, and should be constantly monitored and improved upon. To increase the LTV on the platform, you must first of all grow the retention and decline the churn rate on the betting webpage.
- Retention and Churn Rate measures the ratio between players, who continue betting, and those who left the platform. These calculations are usually made every 3, 6 or 12 months to give a picture of loyalty level of players. In case the numbers are high additional measures, like platform improvement, bonuses, new functionality should be employed to prevent the churn rate and provide higher retention rates of bettors.
- Hybrid KPIs connect the financial and people related categories.
- Average Revenue per User (ARPU) is sued to calculate the average income from the players registered and betting on the platform.
- Cost per Acquisition shows the overall expenses of the casino aimed at acquiring new players to register, sign-up and start depositing on the platform. Again this indicator demonstrates the efficacy level of marketing strategy of the platform.
All the above said, special attention is to be paid to the systems which perform the measurements and analytics described. One of the most effective modern systems for securing the seamless flow of operations based on a robust understanding of customers engagement and demands is the CRM system. Most of the platforms resort to this system for measuring the KPIs and further enhancing the betting platform performance.