The Power of Referral Marketing in Gaming

If you didn't see our article in eGamingreview's Digital Marketing, where our CEO Gideon Lask explains why referral marketing is a perfect fit for egaming companies seeking alternative acquisition channels, here it is:

The Power of Referral Marketing

Some industries are all about brand aura. Try buying a shoe-fetishist a pair of Caterpillar workboots for their birthday and persuading her that, hey - they both go on your feet, so they’re just as good as Monolos. Gaming isn’t one of those industries.

Some industries are all about habit and loyalty. Try getting a Mac user to switch over to a Windows PC, or - let’s be honest - anyone to start searching with Bing. Gaming isn’t one of those industries either. Gaming - especially eGaming - is all about acquisition. When you face a continually high churn of customers, and when it’s notoriously difficult to differentiate your offering from that of dozens of close competitors, acquisition is everything.

So, what’s in the standard playbook when it comes to acquisition? Display, SEO, SEM, affiliate, maybe even a bit of social where the rules and regulations permit - basically, anything you can turn on that helps you reach the right people with the right messages. But who are the right kinds of people? Well, they need to tick three boxes:

a) They’re ready to spend money.
b) They’re ready to spend money on the products you offer.
c) They’re ready to spend money with you.

That sounds a lot like your existing customers, doesn’t it?

Tools of the Trade

And that underpins the key reason why referral marketing needs to be a crucial part of your acquisition toolkit, just like the channels listed above. Because each of your existing customers will almost invariably know several, dozens, even hundreds of other potential customers - all with identical needs, profiles and gaming behaviours. A Chelsea fan will know other Chelsea fans who’d be happy to jump on your special this weekend. A die-hard poker player will know other die-hard poker players.

And who are you going to listen to? Your best friend who’s sent you a personal message on WhatsApp, or Brand X who paid to insert an impersonal ad into your Google search results, hoping you’ll give it the time of day, rather than scrolling straight past it? No wonder messages from existing customers cut through up to eight times more powerfully than unsolicited marketing messages served up through PPC or SEM. No wonder referred customers are 30% less likely to bounce from your site, convert almost eight times as often and spend, on average, 185% more than traditionally acquired customers.

How do I know all this? Because getting existing customers to share with their friends, acquiring new customers for brands, is what I do every day here at Buyapowa, Europe’s leading referral marketing platform. Now, we work across all kinds of industries: fashion and beauty, via clients like Feelunique and L’Oreal, where brand aura is everything; grocery and GM, via clients like Tesco, Costco and Ocado, where loyalty is (perhaps surprisingly) stronger than anywhere else; telcos like EE and O2, where long-term contracts make acquisition especially challenging; and, of course, eGaming.

Our first client in the sector was Paddy Power, where we powered a season of revolutionary Enhanced Price promotions: the more people who placed a specific bet, the better the odds got for everyone participating. That kind of incentivised interactivity places the onus on customers to do the marketing for the brand by sharing with their friends. Unsurprisingly, the cut-through when someone you know and trust suggests you place a bet is way stronger than when a brand does the same (even an especially charismatic brand like Paddy). And, of course, in an industry where acquisition often costs upwards of £50 per customer, it’s a damn sight cheaper, too.

Learning from mistakes

More recently, we’ve been powering a more straightforward referral programme for Fun88 across Asia, which uses de rigueur welcome bonuses in a much cleverer and more engaging way. Instead of Fun88 directly marketing free bets to new acquisitions, existing customers are able to hand them out to their friends and family via a suite of trackable social sharing tools. Again, there’s that cut-through, the peer-to-peer conversation that rises above all the other marketing chatter from rival brands.

But there’s another layer to this, too - every time an existing customer gets a friend on-board, they themselves receive a reward, a thank-you from the brand for the successful referral. It’s a powerful incentive which drives huge amounts of sharing, and one we’ve seen become increasingly effective as Fun88 seed the promotion for this programme around hot-ticket sporting events.

So far, so good. But Fun88 aren’t doing anything wildly radical here. Betfair, William Hill, PartyPoker and many more eGaming brands all run referral programmes. But they all get it wrong (to a greater or lesser degree) - and they all omit one vital ingredient, which I’ll get to in a minute.

Mecca Bingo’s programme offers customers £20 every time their friend registers, deposits and spends £10. So far, so good. But there doesn’t appear to be any additional incentive for customers to hand out to their friends, turning sharing into little more than shilling. Worse still, users are required to submit their friends’ email addresses and let Mecca do the sharing for them - something the vast majority of customers will, understandably, be incredibly uncomfortable doing.

888Casino fix that first problem with a super-generous £/€/$100 bonus for referrers, plus an additional £/€/$50 welcome bonus for their friends. But there’s zero social proof to show users that other punters are successfully earning rewards and, more cripplingly, there’s no ability to customise their sharing messages. That means their friends are going to receive a cold communication from a brand they might not know. And, should those friends deign to click through, they’re going to hit a site which neither references them by name (“Welcome, Pete!”) nor acknowledges that it was their friend who sent them there. And that’s going to decimate conversion.

In fact, when we surveyed dozens of sites all attempting to run self-built referral programmes, we kept finding these same errors, omissions and fundamental misunderstandings about the psychology behind referrals. And that’s no surprise. You wouldn’t expect brands to programme their own CRM software, or to produce their own TV ads. It takes years of experience, innovation and iteration to get the formula right, which is why some things are always better outsourced.

Finding the right incentive

But one thing you would expect to see in any eGaming referral programme - be it self-built or outsourced - is gamification, some element where users compete among themselves to earn bigger and better rewards for referring more and more friends. Amazingly, though, each and every company we examined ran flat referral programmes, where users simply weren’t incentivised to introduce more than one friend, and where the primary USP of their industry - GAMING - wasn’t spun into the DNA of their programmes.

And that’s where Fun88’s programme is fundamentally better - as are the programmes run by all of our clients, across all those varied industries. We’re not happy getting customers to make one referral, not when they each have dozens of friends who’d all make great customers. So, we enable tiered rewards - additional prizes activated when users achieve three, five, ten or any other suitable level of introductions. And, because 80% of successful referrals come from just 20% of our clients’ customer-bases, we absolutely weave in gamification to supercharge the superstars, the powerful influencers who’ll go the extra mile to earn something special. So, whether that’s tickets to a glamorous sporting event or the latest hot gadget, we allow brands to offer a grand prize to whoever refers the most people within a given window of time. We turn referring your friends into a game. Then we turn that game into acquisitions.

And when games and acquisitions are the absolute lifeblood of your industry, that’s something you need start offering yourself.

If you are coming to the iGaming Supershow in Amsterdam, come and [hear us speak] (http://www.igamingsupershow.com/schedule/schedule-day-3)
9th June and if you'd like to learn more about referral marketing at the iGaming Supershow or any other time, we'd love to hear from you.

The above article first appeared in eGamingreview's Digital Marketing in May 2016, pages 32-33.

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