How to work out the best Average customer retention formula for your igaming business
Customers are oxygen for your business. Finding ways of getting new ones is key to survival, keeping the ones you have is important for scaling and growth.
Retention is the one key factor that matters most to your bottom line. Get this right and you’ll have little else to worry about. If you don’t measure your retention rates, you’re going to find it hard to improve on your retention performance. So step one is to make sure you have the right tools in place to measure the data you need to crunch to find your retention rate.
If you’re not sure what data you need to measure, you can look at how to calculate average customer retention rate formula below and work backwards to find the data you need to measure:
Average customer retention rate formula for iGaming and eCommerce
Step 1: You want to measure retention rate based on specific entry points so the best place to start is by picking a bonus or an offer which you run periodically on your website.
The idea is that you have retention rate statistics for each entry point so you can use this data to come up with new offers and invest in those elements that turn into a higher retention rate.
So draw up a list of the offers and bonuses you will be offering in the next 6 months.
Step 2: Break down into cohorts. Look at your website users and audience (keeping in mind where you’re acquiring clients from – for example your PPC regions). Separate your users into cohorts or ‘buckets’ for example
Cohort 1 = Bonus A -> LatAm -> Casino Games
Cohort 2 = Bonus A -> Europe -> Casino Games
Cohort 2 = Bonus B -> Europe -> Slots
Be careful not to create more cohorts than you can manage. Keep it relevant. Measure only cohorts you can action. If the data cannot be actioned, go more generic and build larger cohorts. You can go into more detail later, after you’re confident you can manage the data and action it effectively.
Step 3: Decide the period you’re going to measure. The answer to these questions will help guide you.
a) After how long do you expect a user to make the second purchase after the first deposit?
b) After how many days do you consider your customers churned?
Your chosen period should be a number of days between your answer to question a and b. If their deposit is usually spent within 30 days but you stop sending re-activation emails and notifications after 90 days. You may want to pick 80 or 90 days as your period.
Step 4: Here’s a simple formula to start with
Number of users that deposited on Day 0 (day zero being the day they run out of the Bonus you earmarked or if it’s hard to measure that way you can pick the day the bonus was released and make that your day 0 and extend the period as you see fit from your data )
Then divide by the number of users that made their second deposit before the end date you picked
So it would look something like this:
Number of users that deposited / Number of users that made 2nd deposit = Your retention rate
For each cohort work out the formula above.
Step 5: Once you’ve worked out the numbers above you should know how many became regular website users and how many stopped playing after the 90 day period.
Often marketing stops reaching out to these customers after they’re labeled as ‘churned’, however these users also present an opportunity.
There is a lot of money in your list. Especially those people who may have played a bit, spent some money and then stopped. They were creating a relationship with you and then something got in the way.
By reaching out to these customers/users you can bring them back to your website. You show them you care, offer them a personalised incentive (like a bonus on their favourite game) and you’ve forged a stronger relationship.
We offer a revenue sharing service that does just that. We call your customers and bring them back into the game.
At Enteractive, our revenue share (Re)Activation services brings churned players back to your site. If you want to know more contact Andrew Foster for a quick consultation.