In the ever-evolving landscape of sports betting, implementing personalized odds emerges as a strategic game-changer. Like pioneers, we have transformed odds personalization from a risk management tool into a comprehensive strategy to boost GGR.
Our client has achieved up to 34% additional increase in profits through tailored adjustments without extra marketing costs and feature development. Let’s figure out how we’ve unleashed a new dimension of revenue generation, helping operators navigate the delicate balance between more profit and player satisfaction.
Understanding the Nature of Odds Personalization
Of course, every operator would like to maximize margins and increase profits, but the sports betting business doesn't work that way. Much like the retail business model, operators in the iGaming industry strive to optimize their returns by setting higher odds. Still, the competition is fierce, and similar products are lined up nearby. As shoppers consider price tags in a supermarket, potential users assess odds as value indicators before making choices.
Players have diverse motivations for placing bets, varying based on income levels, sporting preferences, national characteristics, and more. For instance, VIP players from Central Asia in the decision-making process pay more attention to odds differences, while VIP clients in South Asia focus on their status and service quality privileges.
Oleksandr Tsvigun, Head of Feeds Trading
Setting margins and odds is the art of finding balance, which requires understanding the market dynamics, competitors' offerings, player behavior patterns, and the team's technical expertise to implement this knowledge in the product.
The key to striking the right balance begins with proper player segmentation. Typically, operators segment players within the context of risk management to prevent losses due to low-tier tournaments, bonus abuse, or fraud. However, segmenting players is not only about risk prevention but also about optimizing profit.
💡 For instance, specific player segments may not care about a 1-2% odds difference but value recognizable branding that supports their favorite team, relevant content, a user-friendly interface, convenient wallet top-ups, and assured fund withdrawals.
The art of odds personalization lies in accurately identifying these segments. Correct segmentation, followed by tailored adjustments, enables attracting new users with favorable odds, retaining professionals who compare ten operators before every bet, and earning more from players for whom the operator's value hinges on odds variations. Nonetheless, achieving odds personalization demands platform functionality and a team with the necessary expertise. This intricate process involves numerous nuances that betting software providers often overlook or need to gain the expertise to develop.
In the GR8 Sportsbook and GR8 Managed Trading Services (GR8 MTS), odds personalization is not merely a risk management element; it's a comprehensive tool that empowers our clients to gain up to 40% additional profits with initial investment. The profitability stemming from this tool surpasses the cost savings associated with opting for a more straightforward platform solution.
Next-Level Odds Personalization Capabilities
Distinguishing ourselves from other iGaming software providers, we took odds personalization to the next level. We personalize margin, limits, and delay for each player segment. Furthermore, we flexibly customize any sport, event, market, or tournament for the customer base and specific segments of any region where the operator's brand is present.
GR8 Sportsbook offers customization of margins, limits, and delays within three dimensions.
Odds personalization finds its application in two key scenarios:
1) Margin reduction, leading to higher odds and attracting players—ideal for promotional efforts targeting new or existing players seeking enhanced value.
💡 Consider Brazilian VIP players who stopped engaging in volleyball bets. By identifying and segmenting this group, we can present them with exclusive offers featuring improved odds. This strategy effectively boosts customer loyalty, stimulates participation, and rekindles their interest in betting.
2) Margin increment appeals to customer types less concerned about slight odds changes. Typically, these players bet to support their favorite teams or amplify their excitement while watching matches.
Such adjustments in odds remain inconspicuous to these players yet contribute significantly to the operator's revenue without compromising the customer base or necessitating additional investments. User segmentation is possible both on the operator's side and within the GR8 Risk Management module. This approach ensures data security as only user IDs are utilized for margin personalization, safeguarding sensitive customer data.
Proven Results: 34% in Profits in Q3 of 2022
In Q3 of 2022, we successfully executed a personalized odds strategy for a client operating in the Indian market. This strategic move led to a remarkable 34% surge in profits from the specific user segment for which we applied personalized odds. So, let's dive deeper into the details.
What was a business objective?
The primary business objective was to develop a solution enabling our client to increase profit without additional investments on digital channels or the churn of active users. We also aimed to assess the impact of odds and margin differentials on user behavior.
Ruslan Priymak, Product Owner
What metrics we analyzed
We pinpointed a segment of active users who had placed at least one bet within the two months preceding the testing phase. This user segment was then divided into three cohorts for comparative analysis, with personalized odds introduced solely to one of these cohorts.
Dividing the active user segment into cohorts for comparative analysis
Our analysis encompassed critical metrics such as Turnover, Margin, Retention Rate, and Gross Gaming Revenue (GGR). We closely examined the disparity in GGR and Margin between users with personalized odds and those without.
Have you had any tests before?
Previously, we piloted the concept of personalized odds among our clients operating in Europe in a more straightforward form for a precisely targeted user segment. However, this recent implementation marked the first time we executed this strategy on such a significant scale.
Preliminary tests in the Indian market were conducted before Q3, focusing on small groups of seasoned players and avid odds enthusiasts who usually operated within a slim margin range of less than 2%. The results of personalized experiences showed that even for these players, a reduction in odds was not critical and did not lead to massive churn.
The final result
Our comprehensive analysis validated the effectiveness of our strategy as the client reaped a remarkable 34% profit increase from the personalized odds segment, contributing to 8% of the overall GGR during Q3 2022.
Furthermore, our hypothesis was substantiated that odds and margin variations had minimal impact on players who engaged in betting for the sheer enjoyment of the game. Notably, no churn was observed among this subset of active players.
Currently, we are scaling the same strategy to cater to diverse player segments. The max profit formula is also being extended to encompass a wider spectrum of sports and cater to clients operating in different geographical regions.
To Sum Up
Pursuing excellence in the iGaming industry, the journey into personalized odds has proven groundbreaking. This strategy, which was implemented to maximize our client's profit in the Indian market, where odds personalization was introduced significantly, demonstrates the tangible impact.
Moreover, the hypothesis that odds and margin differentials have a minimal effect on players who bet for enjoyment has been confirmed, with no churn observed among this vibrant segment. As we continue to scale this strategy to cater to diverse player segments and extend its application to different sports and regions, personalized odds are emerging as a driving force to optimize profit in iGaming.
