I wrote about different customers in my previous blog. I’ll now continue with the same theme and will concentrate on Sports and Horse Betting.
I divide Sports and Horse Betting customers to four groups: “sport fans”, “habit players”, “wannabe experts” and “heavy punters”. The motivations of those different types of customers vary very much and Sports Betting companies should understand that, or they won’t manage well.
“Sport fans” are really interested in different kind of sports. The size of that group is big – in Finland about 50 % of adults are watching when our team is playing in World Championship final in ice hockey. Those “sport fans” are probably playing some money games but they are not so familiar with Sports Betting products. “Habit players” is smaller group but from Sports Betting customers it’s the biggest group. They are gambling every week and know Sports Betting products well but are not using lots of money. “Wannabe experts” is active group who could say that Sports or Horse Betting is their main hobby. They are trying to win money from gambling but won’t manage to do that in long term. “Heavy punters” is real small group of experts who are in practice professional gamblers and Sports or Horse Betting is their job. There are all the time movement from lower group to upper group and sometimes also to another direction.
Let’s assume that there are only three main business goals for betting company. The most common goal is to get profit. The other one is to achieve sale and market share. The third quite common goal is to increase the number of customers. If you are not running giant size company with lots of resources, you can’t do everything and can’t concentrate on all customer groups seriously. Normally we are in the situation where we must select which business goal will be our primary one. Of course that goal could be different in short term and long term – big market share will help you to earn more money in long term etc…
If I should try to get as much profit as possible in next quarter I would target my offering and marketing to “wannabe experts” and partly to “habit players”. Those groups are losing more money than the other two groups. Of course that would be irresponsible way to act but don’t care about that here. If my goal would be to achieve more sale I would concentrate on “heavy punters” and also “wannabe experts”. Heavy gambler could use about 1000 times more money to gambling than an average normal customer. So, it’s the easiest way to increase your sale with them. You should understand that if you are concentrated on that professional group you will potentially face serious problem with your profit because those customers will win in long term. If my goal is to increase the number of customers, I’ll have just option left and it’s “sports fans”.
I think that all sports betting companies are willing to get “wannabe experts”, “habit players” and “sport fans” but not “heavy punters”. Why that is the case? Sports Betting companies seem to be afraid of those professional customers and call them “sharks”. I’m not sure that is the wisest way do business although in short term it might look like that.
When you are willing to make a bet, you should find out another person who is also willing to do that and who is ready to accept odds you are offering. So, we always need two parties to make a bet and both should agree with the conditions of that bet. The interesting question is why I should accept bet from one customer with fixed odds but don’t accept bets from another customer with same odds or even don’t accept any bets from that customer? That’s how most of sports betting companies are doing nowadays. They make their decision based on data of those different customers – bets are ok from customers who are losing in long term and not ok from winning customer = SHARKS. According to rules there is nothing wrong with that but why those companies are so afraid of sharks? The responsible gaming reason is not at all valid when we are talking about those professional punters. They are spending huge amount of money but that won’t cause problem gambling when they are winning in long term. The real reason is of that companies are willing to make money / profit and they won’t do that with those customers or will they?
I agree that those sharks are dangerous “animals”, but would it be possible to act towards them in different way and even utilize them in your business? Yes, I think so! I have three ideas about that. The first one is to make your odds better. When your odds compliers know that there are talent customers against them they will do their work even better than would do against normal customers. When you have better analyzes your fixed odds sports betting will be better business. The other benefit would be better reputation. At least here in Finland those “sharks” are quite famous among “wannabe experts” and when your company accepts bets from them they will speak on behalf of your company and “wannabe experts” would value your company much more. The third thing is the profit which will come from another products. If you are offering pari mutuel sports or horse betting products you will get bets to those games too from “sharks” and that will utilize you in two different ways. You will get higher turnover to your game which will be even more attractive game after that. There is no business risk from company point of view in pari mutuel games, so you will get also profit from those “sharks”. Finally they might be even profitable customers as such or at least via the other customers.
It depends on your business goals how much you should be afraid of sharks. Sometimes they are not dangerous animals at all!