Leading sportsbook providers such as SB Tech are using data analysis to provide their clients with a detailed and practical assessment of their customer base and ultimately increase revenue. By Ben Blaschke
In a recent Webinar titled, “How a data-driven approach to sportsbooks can drive revenue”, Group Head of Content at EGR, Gerard Sarkey, explained, “With customers having greater access to sporting information via sources such as websites, tipsters and Twitter, punters have never had it so good in their battle against the bookie – all of which means that the importance of having a robust and sophisticated trading strategy can’t be under-estimated.
“With CPAs (cost per acquisition) on the rise and advertising restrictions on the horizon, the need for operators to stimulate their current customer base is essential and taking a data-driven approach to performing personalized marketing activities tailored to them will increase engagement and ultimately drive revenues.”
The use of data to build a more accurate model of a sportsbook’s customer base and how they spend their money is becoming increasingly prominent, particularly in the online world where procuring detailed information is a relatively simple task.
But how is that information mined to provide genuine benefit?
As Head of Platform at leading sportsbook provider SB Tech, Ian Bradley, explains, “It is really about the customer journey. A targeted customer acquisition and campaign approach can really drive and let you understand your customers, but also lets you work on how your promotions generate the best mix of customers for you and your ROI.
“Second is customer profiling and the techniques used to analyze the customer base and then start to segment them to help drive your sports trading and risk management approach via personalization, segmentation, bonusing and retention.
“Finally, once you understand who the customer is and what they do, you need to optimize your trade and risk strategy based on the information you’ve got – sports performance and analysis – to maximize turnover and revenue.”
SB Tech provides a full back-end service for more than 50 sportsbook operators around the world and boasts around 750 employees including sports analysts and traders. But a key part of the company’s service to its clients is comprehensive data analysis to provide a better understanding of the customer base for any given sportsbook.
It’s an ongoing process that evolves with each bet a customer places.
“We spend a lot of time analyzing our customers and what they do when they first visit our operators,” Bradley explains. “That information is, of course, then sent to our operators for them to use and perhaps tailor their campaigns from that.
The NBA ranks among the top 10 most popular leagues to bet on in most jurisdictions
“We look first at which leagues and events attract the most customers and obviously soccer, tennis and basketball are key for pretty much every region, but what we do see is a strong regional difference. In the UK horse racing is popular and we’ve got golf and cricket. MMA is an interesting one probably driven by Conor McGregor and then you’ve got rugby union and American Football – with all the international series and games being played in London, they have become more and more important. So if you are in the UK you should be focusing many of your campaign strategies and your promotions on these regional sports.
“If you look at Romania, handball is very popular along with ice hockey, horse racing, volleyball and snooker which was surprising for me when we started looking into it.
“Belgium has ice hockey, cycling, volleyball, e-sports. What we see is that even though the top sports are very important and do attract the most customers, it’s good to have a nice mix across the other sports. This means that when it comes to promotions you don’t just focus on the big Champions League games being played, you should also focus some of them on the core sports being followed in your particular region.”
Notably, this sort of analysis has shown that customers who are lured to an operator by a promotion focussed on a regional sport are up to five times more valuable in their lifetime than those attracted by one of the more widely popular sports, such as the English Premier League. Providing price boost promotions on these regional sports that provide better value than competitor sites are offering is therefore an invaluable tool in driving new business.
Yet analyzing new customers is just the beginning.
“We try to evaluate customers before and after every bet,” adds Bradley, noting the importance of segmentation.
“One practice we use to do that is VIP Metrics. We’re lucky that we operate within a high-volume industry. A lot of customers place a lot of bets so we therefore have a lot of patterns we can analyze.
“In order to do so we look at hard metrics, which is bets, but also soft or ‘personal’ metrics such as gender, where they live, deposit methods and things like that. What we see is consistent high scores across the different metrics that we have and we then use that to build a bit of a profile.
“With VIPs, we can build up this metric and work out what sort of value this customer has based on where they sit in our scale. The same with sharp customers (professional or astute customers), for example, who are most likely to bet on the web rather than mobile. Then we have different triggers that might trigger other things for investigation in some of our reports.”
There are multiple benefits to this sort of data analysis. At a base level, understanding who the customer is and the bets they like to place allows operators to offer a personalized service whereby the customer’s screen shows options to bet on teams or leagues they’ve bet on before.
“It can also get into bet recommendations, which is predictive analytics,” Bradley says. “And of course there are options we can show based on favorites nominated, for example, when the customer registered. This is all about customizing the view of what the customer sees because it is a very competitive market space, so we want the view to be what the customer wants to see.
Something to watch: an example of a customer consistently placing bets at better value than closing odds
“We can, for example, have automated pop up messages, very simple, with messages like ‘Manchester City did the job for you last time, can they do it again?’
“Our smart decisions looking at bets individually based on customer KPIs led to a 2% increase in margin on singles alone across 2016. That was pretty much across the board, that increase, across all of our operators.”
The other great benefit of this analysis is the ability to recognize betting patterns, such as when a number of accounts all place suspiciously similar bets. Known as Clash Value, it measures the frequency of related behaviour – most commonly found among sharp customers – “so if you are constantly hitting the same sort of bets or metrics as a sharp customer then the tendency is that maybe it’s a shadow account,” Bradley observes. “But you can use that to optimize your pricing and you’re going to be paying less for that information.”
SB Tech’s data analysis isn’t only for the use of its operators. In fact, perhaps its greatest value comes in how such data is used on the trading floor to adjust pricing.
“Our sports analysis team is constantly self-assessing and refining its algorithms and reporting to try and maximize the output and optimize the margin of gains,” Bradley says. “That analysis might come in the form of automated reports, as part of our analysis program or from our sports analysts themselves who have regular calls with traders.
“For example, one of the things we look at is called the Beat the Odds factor whereby we track all bets placed against the closing odds for those bets and what this does is provide clear visibility of expected profitability based on consistent value.
“In other words, some customers will always manage to place bets where they beat the odds by finding better value than the closing odds. We can then use that as part of our profiling in segmenting that customer. We can also use it in terms of price moves and reacting to prices a bit differently.”
From an operator’s viewpoint, this also provides the opportunity to set customer limits based on their segmentation. When a customer then tries to place a bet that exceeds the single bet limit the operator has set, that bet is individually assessed for value and a determination made as to whether the bet should be allowed to go ahead.
“Each bet is assessed on its merits and value at the point the bet is made,” Bradley explains. “By doing that, we really see a big benefit to that assessment in the bottom line.”
It’s a complex process, thus the term “Complex Event Processing” used by providers such as SB Tech to describe the services they offer. This means that, with every click of the mouse by a customer, their actions are being recorded, viewed an analyzed to provide a more customized service in the future.
“For a new customer, our segmentation might start simply with them being a customer from London, but then as we learn more about them we can accurately segment them and start promoting directly to them and for them,” Bradley says. “Where we want to get to is to give betting prompts during games based on certain situations. For example, a lot of people like to bet on things like Arsenal winning after falling behind.
“Long term we’re still looking at analysis on how far we want to take personalization and do we want to start building custom navigation views? It becomes complex from a technology point of view as well.
“Customer user journeys – I think we will eventually get somewhere near there but whether we start doing full custom web user journeys for every type of segment, I don’t know. I don’t think anyone in the industry is going there at this point. It’s still quite a new thing when it comes to sports betting.”