It is not the cash out functionality that matters but the time it takes you to respond to your player’s request for cash out.
Nearly half of the world’s adult population will never miss a chance to place a bet on the Grand National, FIFA World Cup, Wimbledon, Super Bowl and other sports betting events with high liquidity.
But why do people mark their calendars for these events long before and plan their months and days accordingly? Why do they rush to bookies and watch impatiently with bet slips in their hands?
The research by Cambridge University shows that a gambling win activates the reward-circuit in the brain, releasing dopamine and making a player feel good. More interestingly, another study shows thatalthough near-misses are more unpleasant than full-misses, they simultaneously increase the desire to play the game. So even when players lose money, it still feels good - the bet is a payment for entertainment!
Sports betting is more than a business. It is a lifestyle, a tradition, a research topic, an industry. Thus, sports betting operators, online and land-based, must be psychologists, punters, businessmen, adventure seekers and perform all these functions simultaneously. Seems like an ordeal? But if you want to start a betting business, you will have to ‘force your heart and nerve and sinew’ to complete that ordeal.
Starting an online sports betting business brings challenges but every challenge comes with strength and wisdom to conquer it.
Instead of spending your valuable time on devising schemes to beat a giant, focus on building relations with your players no matter how few they are. Will a middle-aged or elderly man value ‘fast-food’ relations if he can enjoy beer and talks with a local bookie?
Word of mouth can work miracles. While large companies are aggressively campaigning, you will attract players through being supportive and creating positive feelings. A player knows and trusts the operator or the bet shop owner he passes by every day and exchanges two or three words with.
Big numbers of visitors are not essential, it is the conversion rate that matters. Let them be few but loyal! Make sure you regularly check the conversion rate with Google Analytics. The journey of a user from a visitor to a player is your goal.
Example: In case you have 5,000 unique website visitors and make 50 sales in a month, your conversion rate is 1%.
Another important metric is Customer Lifetime Value. The simple formula is:
There are different tools and methods to measure the value of a player to your company, e.g. Harvard Business School’s Toolkit Lifetime Customer Value Calculator tool.
It is always good to know your players. However, focusing on relations does not automatically exclude the necessity to prepare a business plan for your sports betting business.
Studying the market and jurisdiction helps you keep things running smoothly. For example, if you target the Italian market, you will probably decide to launch your sports betting website in early summer. All major competitions in the country, Serie A and B, Primavera as well as UEFA Champions League, begin in late August. During these three months you will allow yourself time to test your operations and reveal the ups and downs. Most importantly, you have to remember that a punter will have studied the clubs and players by the last round and go on placing bets more wisely and informed. Thus, with a business plan you will be more prepared for the possible instabilities.
When writing a business plan, you should define what constitutes success or failure for the performance of your business. For all operators, profit margin should be one factor. Beyond that, it can be establishing and growing revenues, or the launch of new products or entry into new markets or new funding. Whatever your aim is, you should set clear targets and include these in your plan and measure how close you have come to hitting them.
You can consider the method of setting SMART targets to make your goals achievable.
When targets are defined, it is time to set priorities. There are several tools around that may help you, for example, the Eisenhower Matrix. This principle helps set priorities by dividing tasks and activities into four different categories. Depending on the importance and urgency, these tasks should be handled differently.
At a high-level, your business goals and strategy will define the Key Performance Indicators (KPIs) for your business. The industry and business model definitely impact the list of KPIs you need to keep track of.
KPIs are individually chosen to suit a sports betting business.
It is important to keep in mind that the KPI dashboard is a live tool that can be changed if need be. The processes and priorities change as the business grows. The main point is to always know what you want to measure and why.
You have money? Great! You have ideas but not money? It is not a big deal if you are creative and active in raising money for your sports betting site. Banks and institutional lenders may be willing to give you the money you need but you will have to pay interest and service charges. It is important to keep your startup cash as liquid as possible because you have to cover bets on the website daily whereas paying interest on the cash will restrict access to the cash.
You can consider peer to peer lending platforms where you can raise the money you need to start your online sportsbook business.
Another way to save money when launching an online sports betting site is white labelling. Why reinvent the wheel? Why spend large sums of money on technologies, workforce and licenses? Technology providers like BetConstruct offer white label sportsbooks that include all elements necessary to start your sports betting business quickly, from website creation to free risk management and support services. A turnkey sports betting website facilitates your entry into the market. Whether you want to start a casino or sports betting business, this option allows you to cut expenses and focus on promoting your company.
Be something - fish or meat, not all the menu! Diversification is desirable but remember that smaller companies focusing on a few technological goals are more likely to bring innovations in the market and respond creatively to market changes.
Instead of investing your resources and time into beating all sports betting websites in the world, you can choose a region and accordingly create your offerings for the target market. Targeting the Scandinavian market, for example, and thus localizing your offerings means that you optimize your investments. In this regard, calculating Return on Investment (ROI) is perhaps one of the best ways to analyse the success of your optimization. In general, every businessman wants to know what profit is made out of invested assets. Most information received in ‘a raw formʼ does not say much about the most important issues - is the business profitable, is it operating under big risk, etc. You can make a profit of 5,000 euros a year. It can be a lot if you invested nothing. However, it will be insufficient if you invested 200,000 euros. To see what return on your investment is, you may use the following simple formula:
Instead of investing in covering from football to curling, why not focus on one category? For example, the once-niche market of eSports gradually becomes mainstream, with a growing number of potential customers.
Let’s look at the statistics: this year’s prize pool for DOTA 2 is over 20 million US dollars; the latest League of Legends tournament had 36 million views; in 2015 people together watched 360 million hours of the League of Legends 2015 World Championships during five weeks.
Most importantly, this market is appealing to the 20-30 demographic, especially men aged 18-30 who like video games as much as taking risks. Keep in mind that betshops and betting sites are man magnets. Even bets on Prince William and Kate Middleton’s baby’s name in 2013 were not female-dominated. CNN estimated that men placed forty-three percent of all bets on the name of Prince George.
Incorporating eSports into your offering will bring about challenges: will traditional promotion techniques of attracting people to betting work? Is the traditional sportsbook layout appealing? Are there potential cross-promotional benefits, and how can they be maximised? Challenges are massive and so is the payoff.
Apart from unique content, your players will appreciate your efforts to deliver odds fast and responsively. The resources for setting up such odds feed from scratch would be very significant, both in terms of expertise and money. Meanwhile, good odds feed service helps manage costs down.
Operators and developers have to address a major challenge – the growing number of devices and platforms. A possible way to deal with the issue is building one omni-channel solution that will run cross-platform and cross-device.
Omni-channel is important, firstly because it allows existing land-based operators to leverage their brand to attract new online players; and secondly omni-channel sportsbook increases the lifetime values of players that bet across multiple channels.
A truly omni-channel solution is deployed in retail, desktop, mobile,native iOS and Android environments and in any environment it enables a seamless experience. Make sure your players are able to reach you across all channels. For example, BetConstruct offers Pocket BetShop - a hand-held device that allows an operator to accept bets in any location and instantly give the punter the bet slip.
Your website should work on hand-held devices because mobile betting is driving the growth in gross gaming revenues. Generally, it is estimated that over 3.4bn smartphones and 900m tablets will have been produced by 2017.
Historically, desktop betting products were shrunk down in a mobile browser. This resulted in a poor user experience. Now if you want to succeed, deliver omni-channel experience to your players – they will appreciate the ability to bet on and watch sporting events whenever and wherever they want.
Though not all gambling verticals equally fit for mobile, sports betting leads the way in mobile gambling. This is largely because the main requirement from a presentational perspective is the display of the present odds in a clear and concise manner.
Last but not least, an efficient omni-channel solution offers a single back-end to manage the product across all channels and reduce administration overheads, multiple languages and currencies, payment systems integration and live video streaming as well as such functionalities as cash-out, which in betting is like free returns in shopping - people like both!
BetConstruct Marketing Team