Retain your gamblers : A study of behavioural loyalty in a market with low switching costs

Abstract: The iGaming industry has exploded the last decade. With more competitors on the market with low switching costs, retention of players is an issue not yet resolved. Attracting players through offers has made the iGaming industry less lucrative due to its high competition, where a “bonus war” has taken over. This survey aims to find out how iGaming companies can decrease their churn rate through CRM and loyalty programs to increase revenue and thereby creating a long-term relationship with the player. Based on theory of switching costs and loyalty programs, this thesis investigates how different factors influence customer retention. Interviews with four competing casinos were made to see how they are working progressively towards decreased churn rate. The information provided concluded that management sometimes lacked the understanding of how to utilize consumer information and way of communication to increase their revenue. Loyalty programs were used to somewhat extent and correlates partly to what Berman (2006) describes as an important strategy for customer retention in a competitive, homogenous market. Further research is recommended from a legal, ethical and marketing cost perspective.