"SPECIAL REPORT - PART I
Cross-Selling in 2024: Key in the digital marketing strategy of online gambling operators"

In the dynamic online gaming sector in Spain and other similar regulated markets, operators face an increasingly complex and costly challenge: to thrive in a highly competitive market, while advertising restrictions that hinder the acquisition of new customers are increasing.

The solution that is emerging among companies that hold several licenses and have experience in more than one vertical, is cross-selling.

In this first part of the SPECIAL INFOPLAY on cross-selling, we explore what it is and how cross-selling is becoming an essential component for operators in regulated environments. Subsequently, in a second part, we will analyze specific examples of promotions and communications of this type, both before the Royal Decree on Commercial Communications of 2020 and at present.

Cross-selling: concept and evolution outside the sector

Cross-selling is a marketing and sales strategy that consists of offering complementary or related products to customers. This tactic seeks to increase the value of the customer's purchase and/or their Lifetime Value for the company.

Although initially cross-selling was closely related to commerce and complementing the shopping experience by offering items that enhance the main product, over time it has transformed into an independent and very successful area in sales departments.

• On a timeline, a first example would be what we have been witnessing for decades in appliance or telephony stores, where when selling a mobile phone, the purchase of accessories such as cases, additional chargers, or services (such as insurance or extended warranty service) is suggested.

• A reality that is increasingly present in the service sector and that has been the subject of criticism in banking and products (now mostly unrelated to finance) that are offered. We are not talking about proposing a credit card or insurance when opening a savings account, but turning the account holder into a potential customer for products such as home and car insurance, security systems, or even selling real estate and vehicles.

• With the rise of e-commerce and the management of customer data and information, airlines, hotels, and flight or accommodation search engines have also implemented cross-selling by offering car rentals, travel insurance, or restaurant reservations as a complement to the purchase of a flight or a hotel stay.

• And in a last step, as a precursor to cross-selling in the world of online gaming, to cite how in the last decade the video game sector and others alike, proliferate the sale of additional content (add-ons, expansion packs or downloadable content, premium features, or even the integration of related products or games). An example would be when a player who has purchased a particular game, for example, a strategy game, might receive recommendations to try another game from the same company with certain similarities.

Cross-selling in Online Gaming

It is not easy to find ourselves in the current landscape with gaming operators who have remained for years offering only a specific gaming product. It is evident that despite having managed to lead a segment, operators have been characterized by expanding their offer through the integration of additional products.

If we look at which online gaming companies have been successful in their leap to the Stock Market or what corporate movements (mergers and acquisitions) have stood out in recent years in the sector, the reality is that past success stories such as Pinnacle, Paddy Power, FullTilt Poker, or PokerStars specialized in a specific game, have been giving way to multi-product operators that although they continue to have one as a flag, have been able to develop more verticals.

In fact, with the arrival of regulations and in most countries with a license model by product, in the online gaming sector, the idea was extended that the big gaming brands should be able to successfully integrate at least three of the main verticals: poker, casino, slots, sports betting, and bingo. With special cases like the well-known resignation of Winamax to casino games or slots, or the creation of specific brands such as TodoSlots.es where hyper-specialization is imposed.

Under this new reality, both the States (Regulators) and the Operators would improve their financial expectations, while trusting in the integrity of both, supporting the idea of recreational gaming, so that players would not suffer excessive promotion of games for which they had not shown interest.

Cross-selling in the Regulated Markets

Since regulations on advertising such as the Dignity Decree (Decreto Dignità) in Italy or the Royal Decree on Commercial Communications of Gaming Activities in Spain, de facto restricted the promotion, bonuses, and sponsorship of gaming and betting activities, their economic impact on the online gaming sector has translated into a significant effect on the marketing and advertising strategies of operators.

Therefore, what was born as a secondary part in the marketing departments of operators, has become an urgent need and today in 2024, cross-selling has experienced such a significant evolution that robust markets like the Spanish, Italian, or British need more than ever professionals in cross-selling to improve the results of the increasingly limited traditional channels of marketing and CRM.

In fact, it is a constant in the situation reports, to see how investment in marketing has drastically and dramatically decreased, as well as the acquisition of new players since the implementation of the new regulations. However, most operators maintain or have improved figures such as those of active players or player activity, despite the advertising restrictions.




And this is thanks to cross-selling, understood in this context as the practice of getting players who registered or have a clear customer orientation for one product, to end up playing other verticals. Therefore, in an environment where acquiring new customers has become more challenging and costly, maximizing the value of current customers and converting a basketball bettor into a multi-sport bettor, or a poker player into a blackjack player or football bettor, is crucial.

RETENTION AND CROSS-SELLING

Focusing on Spain, it is worth remembering that several of the operators who obtained licenses in 2012 had time to try to maintain an existing database. Not so much for completely new companies that ventured into the regulated market without previous experience or brands, or the "newcomers" in 2018 after the new window of granting permits to operate.

But it was after the Royal Decree on Commercial Communications, applied throughout 2021, when major limitations in advertising were added, so those with an established customer base had to carry out the new strategy: customer retention.

Retention, in sectors like online gaming, implies maintaining a solid and continuous relationship with existing customers. And a base of loyal and satisfied customers becomes essential if you want to try to convince them to try other games. Therefore, the challenge for CRM (Customer Relationship Management) professionals and the improvement of user experience was to work on cross-selling, mainly because it is much easier and less costly to sell to customers who already know and trust the brand.

Moreover, with current technical integrations, it is not necessary to change the cashier for example to play from poker to casino.

However, the main challenge of this bet is that the prestige of the brand is at stake. PokerStars, for example, received constant complaints from its loyal base of regular poker players, when while drastically reducing their loyalty and reward programs in poker, the sports betting or casino product was constantly promoted, both in terms of communications (newsletters, emails, banners) and within the poker lobby itself.

The Art of Cross-Selling

As is the case in specialized sectors like online entertainment, professionals had to retrain and learn how to perfect cross-selling strategies in a context as complicated as that presented by regulation which, for example, did not allow new players access to promotions (restricted only to verified players with more than 30 days of seniority).

The major shift in this field was that different experts and departments were forced to work diligently in understanding all gaming products. An expert in the promotion and development of poker campaigns had to know how sports betting works and vice versa.




True mastery in this sector not only involves attracting new customers but also deepening the commitment with those who already frequent casinos and online betting houses.

In any case, operators and employees were fortunate to see how customer knowledge became more accessible with the progress of Big Data. Companies accumulate valuable information about players' preferences, behaviors, and needs. This knowledge allows companies to make more personalized and relevant cross-selling offers, increasing the chances of success.

Additionally, retained customers tend to have a higher level of trust with the brand. This trust is crucial for cross-selling, as customers are more likely to consider and accept recommendations for additional products or services from the brand.

In summary, cross-selling in the gaming sector is not just an expansion; it's a redefinition of the player experience. It's not only about offering gaming products to existing customers, like offering sports betting to casino players and vice versa.

In the second part of our ESPECIAL INFOPLAY on CROSS-SELLING, we will review concrete examples of how cross-selling occurs in operators of the regulated Spanish market.