Key Performance Indicators (KPIs) paly a vital role in helping online casino businesses measure the progress and health of their operation. Essentially, online casino KPIs can show you what you’re doing right and where you need to improve.
Running a successful business requires more than just finding the right casino software solutions and partners. It requires making knowledgeable decisions that are based on data. Making decisions without considering all relevant information could lead you down a disastrous path, and you might not realize the mistake that’s been made until it’s too late.
While there is no one fool-proof formula for running a successful online casino, KPIs, such as those related to money and player behaviour, provide a series of metrics that enable you to measure your casino’s value.
In this article, we’ll discuss the most important KPI online casino data that iGaming businesses use to analyze and improve their brands, helping you to gain a better understanding of how and why key performance indicators are essential to the wellbeing of your operation.
Money-related KPIs
Key performance indicators related to money help you to know where you stand in regard to your online casino profit. They include the following KPIs.
Gross Gaming Revenue (GGR)
Gross Gaming Revenue (GGR) is among the simplest KPI. It is the amount that players wager minus the total amount they’ve won. This metric shows how much money stays with your casino, resulting from your players’ betting activity but before you pay for any of your casino’s expenses. For instance, if over the course of a year players wager a total of $4 million at your casino and win a total of $3 million, the GGR for your casino that year is $1 million.
In short, GGR is the measurement of the game results. It reveals how much the casino won/how much a player lost over a certain time period. That being said, it is important to note that GGR does not account for the value of sign-up and deposit bonuses. These promotions are a casino expense. Also, GGR can fluctuate from period to period because winnings in online casino games are randomly generated, which means actual results may differ from the “theoretical” average RTP ratios.
Net Gaming Revenue
Net Gaming Revenue (NGR) reveals the amount your casino actually earns after expenses are cleared from the total revenue. In other words, NGR is GGR minus bonuses, chargebacks, licensing fees, taxes, commissions paid to payment system providers, royalties paid to game content providers, etc.
This online casino KPI offers a concise and comprehensive analysis of your casino’s performance. It provides a more in-depth look at the project’s success rate compared to GGR as it takes a wider range of costs into account. With that said, NGR covers only a small percentage (e.g. 2%) of the total amount that players wager during a specific time period (turnover).
NGR-to-Deposits
NRG-to-deposits reveals the percentage of player deposits that turn into revenue for your business. As only a small percentage of deposits made turn into NGR, it’s important for your players to be placing wagers as much as possible. Ultimately, NRG-to-deposits helps you to gauge the amount players are wagering from the deposits that they make.
Bets-to-Deposits
Bets-to-deposits allows you to measure how much players bet out of the total amount that they deposit. It indicates the flow of deposited money into the games. However, it’s important to remember that higher bet amounts could be the result of players using bonus money and not the money they’ve deposited.
Overall, money-related KPIs can provide you with a good indication of the general state of your online casino operation. They can tell you if you’ve made a profit, if you’ve generated revenue, the speed of revenue growth, etc. Also, both NGR-to-deposits and bets-to-deposits can tell you how well you’re incentivizing your players to take the next step of depositing and wagering once they’ve set up their account.
People-related KPI’s
People-related KIPs focus on analyzing how users interact with your platform. They are crucial in helping you to gauge player loyalty so that you can make the necessary adjustments to your online casino marketing strategies to get the most out of player lifetime value.
Conversion Rate
Conversion rate compares the total number of users who successfully completed the target action you wanted (e.g. the people who clicked on the CTA link in an email you sent) with the total number of users who could have possibly performed the same target action but didn’t (e.g. the people who received the email but didn’t click the CTA link).
For online casinos, this can be broken down into two types of conversion rates.
- Conversion 1: Visitors to Registered Users – This is the percentage of every person who signed up as a player to every other person who visited the site but didn’t register. When observing the conversion rate for this stage of the player journey, keep in mind that it could be an indication of whether or not you need to change your welcome bonus offer or other promotions strategies in order to entice visitors to join your casino.
- Conversion 2: Registered Users to Depositors – This is the percentage of all registered players who have made a first-time real money deposit and registered players who haven’t. If you are noticing a lack of deposits, this could mean you need to consider including a signup bonus or changing the one you have.
Retention Rate
Like most online casino KPIs, retention rate is generally measured over a specific period of time (e.g. 3 months, 6 months, 12 months). The retention rate gives you a general idea of how long players typically continue to return to your platform before leaving.
It is more cost effective to keep players than to find new ones. That being said, how long a player sticks around can depend on a variety of factors, most of which have to do with the player’s individual preferences. Still, there are ways to improve retention rate, such as by offering VIP and loyalty programs, ongoing promotional campaigns, new game releases, gamification, CRM, improved site usability, reliable and responsive customer support, etc.
Churn Rate
Churn rate is the number of players who discontinue playing at your casino compared to active players over a specific period. Tracking the length of time players stay loyal to your brand can help you design and improve your retention strategies as well as reveal possible bonus abuse. If you notice that a notable number of players who sign up churn as soon as they’ve satisfied welcome offer wagering requirements, you may need to change your bonus strategy.
While there is no one solution for increased churn rate, it is an indication that something is wrong and changes need to be made. High churn rate could be an indication of one or more problems, such as increased competition, player dissatisfaction, insufficient game offering, poor customer service, or other issues.
Hybrid KPIs
KPIs that fall into the Hybrid category are used to link money metrics and indicators related to people. More to the point, they relate to both how your players behave and the financial implications that result from this behaviour.
Cost Per Acquisition
Cost per Acquisition (CPA) is a KPI that represents how much it costs on average to acquire a new player who signs up and deposits. For instance, if you generated 100 first-time depositors from a $5,000 marketing campaign, the resulting CPA would be $50 per each player you acquired.
Analyzing CPA helps you to ensure that your marketing efforts are worth your time and budget. In essence, CPA shows you how much it will cost you on average to acquire a new first-time depositor.
Employing different online casino marketing techniques will result in different CPA values. You can generate traffic for your casino site using different methods, such as Search Engine Optimization (SEO), paid ads, link-buying and affiliate networks. It’s important to analyze which channels perform the best, because thousands of players with high CPA can bring your casino the same amount of profit as a couple hundred players that were acquired with greater ease.
Average Revenue per User
Average Revenue per User (ARPU) reveals the amount of revenue generated by the average single player, or how much that player loses, in a specific time period.
Calculating ARPU is quite simple. It’s a matter of taking all your casino revenue for a certain time period (e.g. month or year) and dividing it by the number of active players during this same time period. The result will show you how much revenue on average each player generates.
Customer Lifetime Value
Customer Lifetime Value (CLV), also referred to as Player Lifetime Value in the iGaming industry, indicates the overall amount of revenue a player brings to your casino during the entire period of time they continue to gamble at your site. The primary goal of all casino marketing efforts is to increase CLV.
To calculate CLV, multiple the monthly ARPU by average player lifetime. You can also cross-reference CLV by player segment. This can reveal which demographics are the most probable to offer the greatest value to your casino. Even analyzing past player lifetime value can help you to predict future CLV, which can be beneficial for planning retention strategies.
Additionally, for a complete evaluation of your marketing strategy, you can compare CLV with CPA. This allows you to analyze the cost associated with acquiring a new customer and the value that player brings. This is important because you shouldn’t be spending more on obtaining players than these players are spending on your games.
Tracking and Analyzing Your KPIs
Once you’ve identified your online casino KPI strategy, the next step is to decide how to track and analyze these key performance indicators.
Although this is something that you can achieve on your own, the actual tracking of KPIs is often best left to online casino software professionals, such as the reputable software platforms we review here at Casinnovate. The reason is that it is necessary for this important data to be captured, stored and converted into information reports that can be readily accessed in the casino backoffice. Once the data has been gathered and the reports have been built, its up to the business to interpret the findings and act accordingly.
Conclusion
The online casino KPI models discussed above can help you track and improve the success of your business. That said, this does not mean that using these KPIs will automatically result in achieving a long-term profitable business.
Player behavior data must be tracked, broken down and analyzed for you to be able to develop the vital growth strategies your casino needs and to create new solutions. KPIs provide you with the different perspectives you need to form a solid picture of how your business is performing. Software providers who are experienced in this field can assist you in building effective management so that you can make informed decisions based on accurate information and meticulous analysis.
Throughout the life of your casino’s operation, you will need to continuously and carefully track these KPIs, make adjustments and chart the effects of the changes you implement. It is only through accurate and continual measurement of KPIs that you can remain competitive and stay ahead of the curve for years to come.
Need help with KPIs? Drop us a line and we can help you partner with the right professionals.
