Taking a Break

This week, I’m taking a break from posting the hard numbers of rakeback value, statistics, and analysis. I want to tell you about what made my Thursday afternoon and early evening.We all have to do something we’re passionate about. For me, at least as it relates to work and making money, the passion lies in marketing and looking for a good spot to get my money/time/interest in. (I guess it makes sense, since I’m in online poker marketing.) Yesterday I got to do both at the same time.Herb, our COO, and I were discussing our recent email open rates, and how we’ve noticed a slight decline in recent months. We decided to both freshen things up, do some A/B testing, and place a friendly wager. I come up with one subject line, he comes up with another. The higher open rate gets bought lunch at a favorite nearby spot – Fogo.As soon as he submitted his subject line, I knew I was in trouble. So far, I’m getting crushed. Herb has an open rate about 1.7% higher than mine. Since we’re about 18 hours in, it’s probably too much for me to make up.But there are a few wholely unrelated points here.1.) Do A/B or split testing. It’s so important to try different things. With your websites, with your emails, with your copy, with your advertisements, and with anything else you can think of. You will find out how to gain small edges. (Sometimes big ones.) It’s the sum of all these edges that makes you great or makes you suck. He says it better. Point is – test, then test some more. Then exploit your edges.2.) Keep in touch with your customers. Email Marketing is a part of any customer touchpoint strategy. It isn’t as good as personal relationships on IM or the phone or in person, but its still crucial. If you aren’t keeping in touch with your customers, get on it.3.) Enjoy what you’re doing. Spice it up. Email open rates aren’t sexy, but a free lunch always is. Compete. Compete against your competition, against each other, and against yourself. If you aren’t ready to do that, you may not be ready to do this.And finally, when you put in the work, take a second to enjoy it and observe the results. Even if you are down by 1.7%.-Byron

Monday Sales Call: I Finally Gave into Twitter

I finally gave in and created a Twitter account for PAS. The account will be used to market PAS as well as update our existing publishers on new rooms, software upgrades, promotions and much more. I will also throw in some personal Tweets about what kind of trouble I find myself in outside of the office. I really loathe seeing Tweets on Facebook so I will not subject my friends to such tomfoolery.I was offered rakeback yesterday on Twitter and Facebook! Both messages went something like this:”Hi! I saw you like poker. We should make a rakeback deal!’Hmmm. Why should I give you business? If you are going to blatantly spam me on a social network at least pitch yourself. Tell me what you offer (rooms, cash out, support, etc) and what separates you from other rakeback affiliates.So far I have 31 followers. About 60% of them are spam accounts. They probably found me by searching “affiliate” or “poker” on Twitter. I have been hesitant to create an account for PAS. I don’t think Twitter is a viable marketing channel. I finally gave in and decided to find out for myself. I hope to prove myself wrong 🙂

The Intersection

Last week, PAS told you a rakeback customer was worth $520.31. We also told you the 80/20 rule was a factor. But, as you may have guessed, we still have more information we have not shared. Regarding time to produce $X amount in commissions, some of it is below:

  • $20: 56.9% of all generators achieved this in an average of 3.28 months
  • $25: 54.5% of all generators achieved this in an average of 3.53 months
  • $40: 50.6% of all generators achieved this in an average of 3.97 months
  • $50: 48.3% of all generators achieved this in an average of 4.05 months

Note: The dollar figure is $ amount of commissions.

“Generators,” like last week, means players who make money for the rakeback site. Now, of course, I want to know what % generated $500 and how long that takes. $1,000 too. $5K?? Yep, come back next week.

I’m not sure about you, but I was a little bit surprised, keeping in mind that many customers produce a small amount of revenue and a few produce a lot, that as high a percent generated as much as they did. In addition, the time to get to these numbers was shorter than I expected. Every report you run isn’t just for fun. It should tell you how to make more money or more easily achieve your objectives. This report tells you that rakeback customers sign-up when they are ready to play and will begin playing immediately.

Lifetime value will come earlier in the life cycle than many other businesses’ lifetime value numbers. This may seem obvious, but take it one level deeper. Where is a player located online when they are ready to play? You might think it’s a search engine. He knows what he wants, he searches, he finds, he signs-up, he plays. BUT, we find player value, coming from a search engine to be a mid-range player value source. This isn’t to discount search engine traffic – it is valuable – but there is more valuable.

It comes at the intersection of two points. He has been studying to better his game and he has verified he should trust YOU. When is the last time you helped your player get better? When is the last time you helped someone you want to be your player get better? Maybe you do it everyday. If so, keep it up, I’d imagine you are seeing the rewards. If not, try it.Over the next couple of weeks, in addition to those big player numbers, we’re going to talk about how to find yourself at the intersection of a newly studied player and a player who trusts YOU.

Monday Sales Call: Writer’s Block

I wasn’t sure what to write about tonight. I have been slammed with work all day and my brain is mush! Couple that with lack of sleep this weekend (blackjack is the devil) and my creative writing skills are that of an 8 yr old.So I decided to write a handy checklist for poker webmasters to use when writing content for their own portals, articles, and blogs.[ ] Write about big name tournament pros. They are major draws to our industry and new players love to hear about their success/failures.[ ] High Stakes results. Report on the high stakes games online AND live. How was the action in Bobby’s Room this summer?[ ] Where are the fish playing these days? Do some research (poker friends, forums, etc) and let your players know where the best games are.[ ] Write Part 2 updates on previous blog posts you have written.[ ] Tell readers about YOUR poker experience. Where you started, where you are at, and how you got there.[ ] Learn a new poker game and write about it.[ ] Write about the poker set up you have. Screens, mouse, programs, etc.[ ] Write a trip report. Poker related trip or not, trip reports are always entertaining. (Also helps if you get drunk and do something embarrassing that is worth writing about)[ ] Go to your local casino and play some poker. Write about your experience playing live versus online.[ ] Poker Gossip: How did Phil Ivey end up in his WSOP prop bets?Tony

How Much is a Rakeback Customer Worth?

We are often asked some version of the question: How much is a rakeback customer worth? The number is, of course, a crucial one. Based on this number, a rakeback provider can determine how much can be spent to acquire a rakeback customer. The short answer is $520.31*.

Now, it is important to know everything there is to know about this number. It is lifetime value. It is commission, after paying the player, not MGR. It is before promotions are paid. It only includes players who generate greater than $0 MGR. The 80/20 Rule applies. The sample size is substantial. Lifetime value of a customer includes what they will be generating 2 years or more from now.

Therefore, if you go out and spend $150 to acquire a revenue-generating customer, expect to be under water on that customer for some period of time. This number is an average, and because of the 80/20 rule, many customers will never generate anywhere near $520.31 in commissions to you. In addition, the number $520.31 only includes customers who actually made some money for the rakeback provider. People who created rakeback site accounts, or even created poker client accounts, but generated no gross revenue are not included in this average. For example, of all accounts that came via a player-to-player referral, only 40.79% ever generated dollar one of gross revenue.

Therefore, when considering performance numbers, always make sure active trackers is your reference point. The lifetime value of a rakeback customer who came in via referral is $223.73. (This number includes everything bulleted above plus the payout to the referrer.) While still a very high number, it’s not nearly as high as $520.31. This 57% haircut is relevant. It tells you that your player value will vary widely depending on where your customer comes from.

These days you cant find a place where sharks without rakeback exist. But you’d be well advised to find that source where baby sharks swim. It will drive your average player value up. And while we encourage sharing as much as possible at PAS, if you find that spot, don’t tell a soul.

In my post next week, I will elaborate a little bit and talk about time to generate $X and how that plays into your marketing decisions. I will also talk about a little bit about where these high value players came from.

*Past results not indicative of future performance. Then again, some publishers do go substantially higher. Can you?

Monday Sales Call: Reducing Your Variance as an Affiliate

In poker, we can reduce our variance by changing our playing style, stakes, types of games played (example: tournaments have more variance than cash games), and table selection. As affiliates, we can and should reduce our variance by means of diversification.Rakeback affiliates market to the serious/winning poker player who is looking to boost the bankroll and curb variance by getting a percent of their rake back. The big rakeback players have two sources of income: poker and rakeback. Many can have a losing month playing poker but break even (or close to even) via their rakeback payments.Reducing the variance as an affiliate means that if the poker environment changes we are capable in another game to sustain us through a change in the playing environment. In affiliate marketing, if one network does away with rakeback, you can offer CPAs or Rev shares on the same network, but if you are reactionary to changes it may sink your poker affiliate business, staying ahead of the market will be a recipe for success. You also can sign up that user at another network for rakeback which will help smooth out rougher times.When Party Poker did away with the skins back in the day we had a mad dash of players looking for places to play, we were ready with offers from UB, AP, FTP, and Stars. Getting through the rough times and our company staying afloat has enabled us to exploit the market when times are good.June was a rough month for some of the affiliates I work with. I got a lot of “Why are my stats so low” emails and IMs. June has always been a slow month for Raketracker so we weren’t surprised when June numbers were so low this year as well. All it takes is for a few serious grinders (the exact number depends on how large your user base is) to take a few weeks off for vacation, college exams, or WSOP and your numbers will be lower than previous months.Most successful businesses are good at diversifying. Take Macintosh for example. They have iTunes, the iPod, the iPhone, and computers. If iPod sales are down in June, this loss in projected revenue can be made up by their cell phone sales. Poker affiliates should be following a similar business model.CPA’s pay affiliates anywhere from $75-$250 depending on the room and player value you are sending. Revenue Share deals pay affiliates 20%-65% of player’s rake! Be sure to take a look at the sweet CPA and Rev Share offers we now have at Poker Affiliate SolutionsTry marketing to a different type of player. Buy an existing site or create a mini site that reviews the micro limit games on Full Tilt, Poker Stars, Everest, and Party Poker. Sign up the players on CPA (cost per action) or rev share trackers. Expanding your poker affiliate business to different market segments will create a new source of income that will help to moderate the ebbs and flow of the online poker industry.Tony