The digital space provides many opportunities for the development of online casinos since physical borders are not an obstacle to visiting them anymore. But at the same time, the risks of losing customers or player churn also increase. This is explained by the high competition in the iGaming market and the ease of connecting to the services of another online casino operator.
To build customer retention marketing strategies, it is essential to understand the degree of threat of this phenomenon. Otherwise, companies will waste money on customer retention without any urgent need. The latest developments in the field of AI will help in predicting player churn. Advanced AI algorithms can easily process huge amounts of data and identify patterns that indicate an increase in threat.
Using AI in the iGaming Industry
There is no doubt that the active use of AI in online casinos is one of the significant reasons for the success of this industry. By minimizing human error and responding quickly to all challenges, AI is making an important contribution to improving the player experience. In particular, AI algorithms are used to perform the following tasks:
- Prevention of fraudulent activities by analyzing the transactions that players make;
- Studying customer behavior patterns to develop a more effective marketing strategy and make personalized recommendations, bonus offers, etc.;
- Constant monitoring of gaming activity to hinder attempts to deceive the casino operator;
- Tracking players with gambling addiction to offer them effective practices for responsible gambling.
Therefore, it is not surprising that AI algorithms have been adapted to predict the outflow of online casino visitors to take effective retentive measures in time.
AI Algorithms for Predicting Customer Churn That Are Worth Your Attention
The development of AI, in general, and Machine Learning, in particular, is moving at a very fast pace. Therefore, the market constantly offers new models and algorithms for analyzing consumer behavior and predicting a possible outflow of players. Despite their diversity, the challenge they face is the same: to determine whether the player is prone to continue using the services of an online casino or to stop visiting the platform. To date, the following algorithms are best suited for this task:
This method allows you to predict whether the consumer will continue to use the services of an online casino based on the study of the relationship between various factors and the classification of a particular case as:
- “Yes” ― will continue to use the gaming account;
- “No” ― prone to churn.
To build a logistic regression, you can use both a single predictor and multiple predictors, so the name of the algorithm is generic and can include a lot of variations.
Random Forest Regression
This method takes into account multiple variables that can influence the decision to leave the platform, such as the device used to log in, payment methods, age, game selection, etc. All these factors are built into decision trees, which, in turn, are combined using such an ensemble algorithm as Random Forest.
Support Vector Machines
Not all causes of churn are on the surface, so if you want to dig deeper and find out about the hidden ones, you need to turn to this method. It allows you to build multidimensional spaces and map the expected behavior of players. Proximity or a great distance from target values will show which event class your unknown variable will belong to, thus predicting the action of a particular player.
Naive Bayes Classifier
To mark a player as inclined to a churn or not, this algorithm uses the principle of Bayes’ theorem. Its advantages are in the speed of making a forecast and the ability to not only classify the behavior of players into two classes but also determine the degree of risk for predicted events. The Naive Bayes algorithm uses some simplifications about the characteristics of the data you are working with. But nevertheless, it has a high predictive potential and, therefore, is often used by analysts.
Rapid Response to Analysis Results is the Key to Success
Data-driven decisions help online casinos take the right steps in time to keep consumers. The analysis shows that a large proportion of player churn occurs in the first two days after account registration. Therefore, it is necessary to act immediately and to do this on the basis of proven and effective AI algorithms. After receiving the results of the analysis, you will be able to make the right bonus offer in time, for example, by sending a Spin City promo code to a new visitor, to interest in new arrivals of games similar to those that the player was viewing, to offer special game conditions for the device from which they entered, etc.
The potential of using AI both for analyzing consumer behavior in general and predicting the outflow of players, is huge. And if you can not only analyze their behavior correctly with the help of AI but also take timely measures to retain them, the churn rate can be significantly reduced.