How Price-Sensitive Is The Typical Online Gambler
One of the great debates on sports betting Twitter is pricing. Without fail, the topic is resurrected several times a year, with the same people making the same arguments and convincing no one to change their minds.
Since changing hearts and minds through 280-character bursts on Twitter has proven ineffective, I’ve decided to make my case via a 900-word long-form column.
Here’s a look at the root of the latest flareup:
“Imagine all these people paying $11 for a ticket to the Black Panther movie when you can buy the same ticket for $10 at a different theatre down the street”— Chris Fargis (@cfargis) January 21, 2023
It’s not a huge effort, no. The point I am trying to make is that when people consume products casually, they often don’t optimize for small changes in price. Instead they choose convenience (“the app where I already have an account”) or brand or social/community, etc.— Chris Fargis (@cfargis) January 21, 2023
Spoiler alert: I fall firmly in the Chris Fargis camp on this one. Yes, people will choose price when sports betting products are identical, but whether it’s land-based slots, mobile sports betting, or online poker, bettors have a checklist of items they are looking for. Pricing is on the list, but it’s part of a distant trail pack.
It All Comes Down to Convenience
At the top of every list, even the sharps, is convenience.
No one likes to be inconvenienced, and many people will pay a premium to avoid being inconvenienced. For instance, how often have you seen someone pull into a gas station that is $.10 more per gallon because the one next door has a car or two waiting in line? Or the cheaper station is across the street and requires crossing traffic.
Similarly, most people will choose a slightly more expensive gym, massage, or yoga class if it shaves some time off their drive. Or the ultimate convenience, valet parking. Many people will hand over five or 10 dollars to a valet if they can avoid parking in a garage and walking a couple of minutes to the entrance.
For me, the best analogy is the grocery store. Just like grocery shopping, online bettors often have multiple options to choose from. And like a grocery store, some sportsbooks or online casinos have better prices than their peers on some things and worse prices on others.
Yes, you could spend an hour looking through grocery store flyers to see who has the best price. But who is traveling to multiple stores (more time and gas) to get the best deal on every item? And what happens when an item is sold out?
Most people choose convenience. They go to the store they prefer for many reasons like location, price, inventory, how busy it is, and a dozen other factors. Even the most price conscience shoppers go where they will save (or think they are saving) the most on the totality of their items. They’ll pay an extra $.30 for milk if they save $2 on chicken.
The Online Bettor’s Checklist
That said, convenience is ubiquitous in the online gambling world. If they have a phone, tablet, or computer nearby, a bettor is always near a gambling website.
When convenience is no longer a factor, pricing can play a much bigger role. Still, that doesn’t propel pricing up to the top of the list. It moves everything up the list.
Unless the pricing difference is egregious, pricing is no more important than other factors for most bettors. Notice I said most bettors, as there is a non-trivial group of “sharps” who put an emphasis on pricing. But for most bettors, it’s enough for a site to offer competitive prices. Now, what constitutes a competitive price can be rather subjective as its often juxtaposed against the other factors listed below.
Along with competitive pricing (not best, just competitive), the list of things a bettor looks for includes:
- A trusted brand
- A good UX – software, offerings, CS
- Promotions and Rewards Programs
Bettors would prefer all three, but that’s quite rare. They often settle, based on individual preferences. One customer might emphasize UX, while another views all three equally, and yet another views promotions and branding as critical, with UX a distant third.
The point being online gambling sites need to pay attention to all of these factors.
A trusted brand is a combination of things.
Trust usually starts with legal and regulated, but it’s also one:
- The bettor knows or has had a good experience with.
- That resonates with the bettor as a gambling product.
Providing a good user experience is another must. Going back to our grocery store analogy, a good customer experience while grocery shopping includes the following:
- A clean, safe store.
- Having the items the customer is looking for.
- An easy-to-navigate layout.
- Fast-moving lines.
- Working carts.
- Friendly, helpful employees.
With an online gambling site that transforms into an easy-to-navigate betting lobby, helpful customer service, fast load times, and pleasant color schemes and sounds.
If you provide customers with a good experience, they’re often willing to pay more.
Promotions and Rewards
Promotions and rewards may seem part of pricing, but they should be viewed differently. There is a big difference between a price-savvy customer and a customer searching out bonuses. One is being frugal and the other is looking for free money.
There are two types of bonus hunters:
- A customer who needed a nudge to try online betting or switch from a competitor.
- A true bonus hunter with no loyalty, who rides the bonus merry-go-round until the free money is all gone.
Pricing plays a role, but an online sportsbook or online gambling site can’t rely on pricing. It needs to do many things well.
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