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The Business of Social Games and Casino

How to succeed in the mobile game space by Lloyd Melnick

Category: General Social Games Business

How the marketing 4 P’s have changed

Most business schools based their marketing teachings on the 4 P’s (Product, Place, Price and Promotion) but they have not adjusted these pillars for the current reality. An article in the Harvard Business Review, “Rethinking the 4 P’s,” provides a great framework for building your marketing strategy going forward. Rather than the 4 P’s, they suggest a SAVE methodology. Although developed as a B2B marketing framework, SAVE is also relevant for consumer marketing and growth.

Slide1

Solution

Rather than the traditional focus on “Product,” either a good or service, the SAVE approach has you focus your offerings on the needs they meet. Do not concentrate on features or technology, but focus on what your customers want and then build your offering to meet their needs.

Access

Instead of “Place,” retail locations (online or physical) or distribution channels, you should develop an integrated cross-channel presence that considers users’ entire customer journey. The point here is that it is less important to be available through a specific channel or a device but to understand your customer and be available when, where and how they would want it. Continue reading “How the marketing 4 P’s have changed”

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Unknown's avatarAuthor Lloyd MelnickPosted on March 17, 2015March 6, 2021Categories General Social Games Business, General Tech Business, Growth, Social Games MarketingTags 4 P's, Customer satisfaction, marketing, SAVE1 Comment on How the marketing 4 P’s have changed

Why free stuff or lower prices don’t keep customers happy

One lazy and ineffective way to keep customers happy is to lower prices or give them more things for free. Companies that do not know their customers well, or do not want to, often respond to the question of how to increase customer satisfaction or retention by lowering prices. In free-to-play products, this tactic involves giving users more virtual currency.

The lazy answer

This response is often a knee-jerk reaction to the question of “How do we improve our customer relationships?” It demonstrates that the person/company does not want to address the true dynamics of the relationships. Everybody would rather pay less for a product or get bigger free bonuses and rewards. It does not reflect any understanding of your users, their motivations or why they use your product.

Slide1

The reality of customer satisfaction

The reality is that users and players are motivated by many factors and rarely is cost the primary reason they use a product. The exception is companies that are focused solely on being a low cost provider, the Walmarts and Aldis, and for them price is the greatest lever to increase user satisfaction. In other cases people are driven by unique features or experiences that builds a bond with the product.

Does not create competitive advantage

The biggest mistake in throwing free stuff at users or players (or lowering prices) is that it does not create competitive advantage. Your competitors can easily match or beat what you are doing. If you are giving away five dollars worth of product daily and they want to steal your customers, they can give away $10. You end up with a race to the bottom in terms of pricing, and when you reach the bottom nobody has a particularly good business other than the companies built to compete on price (again, the Walmarts and Aldis).

Determining what creates satisfaction for your users

The first step is understanding what about your product or game motivates people to use it. There are several ways to build this understanding (listed in my order of preference): Continue reading “Why free stuff or lower prices don’t keep customers happy”

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Unknown's avatarAuthor Lloyd MelnickPosted on March 12, 2015April 24, 2021Categories General Social Games Business, General Tech BusinessTags Customer satisfaction, customer service, free, retention, Sean Ellis1 Comment on Why free stuff or lower prices don’t keep customers happy

App to find Blue Ocean opportunities

blue oceanAnyone who reads this blog knows I am a huge fan of Blue Ocean strategy. Not to over-simplify, but blue ocean strategy is a methodology to find non-competitive market opportunities rather than fighting with other companies in an existing space. It is also a tactic popularized by Peter Thiel in his new book, in which he urges companies to find a monopoly opportunity.

Recently, someone from the Insead Blue Ocean Strategy Institute reached out to me and shared an app that they have created. The Blue Ocean Strategy app for the iPad facilitates finding a blue ocean strategy. I have just started playing around with it but if you love blue ocean like I do, you should give it a try.

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Unknown's avatarAuthor Lloyd MelnickPosted on March 10, 2015April 11, 2020Categories blue ocean strategy, General Social Games Business, General Tech BusinessTags blue ocean strategyLeave a comment on App to find Blue Ocean opportunities

It is about your Majors, Captains and Lieutenants

ArmyMy first business partner taught me something very valuable: The worth of captains and lieutenants in the military, which you can extend to the business environment. During the Cold War, NATO had a significant disadvantage in the number of forces it had versus the number that the East Bloc possessed. It was a widely held belief, however, not only among NATO leaders but also military academics, that the two sides were very evenly matched and in an actual battle the western forces would hold their own or prevail despite the numbers.

Even now, you see many of the forces that oppose the west (such as ISIS and al-Qaeda) score large successes against much better-equipped opponents. Part of this success can be attributed to the power of local commanders in these forces.

Midlevel officers make the difference

The strength of NATO’s mid-level officers was credited with closing this gap. While Eastern Bloc mid-level officers were taught to blindly follow orders from their superiors, or suffer harsh consequences, Western mid-level officers were given great autonomy to make battlefield decisions without waiting for direction or even contravening standing orders that were overtaken by events. By having strong leaders who had the independence to make decisions, western military forces were at a competitive advantage. (And let’s not forget, Captain Kirk never got into real trouble for crossing into the neutral zone and the Federation regularly beat up on the more militarized Romulans and Klingons.) Continue reading “It is about your Majors, Captains and Lieutenants”

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Unknown's avatarAuthor Lloyd MelnickPosted on March 5, 2015April 6, 2015Categories General Social Games Business, General Tech BusinessTags leadership, Middle Management, Midlevel officers, NATOLeave a comment on It is about your Majors, Captains and Lieutenants

Why a Chief Advocacy Officer is a bad idea

I have been reading many articles about customer delight and how great customer experiences improve a company’s profitability and growth. I recently came across a  trendy concept in business: having a Chief Advocacy Officer (CAO). A CAO is a senior (C-Level) executive who represents the customers interests. While initially appealing and backed by some of the best thinkers in the customer experience universe, the idea of having a C-level position to advocate on behalf of the customers’ interests is flawed.

Slide1

The fundamental flaw in establishing a CAO position is that it implicitly allows everyone else in the organization not to think about the customer. If a company is going to consistently exceed customer expectations, everybody in the organization must focus on the customer. When there is a CAO, others in the organization feel that since the CAO is serving as the representative of the customer, they do not have to think about the user.

An additional flaw is that a CAO often becomes an adversary to other functions. Finance sees the CAO as somebody who is going to make demands that impact revenue. Design sees the CAO as somebody who is going to conflict with their vision. Marketing tries to avoid the CAO. While all of these functions would benefit from being customer driven, the insertion of a CAO creates a dynamic where the customer becomes an internal competitor.

The key to building a successful business is not putting one person in the role of customer advocate, but making everyone across all functions think as customer advocates. That is when you will truly delight your users and generate great loyalty and retention.

Key takeaways

  1. While the idea of creating a Chief Advocacy Officer is appealing, it is a flawed concept that prevents a company from truly becoming customer driven.
  2. Rather than having one person or a team represent your customers’ interests, everyone in your organization should be building and marketing products to delight customers.
  3. A Chief Advocacy Officer also can create tensions between functional areas because they see the the role as a competing interest and not part of their success.

 

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Unknown's avatarAuthor Lloyd MelnickPosted on March 3, 2015April 6, 2015Categories General Social Games Business, General Tech BusinessTags CAO, customer drivenLeave a comment on Why a Chief Advocacy Officer is a bad idea

How bad profits can kill your company

I came across an article from 2012, “Is Your Company Hooked on bad profits?” by Fred Reichheld, a Bain Fellow, that is very relevant to today’s tech companies. Bad profits are revenues earned at the expense of customer relationships. These bad profits are generated usually with short-term revenue goals that over a longer period make your customers more likely to churn.

Slide1

Examples of bad profits

As a consumer, you probably have many examples you can list of bad profits. Some of these are banks charging late payment or bounced check fees not in line with their costs. It could also be rental car agencies charging you more per gallon if you do not return your vehicle with a full tank of gasoline than you would pay for a fine French Bordeaux. It could be a wireless phone company charging you crazy international roaming fees. Maybe a fitness center locks you into a one year contract because they know you won’t be happy in a month. And it could be a free to play game company tricking players into spending premium currency by creating misleading buttons. Remember how AOL made you jump through about twenty agents to cancel its service? Unfortunately, these examples are too numerous to list. Continue reading “How bad profits can kill your company”

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Unknown's avatarAuthor Lloyd MelnickPosted on February 26, 2015April 6, 2015Categories General Social Games Business, General Tech Business, GrowthTags Bad Profits, Customer satisfaction, NPSLeave a comment on How bad profits can kill your company

Smart CRM is not spam

When I wrote about dumb companies and smart CRM last month, one surprising concern I heard is that the CRM would be interpreted as spam by customers. The value, however, of smart CRM is that customers consider it relevant and value it.Smart email

My definition of spam

What most people consider spam is communications (primarily email but it can be push notifications, SMS messages or even robo-calls) that has not meaning to the user and the user easily sees that. It is communications that is sent to thousands or millions of customers (or potential customers) with the hope that a fraction of a percent will respond to it.One element that does not define spam normally is frequency. I met only get one message from a company (say a Canadian pharmacy selling cholesterol medicine) but because the message is undifferentiated and clearly not written for me personally, I consider it spam. Continue reading “Smart CRM is not spam”

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Unknown's avatarAuthor Lloyd MelnickPosted on February 24, 2015April 6, 2015Categories General Social Games Business, General Tech BusinessTags CRM, email, smart CRM, spam2 Comments on Smart CRM is not spam

Cancel all meetings, be successful

I recently met with a former colleague who has been leading marketing efforts for one of the top five US game companies for the last ten years, and she told me about one small thing they did that has had a tremendous impact on their success and culture. The company has gone from being a relatively small game developer with no external financing to a part of one of the largest, multi-billion companies in the video game industry. What is amazing that over the ten years, the company has not experienced any serious downturns or down-sizing, which in the game industry makes it the exception to the rule.

Slide1

The secret to success

I was speaking with my colleague about what they do differently that leads to this success and she mentioned how at the beginning of every year they cancel all meetings. Then they start from scratch scheduling necessary meetings. There are multiple benefits to this tactic: Continue reading “Cancel all meetings, be successful”

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Unknown's avatarAuthor Lloyd MelnickPosted on February 24, 2015April 6, 2015Categories General Social Games BusinessTags Efficiency, MeetingsLeave a comment on Cancel all meetings, be successful

How to measure customer satisfaction

Although I have written many times about customer satisfaction and how good experiences positively impact customer lifetime value, I have not presented a good way to measure it. As we all know, if you do not measure something, it usually does not get done. A recent article in Bain & Company’s Insights newsletter, “Who Should Run Your Net Promoter System,” does a great job of explaining how to measure customer satisfaction and how to manage the measurement process.

What is the Net Promoter Score?

For such a powerful metric, the net promoter score is very straightforward. It is the answer to one question, on a scale of 1-10: How likely is it that you would recommend the company to a friend? Those who are answer with a 9 or 10 are considered loyal enthusiasts who will keep buying and refer others. Those who answer 7 or 8 are passives, satisfied but unenthusiastic customers who are vulnerable to churning. Those with a score of 0-6 are considered detractors, unhappy customers who can damage your brand and impede growth through negative word-of-mouth. Continue reading “How to measure customer satisfaction”

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Unknown's avatarAuthor Lloyd MelnickPosted on February 19, 2015March 19, 2015Categories General Social Games Business, General Tech BusinessTags Bain, CS, customer service, Net Promoter Score, NPS6 Comments on How to measure customer satisfaction

How CS can impact LTV

Two personal, and comparable, experiences recently showed directly how customer service impacts lifetime value. As many of you know, I travel frequently on business and rent a car about 40 weeks per year, making me a “whale” to car rental companies. I am also relatively loyal to companies, I limit my choices to two companies and probably use my favorite 75 percent of the time.

Slide1

The Ace Rent-A-Car story

A few months ago, I rented a car from ACE Rent-A-Car. I had rented from Ace about 15 times already in 2014, for 30+ weeks, from its Chicago location.

After going out for dinner one night, I discovered that my rental car had a flat tire. Unfortunately, the car I rented did not have a spare tire (yes, there are cars now that are sold without a spare). It was about midnight in Chicago and it was cold so I called Ace with my problem even though I had waived roadside assistance. The first two times I called I was placed on hold 5-10 minutes and the person had no idea how to help. The third time I called they were friendly but explained they could not help because they were acquired by Budget Rent-A-Car (still not sure if it was a system-wide acquisition or the O’Hare location) and gave me a phone number for Budget. I was annoyed as it was getting quite late and I did not feel it was appropriate to rent cars that did not have a spare (and not let the customer know). Continue reading “How CS can impact LTV”

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Unknown's avatarAuthor Lloyd MelnickPosted on February 17, 2015March 19, 2015Categories General Social Games Business, General Tech Business, LTVTags Ace Rent-A-Car, customer service, Enterprise Rent-A-Car, lifetime value, LTVLeave a comment on How CS can impact LTV

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Get my book on LTV

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Understanding the Predictable delves into the world of Customer Lifetime Value (LTV), a metric that shows how much each customer is worth to your business. By understanding this metric, you can predict how changes to your product will impact the value of each customer. You will also learn how to apply this simple yet powerful method of predictive analytics to optimize your marketing and user acquisition.

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Lloyd Melnick

This is Lloyd Melnick’s personal blog.  All views and opinions expressed on this website are mine alone and do not represent those of people, institutions or organizations that I may or may not be associated with in professional or personal capacity.

I am a serial builder of businesses (senior leadership on three exits worth over $700 million), successful in big (Disney, Stars Group/PokerStars, Zynga) and small companies (Merscom, Spooky Cool Labs) with over 20 years experience in the gaming and casino space.  Currently, I am the GM of VGW’s Chumba Casino and on the Board of Directors of Murka Games and Luckbox.

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