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The Business of Social Games and Casino

How to succeed in the mobile game space by Lloyd Melnick

Tag: targeting

Why you should not focus just on existing players or customers

Many companies, especially game companies, build out their products based on how early customers like the product but this approach can inhibit growth. An article in the Harvard Business Review, “Focus On the Customers You Want, Not the Ones You Have” by JP Eggers, shows that the hard part in creating a successful product or game is not appealing to users early but sustaining.

The problem with early users

CustomersEarly players are by definition early adapters. They probably have a higher preference for innovation and are more likely to take risks. They may have different ways of making decisions, including whether they monetize in a game, if they invite friends or if they come back. An early player may be very enthusiastic and tell friends but then go on to the next shiny object, so basing decision on their play would suggest you should focus on getting them to bring in as many users as possible before they leave.

Companies run into problems if they base product decisions on these early adopters, which is often the case. Eggers also points to research that shows early adopters are different. According to Eggers, “early adopters are typically younger, more willing to take risks, more eager to try new things, more affluent, and substantially less numerous … First, what worked with early adopters isn’t likely to work with later adopters. In launching new products or services, start-ups tend to accumulate deep knowledge about customers at the leading edge of a technology. But that knowledge doesn’t necessarily apply to other consumer groups; that’s one reason so many new firms struggle to create second rounds of offerings. To be successful, companies need to innovate for the consumers they want, not the ones they have.”

Another issue comes up because early adopters do not want to see the product expand to the mass market. A chess app may appeal strongly to grandmasters but if it becomes something the mass-market plays, the grandmasters may no longer want to use the product. Similarly, Facebook lost some of their young users when their parents started using it, but there were hundreds of millions more adults than teens. Although it worked for Facebook, the influx of users so alienated the early users of MySpace, you may no longer even remember MySpace.

A solution

There are several strategies to combat the problem of having a product that either is not attractive to new users or alienates existing users:

  • Innovate for future users. Build features and new content so it appeals to new users, what people not currently using your product would want.
  • Engage early adopters. By engaging your customers, you ensure they feel connected to the product. Letting them have a voice, even if you cannot always listen to it, keeps them engaged and likely to cope with changes they do not consider ideal.

The key is understanding that what appealed to your first users, and their behavior, is not necessarily what will drive your growth.

Key Takeaways

  1. Early users will not have the same preferences and consumption patterns as customers you attract later in the product’s life cycle.
  2. If you slavishly build features and new content for existing users, it may not appeal to new users.
  3. The key is to innovate for new users while keeping your early adopters engaged so will tolerate the changes to the product.

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Lloyd Melnick Analytics, General Social Games Business, General Tech Business, Growth, Social Games Marketing Leave a comment July 8, 2015January 4, 2016 2 Minutes

Lifetime Value Part 16: Using lifetime value to target prospects

One of the most valuable applications of customer lifetime value (LTV) modeling is using it to target the highest-valued customers or players. I have written many times about the importance of LTV and how to calculate it. One of the most powerful applications of LTV is online customer targeting.

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As an article on MarketingProfs points out, LTV targeting starts with a deep understanding of your current customer base so you can develop high-LTV and low-LTV customer segments. Doing so will allow you to create a profile of the “personas” that will have the best retention, highest word of mouth and spend the most on your products.

High-LTV personas could be “women over 35 who spend most of their day at home.” By knowing the persona, you can create personalized messages to strategically target customers who match that profile, and reach them through a variety of channels.

Once you have built personas for your players or customers, there are four ways to leverage this understanding: Continue reading “Lifetime Value Part 16: Using lifetime value to target prospects” →

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Lloyd Melnick Analytics, General Social Games Business, Growth, LTV, Social Games Marketing Leave a comment May 29, 2014June 4, 2014 3 Minutes

Get my book on LTV

The definitive book on customer lifetime value, Understanding the Predictable, is now available in both print and Kindle formats on Amazon.

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.

For more information, click here

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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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