What’s the secret to winning over your players and having them come back to you time and time again? We’ll let Scott Yeates tell you in this video interview, but we’ll give you a hint: it’s not just multiple promotions and a high rakeback.
With a robust resume as a world-class online poker player and VIP manager for PokerStars, Scott knows a thing or two about bonuses, retention and what players want– and need. What they need, he says, is to be educated on how to play and how to manage their money online. If you can do this– and entertain them– you’ve created a reason for them to deposit with you again. The other carrot that will keep your players coming back for more? A solid VIP program with great rewards.
In this video interview, Scott offers some great tips for building successful rewards programs; how to understand and capture the Internet habits of your players; why you might want to steer clear of South America and why women are the next big thing in Internet poker.
About Scott Yeates:
Scott is currently the head of Poker Consulting Services with Hybrid Interaction Limited and is the former VIP Manager for PokerStars. Following a successful career as a world-class online poker player, Scott decided to switch sides and now advises leading iGaming brands on best practices for awards programs development.
Raw Transcript
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Warren: Hey everyone. I’m Warren Jolly with CasinoAffiliatePrograms.com. I want to welcome you to today’s interview with Scott Yeates. Scott is currently the head of Poker Consulting Services with Hybrid Interaction Limited and is the former VIP Manager for PokerStars. Following a successful career as a world-class online poker player, Scott decided to switch sides and now advises leading iGaming brands on best practices for awards programs development. Today, we’ll learn about the importance of promotions, player retention and what Scott believes will happen to online poker, as well as just some general opinion that Scott has on the online poker affiliate industry. Scott, it’s really good to have you and thanks for joining us today.
Scott: Thank you.
Warren: Can you tell us a little bit about your history and how you made the transition from poker player to joining one of the top corporate operators in the world?
Scott: Well, I was in digital printing until after the dot-com bubble burst. I had customers that were doing $50,000 a year with me that were telling me they were going to do $5,000 the next year. My sales manager asked for projections. I told him they were only going to do $5,000. He said, “We’ll put them down for $55,000 and see what happens.” I knew I needed a new career at that point.
About 2003, I resigned my position. I was going to take the summer off to spend with my boys. Lo and behold, Chris Moneymaker won the World Series of Poker and Internet poker exploded. Poker was a hobby of mine, so Internet poker was a natural. That summer things went crazy. I won like $14,000, $15,000. Then I kept winning trips. I kept having an excuse on why I couldn’t get a real job until about 2005.
I was sending e-mails to the top sites that I was playing at, giving them ideas on how they could improve their program. One of the ones I was really e-mailing a lot was PokerStars because I was upset they didn’t have a rakeback system for us in place. It was causing me to spend over 50% of my rake at other sites. I liked PokerStars, but I just couldn’t justify playing there without the rakeback. I think it was February 2005. I got an e-mail back, “Would you like a job?” I was shocked. Six months later, I was working for PokerStars.
Warren: Did you move over to the Isle of Man where they’re based or did you just work them remotely?
Scott: I worked from them from Orange County, California for the first year and then moved to the Isle of Man for four years.
Warren: How was it living on the Isle of Man?
Scott: It’s like living in the past. It’s very old world. It was a great experience. I loved it. It was definitely old world with the stores closing at a certain time, stores only running one shift of employees. It was a big difference from Orange County.
Warren: Yeah, I can imagine. Living in Orange County myself, that’s a big change. You were at PokerStars. What were you doing at PokerStars when you joined?
Scott: Well, we were going to develop the VIP program. That was what I was e-mailing them about. The concept was everyone was giving 25% rakebacks. The thought process was if PokerStars gives 25% rakeback, everybody else will just give 50% rakeback and we’ll be in the same situation we’re in today. We wanted to develop something that was going to be more sticky and more relevant to the players.
Warren: Upon creating that, did you see some good results in terms of the net increase in rake that PokerStars saw from their VIPs?
Scott: Oh, of course. I think January 1, 2006 was the busiest day in PokerStars history until that period. It just took off. It became so huge. With the improvements that we had the following year, it took off even more.
Warren: Got it. You must have had some exposure to affiliates during your tenure there. That’s a big part of our audience watching this interview today. What was your opinion of affiliates before and after you joined PokerStars?
Scott: My first experience with affiliates was PokerPages and Card Player. PokerPages was a site where I could go to my local casino, play a tournament, and the next day I could log on to PokerPages and see the results, how my friends did, and see who won the tournament. I didn’t understand that they were an affiliate but that was what my dealings with them were. They were one of the top poker portals back then. Ten years ago, they were number one, number two with Card Player. You can see how times have changed. Card Player and PokerPages have really gone down the ranks as people have developed new affiliate programs and new ways to capture your business.
Once I started at PokerStars, one of the first tasks I had was to review the rake on some micro limit game. I found some Austrian player transferring $5 to hundreds of players. I turned it over to security. “What’s this guy doing? Who is he?” That turns out that was the beginning of PokerStrategy. It was an amazing thing to see what he was doing with our micro players, using our micro stakes as a testing ground to get qualified players onto another site.
Warren: Amazing. Post PokerStars, what are your thoughts of just the affiliate industry as it relates to poker?
Scott: It’s fascinating. We don’t know what the next big thing is going to be. We know some affiliate’s going to come up with some way of capturing the business better than they are capturing it today. I don’t know. It may be PokerStrategy. It may be developing something new. It may be a new site that we’ve never heard. There’s going to be something new in some way to capture the business better than there is today.
Warren: Would you agree there’s a global decline in the poker market?
Scott: With losing the US, of course, there’s a natural bump in the road. Regulated poker for the US is coming in 2012. The sites are just gearing up for Asia. Once they get the Asian countries interested in poker, getting poker TV shows on their local stations, it’s going to take off again.
Warren: Okay. Your advice for affiliates is, it’s cyclical, there’s always going to be new concepts, new ways to maximize even if the market hypothetically continued to decline for a little while, there are still cycles that affiliates can take advantage of. Is that the message?
Scott: Oh, of course. I think it only declined for maybe six months. I don’t think we’re going to have a decline going here forward. It’s going to be increasing.
Warren: How can affiliates better understand and leverage VIP customers with the idea that these players will naturally earn them more?
Scott: Well, they need to educate their customers. A lot of players deposit a single time, lose the money quickly, and never deposit again. The sites don’t want that. The affiliates don’t want that. We need to educate the players on how to play, how to manage their money online. That’s going to increase their total net worth and you’re always looking for their next deposit. You want to create a reason for them to deposit again. You want them to have a good, entertaining time so that they will deposit again.
Warren: On that note, you have tons of experience managing and creating VIP programs for operators. What does running a VIP program have in common with being an affiliate?
Scott: Well, I would say running a site and an affiliate have the exact same thing in common. They’re trying to capture the Internet habit of the player. For example, when I logged onto the computer this morning, I logged onto Google, Facebook, Twitter, and Two Plus Two. Those are my Internet habits. You need to change the Internet habits of your players, if you’re an affiliate, to include you. There’s got to be some reason they have to visit your site today. There has to be some reason they visit your site tomorrow.
The Internet poker site or Internet casino is doing the same thing. That’s the reason they have blogs. That’s the reason they have poker news. That’s the reason they have a replay system where they show the final table of a specific tournament. It’s to entertain you, not necessarily through the means of gambling, but entertain you so that they capture your Internet habit.
Warren: Without naming any names, I guess, we talked about PokerStrategy briefly. Just during your time at PokerStars and just being in the online poker industry, what are some other things that affiliates have done that potentially other mainstream affiliates can look at duplicating with their own strategies to really maximize engagement and stickiness with users?
Scott: I think poker schools are the key. If you can create a poker school where you have the exchange of ideas between players, where you’re teaching them to play better, it’s only going to help your affiliate. You have to have a reason for them to come back tomorrow.
Warren: Based on your experience, again, what type of traffic produced the best quality VIP players for the companies you worked with?
Scott: Again, for poker, it’s the same thing. The qualified player that plays good enough to break even or to make his $50 deposit last seven days. That was what we were trying to do at PokerStars. We were trying to make their deposit last longer than, let’s say, Full Tilt. If some player deposited on Full Tilt and some player deposited on PokerStars, we wanted him to be entertained longer. They need to go after the players that know how to play. Capture that business.
Warren: Just in terms of marketing sources, have you seen that happen best with SEO because of its targeting? Are there other mediums like social media where those types of players exist? Where are the pool of those customers, let’s use today as an example, in your opinion?
Scott: I would target SEO terms. What Card Player’s talking about for example is a lot more important than what Zynga’s talking about. Zynga’s building a different poker model that’s not the same type of player that a Card Player is going after. There are going to be so many different ways. A year from today, we’re going to talk about some affiliate that captured something and everybody’s copying what they’re doing.
Warren: Just jumping onto the operator’s side quickly, which operators are the best at retaining their players and maximizing lifetime values? Why do you think that is?
Scott: It’s impossible to say because not everybody releases their numbers. The numbers they release, we’re not sure what that refers to. Just to give you a quick example, PokerStars is just poker. A player on PokerStars is going to be different than a player that’s on Site A that has poker and a casino. That player may leave for a different reason than the player on PokerStars. It’s like comparing apples and oranges. I believe the VIP program that PokerStars and others have followed is the future. Giving everybody a straight percentage is not beneficial to the site. It’s not beneficial to the affiliate.
Warren: That’s just due to cannibalization or just the shrinkage of margins for both the operator and the affiliate. Why do you think the VIP methodology is the way to go?
Scott: Your rewards are always increasing. It’s like an airline program. If you’re a businessman and you fly American Airlines, you always fly American Airlines. Why do you always fly American Airlines? Your rewards keep increasing if you keep on American Airlines. You could pay the same price on United or some other airline. If you go to Expedia, the price is exactly the same on all the airlines, but you give all your business to that one airline to have your rewards increase.
The same thing works in poker. The same thing works in casino. You need to constantly have a carrot out for the player that, “If you do this, your rewards will be this. If you do this, your rewards will be increased.”
Warren: We know with airlines, for example, free flights is what it’s all about. That’s why we all subscribe to certain travel programs. What types of player promotions do online poker players react best to?
Scott: It depends on which poker player you’re talking about. For example, the play-money player. One of the goals at PokerStars was to give them a challenge that may take weeks, may take months. You give them this challenge and once they complete it they get a reward. The reward at the end is small cash amount. Let’s say $1, $5, or $10. Then they play real money. You would be amazed at how many of them finish the reward. Let’s say they worked six weeks on finishing this challenge and they get their reward. It’s $5 and the $5 lasts them, let’s say, two or three hours. How many of them hit their credit card? That’s an amazing challenge that doesn’t cost very much. Giving people a dollar doesn’t cost very much. If you can switch them over to real money, that’s a huge value to the site.
Warren: Interesting. Going ahead to PokerStars real quick, they’ve run, and still run, many different types of promotions. Any funny stories about a couple of promotions that come to mind?
Scott: Well, my favorite ones were always the ones where someone turned a small amount of money into a large amount of money. To give you a few examples, we had 10-cent sit-and-gos on the real money side and we duplicated that on the play money side. They could play the exact same thing that the 10-cent players were playing, but they were playing for play money. Well, we would look at those players over a three-month period and pick, let’s say, the players that played five of those. If they played five of them, they obviously liked that type of sit-and-go and they respected the challenge. We gave them a dollar so they could play 10 10-cent sit-and-gos. We sent them an e-mail saying, “Here’s a dollar. You can play 10 10-cent sit-and-gos. Have a good time.”
I would look at the rake figures for these players and look at what they did what the dollar. Some of them would play 25-cent sit-and-gos. They’d play something else. The conversion rate was incredible. I think it was a cost of $15 per conversion.
The interesting thing was, we had this girl that paid $300 in rake over three months. I’m like, “How does she play $300 on rake? She never deposited.” I looked at her transfers. She never had a transfer. Then I started looking at her account and she won the first 10-cent sit-and-go she played, so that gave her $8.50. Then she won a $5 sit-and-go. She worked her money up to $1,500 in like three months. It was just amazing.
One of the other ones was we did a $50 promotion where, I don’t remember what the reward was, but we were looking at the players seven days in to see how they were doing. One player had like $5,040 in his account. You always assume that someone transferred in money or something because he only paid $1.50 in rake for the whole time he’d been on the site. I look at it and he played a $1 sit-and-go, he lost, played a $2 sit-and-go, he lost, he played a $3 sit-and-go, and he lost. He played a $5 rebate, multi-table tournament and he won it. He just won the thing outright and had $5,000 in his account and he stopped playing for the day. It’s just amazing.
Warren: Incredible. Looking at these promotions, there’s a variety obviously. As you said, there could be micro-promotions down to the 10-cent level or things that are for the larger plays. How can an affiliate effectively bridge the gap with an operator’s reward program so that the player knows what to expect before they even sign up at a gaming site? You mentioned earlier educating the customer and making sure that they know what they’re getting into. How do you feel affiliates can do that really well where you’ve seen good success out of it?
Scott: They need to visually represent, visually review the rewards programs on the sites that they’re offering to their players. They need something simple that’s one page that’s visual. You can have all the details and you can have everything behind it, but you just need something visual. Most of us are very visual people. We just need to see something. If I do this, I get X. If I do this, I get Y. Just make it a one-page review, visual and simple. You can have the complicated lawyer form behind it with all the details, but just make something visually simple.
Warren: If I’m an affiliate, I get a thousand visitors a day to my poker website. What’s the process? Do I just go to my operator’s site and try to review the awards program? Do I e-mail the affiliate manager? Do I get in touch with a VIP manager at the poker room? What’s the best way to get that information so I that I can go ahead and publish that on my site and educate my customers?
Scott: It’s going to be different with every site. Those people that you mentioned, especially the VIP rewards manager, contact them and tell them what you’re trying to accomplish. Their job is to help you. They’re going to help you. They’re going to want you to succeed so they’re going to give you everything you need.
Warren: Okay. As an affiliate, how can I rank the retention efforts of operators that I send traffic to? Is there any metric that you would watch? How do I know that poker operator A versus B and C has better VIP retention and longevity of the customers versus their competition?
Scott: That’s a tough question because you’re not getting the details from your provider on how long your players are lasting. One of the best ways you can learn anything is to survey your players. Find out what they like, which sites they like, which sites they don’t like, why they don’t like them, and why they like them. The more that you can understand what’s going on with your players and what’s going on inside their head, the better it’s going to be for you in the long run.
Warren: Makes sense. Are there any specific countries which consistently see higher levels of retention, player values, etc., versus others?
Scott: Well, this is actually interesting because I met with a game developer not in the gambling industry at all. He’s in the online gaming industry. We were talking about this specific question. He had the exact same answer I had. Northern Europe, Germany, the numbers are incredible per player. When you go to somewhere like South America, the numbers are dismal. We were just laughing because we were telling the exact same stories but from a different side. He was in the non-gambling, I was in the gambling, but we had the exact same answers. Korea’s just through the roof. Sweden, Norway are through the roof. Brazil, Argentina, not so much.
Warren: Why do you think that is with South America? Everyone talks about that being the next hot market outside of Asia, of course, for online gambling. What do you think the reason is that player values are so low?
Scott: Well, one of the reasons that I’ve never heard talked about anywhere… We would check out the free rolls. We ran free rolls on the weekend for the play money players. If a Brazilian player or a South American player won $20 in that free roll, he transferred money to five friends. It was almost like a joke where we’d go, “Oh, okay, I found a Brazilian player.” We would guess the over/under on how many players he transferred money to. By him transferring money to five or six players, he’s creating six real-money players which all have a very low value. The grinders, the big players in South America are the exact same as the big players in Germany. There are just so many micro players. Plus the other interesting fact about the area is there may not be as much money. That may contribute to that. If there’s not as much money, they can’t be as big a player.
Warren: Is it a market that you would pay attention to, say, over the next five years to see if economics change or the volume of players goes up? Is it something worth paying attention to as an affiliate?
Scott: For South America?
Warren: Yeah.
Scott: I don’t know the answer to what to do with South America. It was a real eye opener speaking to this game developer about he was having the exact same problems in South America and spending a lot of money down there trying to develop the market. The same with PokerStars. We were spending a lot of money trying to develop the market. It just didn’t seem like it was there.
Warren: Okay.
Scott: Not today.
Warren: You’ve mentioned in previous interviews that you believe a new game will dominate poker in years to come. What is that game and why?
Scott: I’ve seen things from Zynga that are incredible if, connected to poker, we can have a new big game. Texas Hold ‘Em has been the largest game in the world for like, what, 20, 30 years? The Internet really hasn’t produced any new game. Everything that can be played on the internet can be played live. It’s not convenient to go to your local casino and play a tournament with a thousand people, like it is online, but you can do pretty much the same thing online as live. What’s going to happen with this next generation of Internet companies getting involved in the industry is they’re going to develop a new poker game that will have some of these aspects of Zynga that will be attractive to females.
I’ve talked with my wife who is the typical female, does not want to play poker, does not care about poker. I’ve talked about her playing these simple concept games where it’s still a skill-based game, it’s not Texas Hold Em, and she says, “Yeah, I’d play that all the time.” I’m thinking if something like that can be developed and women start playing, it’s going to be huge.
Warren: Interesting. Any idea what the name of that game might be?
Scott: I hope it’s VIP Scotty’s Poker Game.
Warren: Well, make sure you make shares available to all of us to purchase when it does come out.
Scott: Sure. I’ll sell you one today. I’d love to get a patent on it. I need someone to work with who can execute the ideas. It’s out there. It will happen. Whether I’ll be involved, I just hope I’m involved with it.
Warren: All right. Fair enough. Last question for you, Scott. Again you’ve been in the industry for a long time. What are some of the biggest secrets you can share with iGaming affiliates just to help them be more successful, especially based on your earnings being inside an operation like PokerStars? What do you think affiliates should really be doing? Just a couple of tips.
Scott: The most important thing is you need to change the Internet habit of your player. If you can get your player visiting your site once a week, once a day, that is of huge value. Look at how fast the Internet is changing. Ten years ago, I visited AOL every day. I visited Yahoo! every day. I visited Poker Pages every day. Now I don’t. Those people lost something that was so valuable to them. In many cases, they don’t even realize they lost it. If you can create that next generation Internet site where there’s a reason that people are compelled to visit it, you are going to dominate the industry.
Warren: I think that’s a sound piece of advice. Alright, Scott, that’s the time we have for today. I really appreciate your time on this interview and the insight you share. I think our audience would definitely agree. If anyone’s interested in getting in touch with Scott after the interview, send an e-mail to [email protected] and we’ll be more than happy to put you in touch.
Thanks for watching everyone and stay tuned for future interviews with iGaming industry leaders. Take care.
Warren: Hey everyone. I’m Warren Jolly with CasinoAffiliatePrograms.com. I want to welcome you to today’s interview with Scott Yeates. Scott is currently the head of Poker Consulting Services with Hybrid Interaction Limited and is the former VIP Manager for PokerStars. Following a successful career as a world-class online poker player, Scott decided to switch sides and now advises leading iGaming brands on best practices for awards programs development. Today, we’ll learn about the importance of promotions, player retention and what Scott believes will happen to online poker, as well as just some general opinion that Scott has on the online poker affiliate industry. Scott, it’s really good to have you and thanks for joining us today.
Scott: Thank you.
Warren: Can you tell us a little bit about your history and how you made the transition from poker player to joining one of the top corporate operators in the world?
Scott: Well, I was in digital printing until after the dot-com bubble burst. I had customers that were doing $50,000 a year with me that were telling me they were going to do $5,000 the next year. My sales manager asked for projections. I told him they were only going to do $5,000. He said, “We’ll put them down for $55,000 and see what happens.” I knew I needed a new career at that point.
About 2003, I resigned my position. I was going to take the summer off to spend with my boys. Lo and behold, Chris Moneymaker won the World Series of Poker and Internet poker exploded. Poker was a hobby of mine, so Internet poker was a natural. That summer things went crazy. I won like $14,000, $15,000. Then I kept winning trips. I kept having an excuse on why I couldn’t get a real job until about 2005.
I was sending e-mails to the top sites that I was playing at, giving them ideas on how they could improve their program. One of the ones I was really e-mailing a lot was PokerStars because I was upset they didn’t have a rakeback system for us in place. It was causing me to spend over 50% of my rake at other sites. I liked PokerStars, but I just couldn’t justify playing there without the rakeback. I think it was February 2005. I got an e-mail back, “Would you like a job?” I was shocked. Six months later, I was working for PokerStars.
Warren: Did you move over to the Isle of Man where they’re based or did you just work them remotely?
Scott: I worked from them from Orange County, California for the first year and then moved to the Isle of Man for four years.
Warren: How was it living on the Isle of Man?
Scott: It’s like living in the past. It’s very old world. It was a great experience. I loved it. It was definitely old world with the stores closing at a certain time, stores only running one shift of employees. It was a big difference from Orange County.
Warren: Yeah, I can imagine. Living in Orange County myself, that’s a big change. You were at PokerStars. What were you doing at PokerStars when you joined?
Scott: Well, we were going to develop the VIP program. That was what I was e-mailing them about. The concept was everyone was giving 25% rakebacks. The thought process was if PokerStars gives 25% rakeback, everybody else will just give 50% rakeback and we’ll be in the same situation we’re in today. We wanted to develop something that was going to be more sticky and more relevant to the players.
Warren: Upon creating that, did you see some good results in terms of the net increase in rake that PokerStars saw from their VIPs?
Scott: Oh, of course. I think January 1, 2006 was the busiest day in PokerStars history until that period. It just took off. It became so huge. With the improvements that we had the following year, it took off even more.
Warren: Got it. You must have had some exposure to affiliates during your tenure there. That’s a big part of our audience watching this interview today. What was your opinion of affiliates before and after you joined PokerStars?
Scott: My first experience with affiliates was PokerPages and Card Player. PokerPages was a site where I could go to my local casino, play a tournament, and the next day I could log on to PokerPages and see the results, how my friends did, and see who won the tournament. I didn’t understand that they were an affiliate but that was what my dealings with them were. They were one of the top poker portals back then. Ten years ago, they were number one, number two with Card Player. You can see how times have changed. Card Player and PokerPages have really gone down the ranks as people have developed new affiliate programs and new ways to capture your business.
Once I started at PokerStars, one of the first tasks I had was to review the rake on some micro limit game. I found some Austrian player transferring $5 to hundreds of players. I turned it over to security. “What’s this guy doing? Who is he?” That turns out that was the beginning of PokerStrategy. It was an amazing thing to see what he was doing with our micro players, using our micro stakes as a testing ground to get qualified players onto another site.
Warren: Amazing. Post PokerStars, what are your thoughts of just the affiliate industry as it relates to poker?
Scott: It’s fascinating. We don’t know what the next big thing is going to be. We know some affiliate’s going to come up with some way of capturing the business better than they are capturing it today. I don’t know. It may be PokerStrategy. It may be developing something new. It may be a new site that we’ve never heard. There’s going to be something new in some way to capture the business better than there is today.
Warren: Would you agree there’s a global decline in the poker market?
Scott: With losing the US, of course, there’s a natural bump in the road. Regulated poker for the US is coming in 2012. The sites are just gearing up for Asia. Once they get the Asian countries interested in poker, getting poker TV shows on their local stations, it’s going to take off again.
Warren: Okay. Your advice for affiliates is, it’s cyclical, there’s always going to be new concepts, new ways to maximize even if the market hypothetically continued to decline for a little while, there are still cycles that affiliates can take advantage of. Is that the message?
Scott: Oh, of course. I think it only declined for maybe six months. I don’t think we’re going to have a decline going here forward. It’s going to be increasing.
Warren: How can affiliates better understand and leverage VIP customers with the idea that these players will naturally earn them more?
Scott: Well, they need to educate their customers. A lot of players deposit a single time, lose the money quickly, and never deposit again. The sites don’t want that. The affiliates don’t want that. We need to educate the players on how to play, how to manage their money online. That’s going to increase their total net worth and you’re always looking for their next deposit. You want to create a reason for them to deposit again. You want them to have a good, entertaining time so that they will deposit again.
Warren: On that note, you have tons of experience managing and creating VIP programs for operators. What does running a VIP program have in common with being an affiliate?
Scott: Well, I would say running a site and an affiliate have the exact same thing in common. They’re trying to capture the Internet habit of the player. For example, when I logged onto the computer this morning, I logged onto Google, Facebook, Twitter, and Two Plus Two. Those are my Internet habits. You need to change the Internet habits of your players, if you’re an affiliate, to include you. There’s got to be some reason they have to visit your site today. There has to be some reason they visit your site tomorrow.
The Internet poker site or Internet casino is doing the same thing. That’s the reason they have blogs. That’s the reason they have poker news. That’s the reason they have a replay system where they show the final table of a specific tournament. It’s to entertain you, not necessarily through the means of gambling, but entertain you so that they capture your Internet habit.
Warren: Without naming any names, I guess, we talked about PokerStrategy briefly. Just during your time at PokerStars and just being in the online poker industry, what are some other things that affiliates have done that potentially other mainstream affiliates can look at duplicating with their own strategies to really maximize engagement and stickiness with users?
Scott: I think poker schools are the key. If you can create a poker school where you have the exchange of ideas between players, where you’re teaching them to play better, it’s only going to help your affiliate. You have to have a reason for them to come back tomorrow.
Warren: Based on your experience, again, what type of traffic produced the best quality VIP players for the companies you worked with?
Scott: Again, for poker, it’s the same thing. The qualified player that plays good enough to break even or to make his $50 deposit last seven days. That was what we were trying to do at PokerStars. We were trying to make their deposit last longer than, let’s say, Full Tilt. If some player deposited on Full Tilt and some player deposited on PokerStars, we wanted him to be entertained longer. They need to go after the players that know how to play. Capture that business.
Warren: Just in terms of marketing sources, have you seen that happen best with SEO because of its targeting? Are there other mediums like social media where those types of players exist? Where are the pool of those customers, let’s use today as an example, in your opinion?
Scott: I would target SEO terms. What Card Player’s talking about for example is a lot more important than what Zynga’s talking about. Zynga’s building a different poker model that’s not the same type of player that a Card Player is going after. There are going to be so many different ways. A year from today, we’re going to talk about some affiliate that captured something and everybody’s copying what they’re doing.
Warren: Just jumping onto the operator’s side quickly, which operators are the best at retaining their players and maximizing lifetime values? Why do you think that is?
Scott: It’s impossible to say because not everybody releases their numbers. The numbers they release, we’re not sure what that refers to. Just to give you a quick example, PokerStars is just poker. A player on PokerStars is going to be different than a player that’s on Site A that has poker and a casino. That player may leave for a different reason than the player on PokerStars. It’s like comparing apples and oranges. I believe the VIP program that PokerStars and others have followed is the future. Giving everybody a straight percentage is not beneficial to the site. It’s not beneficial to the affiliate.
Warren: That’s just due to cannibalization or just the shrinkage of margins for both the operator and the affiliate. Why do you think the VIP methodology is the way to go?
Scott: Your rewards are always increasing. It’s like an airline program. If you’re a businessman and you fly American Airlines, you always fly American Airlines. Why do you always fly American Airlines? Your rewards keep increasing if you keep on American Airlines. You could pay the same price on United or some other airline. If you go to Expedia, the price is exactly the same on all the airlines, but you give all your business to that one airline to have your rewards increase.
The same thing works in poker. The same thing works in casino. You need to constantly have a carrot out for the player that, “If you do this, your rewards will be this. If you do this, your rewards will be increased.”
Warren: We know with airlines, for example, free flights is what it’s all about. That’s why we all subscribe to certain travel programs. What types of player promotions do online poker players react best to?
Scott: It depends on which poker player you’re talking about. For example, the play-money player. One of the goals at PokerStars was to give them a challenge that may take weeks, may take months. You give them this challenge and once they complete it they get a reward. The reward at the end is small cash amount. Let’s say $1, $5, or $10. Then they play real money. You would be amazed at how many of them finish the reward. Let’s say they worked six weeks on finishing this challenge and they get their reward. It’s $5 and the $5 lasts them, let’s say, two or three hours. How many of them hit their credit card? That’s an amazing challenge that doesn’t cost very much. Giving people a dollar doesn’t cost very much. If you can switch them over to real money, that’s a huge value to the site.
Warren: Interesting. Going ahead to PokerStars real quick, they’ve run, and still run, many different types of promotions. Any funny stories about a couple of promotions that come to mind?
Scott: Well, my favorite ones were always the ones where someone turned a small amount of money into a large amount of money. To give you a few examples, we had 10-cent sit-and-gos on the real money side and we duplicated that on the play money side. They could play the exact same thing that the 10-cent players were playing, but they were playing for play money. Well, we would look at those players over a three-month period and pick, let’s say, the players that played five of those. If they played five of them, they obviously liked that type of sit-and-go and they respected the challenge. We gave them a dollar so they could play 10 10-cent sit-and-gos. We sent them an e-mail saying, “Here’s a dollar. You can play 10 10-cent sit-and-gos. Have a good time.”
I would look at the rake figures for these players and look at what they did what the dollar. Some of them would play 25-cent sit-and-gos. They’d play something else. The conversion rate was incredible. I think it was a cost of $15 per conversion.
The interesting thing was, we had this girl that paid $300 in rake over three months. I’m like, “How does she play $300 on rake? She never deposited.” I looked at her transfers. She never had a transfer. Then I started looking at her account and she won the first 10-cent sit-and-go she played, so that gave her $8.50. Then she won a $5 sit-and-go. She worked her money up to $1,500 in like three months. It was just amazing.
One of the other ones was we did a $50 promotion where, I don’t remember what the reward was, but we were looking at the players seven days in to see how they were doing. One player had like $5,040 in his account. You always assume that someone transferred in money or something because he only paid $1.50 in rake for the whole time he’d been on the site. I look at it and he played a $1 sit-and-go, he lost, played a $2 sit-and-go, he lost, he played a $3 sit-and-go, and he lost. He played a $5 rebate, multi-table tournament and he won it. He just won the thing outright and had $5,000 in his account and he stopped playing for the day. It’s just amazing.
Warren: Incredible. Looking at these promotions, there’s a variety obviously. As you said, there could be micro-promotions down to the 10-cent level or things that are for the larger plays. How can an affiliate effectively bridge the gap with an operator’s reward program so that the player knows what to expect before they even sign up at a gaming site? You mentioned earlier educating the customer and making sure that they know what they’re getting into. How do you feel affiliates can do that really well where you’ve seen good success out of it?
Scott: They need to visually represent, visually review the rewards programs on the sites that they’re offering to their players. They need something simple that’s one page that’s visual. You can have all the details and you can have everything behind it, but you just need something visual. Most of us are very visual people. We just need to see something. If I do this, I get X. If I do this, I get Y. Just make it a one-page review, visual and simple. You can have the complicated lawyer form behind it with all the details, but just make something visually simple.
Warren: If I’m an affiliate, I get a thousand visitors a day to my poker website. What’s the process? Do I just go to my operator’s site and try to review the awards program? Do I e-mail the affiliate manager? Do I get in touch with a VIP manager at the poker room? What’s the best way to get that information so I that I can go ahead and publish that on my site and educate my customers?
Scott: It’s going to be different with every site. Those people that you mentioned, especially the VIP rewards manager, contact them and tell them what you’re trying to accomplish. Their job is to help you. They’re going to help you. They’re going to want you to succeed so they’re going to give you everything you need.
Warren: Okay. As an affiliate, how can I rank the retention efforts of operators that I send traffic to? Is there any metric that you would watch? How do I know that poker operator A versus B and C has better VIP retention and longevity of the customers versus their competition?
Scott: That’s a tough question because you’re not getting the details from your provider on how long your players are lasting. One of the best ways you can learn anything is to survey your players. Find out what they like, which sites they like, which sites they don’t like, why they don’t like them, and why they like them. The more that you can understand what’s going on with your players and what’s going on inside their head, the better it’s going to be for you in the long run.
Warren: Makes sense. Are there any specific countries which consistently see higher levels of retention, player values, etc., versus others?
Scott: Well, this is actually interesting because I met with a game developer not in the gambling industry at all. He’s in the online gaming industry. We were talking about this specific question. He had the exact same answer I had. Northern Europe, Germany, the numbers are incredible per player. When you go to somewhere like South America, the numbers are dismal. We were just laughing because we were telling the exact same stories but from a different side. He was in the non-gambling, I was in the gambling, but we had the exact same answers. Korea’s just through the roof. Sweden, Norway are through the roof. Brazil, Argentina, not so much.
Warren: Why do you think that is with South America? Everyone talks about that being the next hot market outside of Asia, of course, for online gambling. What do you think the reason is that player values are so low?
Scott: Well, one of the reasons that I’ve never heard talked about anywhere… We would check out the free rolls. We ran free rolls on the weekend for the play money players. If a Brazilian player or a South American player won $20 in that free roll, he transferred money to five friends. It was almost like a joke where we’d go, “Oh, okay, I found a Brazilian player.” We would guess the over/under on how many players he transferred money to. By him transferring money to five or six players, he’s creating six real-money players which all have a very low value. The grinders, the big players in South America are the exact same as the big players in Germany. There are just so many micro players. Plus the other interesting fact about the area is there may not be as much money. That may contribute to that. If there’s not as much money, they can’t be as big a player.
Warren: Is it a market that you would pay attention to, say, over the next five years to see if economics change or the volume of players goes up? Is it something worth paying attention to as an affiliate?
Scott: For South America?
Warren: Yeah.
Scott: I don’t know the answer to what to do with South America. It was a real eye opener speaking to this game developer about he was having the exact same problems in South America and spending a lot of money down there trying to develop the market. The same with PokerStars. We were spending a lot of money trying to develop the market. It just didn’t seem like it was there.
Warren: Okay.
Scott: Not today.
Warren: You’ve mentioned in previous interviews that you believe a new game will dominate poker in years to come. What is that game and why?
Scott: I’ve seen things from Zynga that are incredible if, connected to poker, we can have a new big game. Texas Hold ‘Em has been the largest game in the world for like, what, 20, 30 years? The Internet really hasn’t produced any new game. Everything that can be played on the internet can be played live. It’s not convenient to go to your local casino and play a tournament with a thousand people, like it is online, but you can do pretty much the same thing online as live. What’s going to happen with this next generation of Internet companies getting involved in the industry is they’re going to develop a new poker game that will have some of these aspects of Zynga that will be attractive to females.
I’ve talked with my wife who is the typical female, does not want to play poker, does not care about poker. I’ve talked about her playing these simple concept games where it’s still a skill-based game, it’s not Texas Hold Em, and she says, “Yeah, I’d play that all the time.” I’m thinking if something like that can be developed and women start playing, it’s going to be huge.
Warren: Interesting. Any idea what the name of that game might be?
Scott: I hope it’s VIP Scotty’s Poker Game.
Warren: Well, make sure you make shares available to all of us to purchase when it does come out.
Scott: Sure. I’ll sell you one today. I’d love to get a patent on it. I need someone to work with who can execute the ideas. It’s out there. It will happen. Whether I’ll be involved, I just hope I’m involved with it.
Warren: All right. Fair enough. Last question for you, Scott. Again you’ve been in the industry for a long time. What are some of the biggest secrets you can share with iGaming affiliates just to help them be more successful, especially based on your earnings being inside an operation like PokerStars? What do you think affiliates should really be doing? Just a couple of tips.
Scott: The most important thing is you need to change the Internet habit of your player. If you can get your player visiting your site once a week, once a day, that is of huge value. Look at how fast the Internet is changing. Ten years ago, I visited AOL every day. I visited Yahoo! every day. I visited Poker Pages every day. Now I don’t. Those people lost something that was so valuable to them. In many cases, they don’t even realize they lost it. If you can create that next generation Internet site where there’s a reason that people are compelled to visit it, you are going to dominate the industry.
Warren: I think that’s a sound piece of advice. Alright, Scott, that’s the time we have for today. I really appreciate your time on this interview and the insight you share. I think our audience would definitely agree. If anyone’s interested in getting in touch with Scott after the interview, send an e-mail to [email protected] and we’ll be more than happy to put you in touch.
Thanks for watching everyone and stay tuned for future interviews with iGaming industry leaders. Take care.