Can't say it better myself.Content marketing definitely peaked this year, mainly because of the updates and algorithms dished out by Goog...
For a long time, Tabcorp could enjoy the kind of complacency former government monopolies often feel entitled to: The luxurious lifestyle of the incumbent. However, in the close to two decades since the Victorian state government privatised the bookmaking giant, the landscape of the gambling industry has changed and that has transformed the way it views its customers.
Profound regulatory changes in 2008 opened up the gambling trade in Australia as well as advertising opportunities across markets. At the same time, new customer interaction channels such as digital and more recently, mobile, have allowed a new crop of nimble competitors to flourish.
Tabcorp's annual report for the last financial year gives an inkling of the customer behavioural changes having a profound impact on the company and industry. While turnover at Tabcorp's NSW retail business dropped by 1.1 per cent and in Victoria by 4.7 per cent, digital wagering turnover spiked by 13.6 per cent – 43 per cent of which was from mobile.
Oliver Watkins, head of CRM and customer analytics at Tabcorp, said the effect of these transformational shifts has seen the company "dragged into the customer age."
"And dragged is very important because it didn't run off into it," Watkins, speaking at last week's ADMA Global Forum 2013 in Sydney, added.
Tabcorp has an extremely complex channel landscape, Watkins said. The company operates multiple brands alongside the iconic TAB brand, and in 2008 its business included casinos and poker machines as well as its core wagering business.
Tabcorp's operations now stretch across on-course betting, phone betting, Internet and mobile betting, and operations at pubs, clubs, RSLs, agencies and hotels. Complicating the picture are the multiple communication channels Tabcorp markets its products through including above the line, direct mail, email, SMS and phone.
"If you look at just five brands by six channels operating conservatively through five comms channels – that's 150 strategies and 150 teams, occasionally talking to each other if forced to, and it means you're as fragmented as you could probably possibly be," Watkins said.
Loyalty just does not get you loyalty. Loyalty gets you data. Data gets you loyalty. But you've got to use it.
Tabcorp had the advantage of scale, but after the 2008 industry changes competition was fierce. Customers in former TAB stronghold states across Australia’s east coast could suddenly place their wagers with Sportingbet or Centrebet. At the same time, Tabcorp spun-off its casinos and lost its pokies business due to regulatory changes.
"That focuses the mind... the party by this point is well and truly over," Watkins said.
Marketing spend in the industry started exploding in 2008, and by 2012 TAB was only spending a minority of it. One of the challenges, however, was unique value proposition. Because the product in the gambling industry essentially amounts to numbers, it's hard for companies to differentiate on product.
"Even worse," Watkins said, "our competitors are nimble and they're online. And we have a big retail infrastructure to support. So the only thing you could possibly make a decision on rationally is price. The odds. And we've got this big infrastructure so we inherently can never be best price.
"We're in a pretty sticky situation at this point. Yes we've got scale, but we've lost all our ways to really leverage that and we have a fragmented channel landscape."
Faced with this challenge, the conclusion was simple, Watkins said: Tabcorp embarked on a customer-centric journey, which still continues today, investing heavily in CRM and analytics.
"TAB believes that by leveraging CRM, [a] customer-centric journey, you can basically take the fight back to the corporates," Watkins said.
Tabcorp is using the massive amounts of data it gathers, through channels such as its loyalty scheme, to grow customer lifetime value. The company is leveraging that increased profitability "to reinvest in targeted acquisition marketing and therefore put the corporates under more and more pressure," Watkins said.
Loyalty programs can sometimes be treated like a "magic equation", Watkins said: Give a customer a loyalty card and they're more loyal. But, "the world doesn't work like that".
"Loyalty just does not get you loyalty," he said. "Loyalty gets you data. Data gets you loyalty. But you've got to use it.
"It turns out at, at TAB, we have a shitload of loyalty.”
Tabcorp's loyalty program is run in the same way as a major airline's loyalty program and Australia's biggest bank's loyalty program, Watkins claimed.
"And in that data centre they have, combined, 3 per cent of the data. And we have 97 per cent of the data."
The TAB Rewards scheme doesn't require people to register their name and personal details, as the focus is not on just one individual. The key to Tabcorp's customer-centric journey has been to leverage this data for tactical marketing and operational insights. In August, the company established a CRM team – just in time for the September to November period when the majority of wagers are placed, during footy finals and spring racing season.
Tabcorp was able to go from having no CRM leveraging its massive amounts of loyalty data to being able to experiment with targeted campaigns in just a month and a half, Watkins said, with the company choosing to invest in SDL Intelligent Marketing Suite. Tabcorp embarked on a period of experimentation, testing campaigns to see what would work. "It turned out that most of it worked," Watkins said.
The strategy of the CRM loyalty team is to collect as much customer data as possible, employ predictive analytics, set goals and strategies, test and monitor everything and prove to the business that it's delivering sustainable profits.
"So at this point we're saying to the business, 'Okay we've done this, we've invested in this, but there is a continual ROI at every step’," Watkins added.