How the TAB was dragged into the customer age

Tabcorp has leveraged the massive amounts of data gathered through its loyalty scheme to drive tactical marketing campaigns

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.

Video: ADMA Global Forum 2013 round-up

"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.

Follow CMO on Twitter: @CMOAustralia, take part in the CMO Australia conversation on LinkedIn: CMO Australia, or join us on Facebook: https://www.facebook.com/CMOAustralia

Signup to CMO’s new email newsletter to receive your weekly dose of targeted content for the modern marketing chief.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Blog Posts

Building a human-curated brand

If the FANG (Facebook, Amazon, Netflix, Google) sector and their measured worth are the final argument for the successful 21st Century model, then they are beyond reproach. Fine-tuning masses of algorithms to reduce human touchpoints and deliver wild returns to investors—all with workforces infinitesimally small compared to the giants of the 20th Century—has been proven out.

Will Smith

Co-founder and head of new markets, The Plum Guide

Sustainability trends brands can expect in 2020

​Marketers have made strides this year in sustainability with the number of brands rallying behind the Not Business As Usual alliance for action against climate change being a sign of the times. While sustainability efforts have gained momentum this year, 2020 is shaping up to be the year brands are really held accountable for their work in this area.

Ben King

CSR manager & sustainability expert, Finder

The trouble with Scotty from Marketing

As a Marketer, the ‘Scotty from Marketing’ meme troubles me.

Natalie Robinson

Director of marketing and communications, Melbourne Polytechnic

If you think it can benefit both consumer and seller then it would be great

Simon Bird

Why Ford is counting on the Internet of Things to drive customer engagement

Read more

It's a good idea. Customers really should control their data. Now I understand why it's important.

Elvin Huntsberry

Salesforce CMO: Modern marketers have an obligation to give customers control of their data

Read more

Instagram changes algorithms every time you get used to them. It really pisses me off. What else pisses me off? The fact that Instagram d...

Nickwood

Instagram loses the like in Australia; industry reacts positively

Read more

I tried www.analisa.io to see my Instagram Insight

Dina Rahmawati

7 marketing technology predictions for 2016

Read more

The saying is pretty tongue in cheek. It's not saying that marketers are bad people, nor that they don't take themselves seriously. There...

LYF Solutions

The trouble with Scotty from Marketing - The CMO view - CMO Australia

Read more

Latest Podcast

More podcasts

Sign in