It might seem counterintuitive to talk about the pitfalls of a growing vertical, as we have come to believe that growth is good, particularly for anyone trying to make their fortune as an entrepreneur or business person.
⚠️ However, whilst a booming vertical is what everyone wants, some bear traps need to be avoided, and it is good to be aware of what could go wrong.
When we discuss verticals, particularly in the iGaming business, we refer to niche markets within the sector. Online casino gambling is all about verticals, whether that is online slots, live dealer gaming, casino classics, or free-to-play social casino games.
We sat down with the experts at Casino.org to find out what can go wrong, and (much more importantly what goes right, in growing verticals.
So first we asked the straightforward question, well, it seemed simple at the time,
“What is a vertical?”
Content editor, Lewis Crane, explained,
“A vertical is a specific market that focuses on a particular niche. Businesses that grow through verticals centre their products and marketing efforts around the needs of that specific vertical to attract a targeted customer base.”
One of the biggest pitfalls is an overcrowded market, where all companies compete for the same narrow segment of the market.
“Think about it like a skyscraper, everyone wants to build the tallest tower; however, there are always new developers coming along and trying to lay down foundations close to existing ones.”
“Horizontal businesses are more generalist in their approach and offer something for everyone. In-person businesses often have this approach – a community store, for example, needs to have a broad range of products.”
“However, online businesses can afford to be much more specific in what they are offering.”
“The problem is that they do not stand out adequately from the crowd. Whilst online gambling is a growing and booming business in the UK, there is still a limited pool of people who are interested in this form of entertainment.”
Lewis told us,
“The biggest pitfall we find in online gambling companies that we review is that they do not keep up with new and emerging trends. It is not good enough to just pump out the same games as every other operator; great online casinos offer innovation, fun, and are great safe places for customers to spend some time.”
“Equally, it is essential that operators do not rush a product to market and then launch something that is all glitchy or unsafe. As the old saying goes, You only get one chance to make a first impression!”
His colleague, Adam Volz, looks particularly at new casinos based in the UK and explains that he has seen “the good, the bad, and the ugly” in the online casino vertical. He told us,
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“One of the problems can be that people bookmark a page, fall in love with a game, and then just overplay it. If companies become overly reliant on a relatively small market segment, when people start to drift to a competitor's site, it can be difficult to prevent a trickle becoming a deluge, and before the operator knows it, they have no customers.”
“Going back to the tower block analogy, the biggest pitfall of a growing vertical can be too narrow a base and not deep enough foundations”.
🕵️♂️ Adam, who keeps a very keen eye on everything happening in the UK online casino market, knows that successful operators always have a weather eye on the future and plans for new promotions, games, and functionality in the future.
“The online casino gambling market is constantly evolving. The role of social media influencers cannot be understated either. If someone's stream takes off and it is your game that is being played, an online casino can see a massive uptick in players coming to their site to try and get a piece of the action.”
“There are two potential dangers here.
- The first concern is that if it becomes too popular, it could crash the site, resulting in the platform losing a significant amount of potential revenue.
- The second is that the platform thinks that what is a blip is actually a trend and does not realise that those new players (and income sources) could leave as quickly as they arrived.
At Casino.org, we are always on the lookout for platforms that offer a balance between stable and exciting, safe and innovative, secure and cutting-edge. Whilst growing your vertical requires scientific business acumen, there is also an art to getting the balance right. Great platforms go out of their way to attract and keep customers.”
“It is all too easy, when growing a vertical, to expend so much energy on attracting new customers that you forget about existing ones. This is what is known as churn, and successful online gambling companies strive to minimise it. When they get a registered customer, they do whatever it takes to hang on to them.”
As well as making sure there are always exciting and rewarding games to play, bonuses and promotions are key to growing and maintaining vertical growth. Bonuses are standard fare in the online world, and people want to feel that they are getting something extra.
🎁 “This could be deposit match bonuses for new sign-ups or VIP and loyalty schemes for regular customers. Some online casinos even offer free play promotions, allowing players to win real money without making an initial deposit.”
He concludes,
“A potential pitfall for any online operator is that players hop around between sites, cashing in on bonuses without making any meaningful deposits or commitments.”
“Therefore, the numbers have to be run to check for risks and analyse the potential gains. What operators have to remember is that whilst they might be in the business of gambling, they should not be gambling with their business.”
Final thoughts
Achieving long-term growth within an expanding vertical demands more than tapping into market growth. It necessitates balancing change through stability, steering clear of market saturation, and keeping sight of both acquisition as well as customer retention.
Online casinos indicate that long-term growth hinges on comprehension of these traps whilst also remaining malleable to dynamic trends.
🎯 It is businesses which invest in true foundations, strategically differentiate their product offerings, and keep the customer experience paramount that set themselves up for long-term gains rather than short-term popularity bumps.
At the very highest leverage points, the secret lies in creating a strong business framework that holds up to market shifts whilst still being positioned to offer value to the demanding customer base.
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