Betting on profit: Customer Liftetime Value in the sportbetting industry

Simon Thomsen

Student thesis: Diploma thesis

Abstract

This thesis focuses on Customer Lifetime Value, and how you can use it, to maximize profit. Several companies have customer relationships that are not profitable. These Customers are considered a cost, and companies attempt to eliminate them, to maximize their profit. Instead of focusing on eliminating these customers, companies should focus on developing their product to fit these customer’s needs, and convert them to profitable customers. Is it possible to convert non- profitable customers to profitable by re-designing a product, without removing the needs of existing profitable customers? I will try to answer this question by examining a phenomenon that exists in the sportsbetting industry. Skilled betters will be limited Betting operators are trying to maximize their profit by limiting betters with a certain betting pattern. This pattern will give the betters profit on long term. Betting operators are limiting the better’s stakes to a minimum, which makes it impossible to generate the same profit as before. I will in this thesis try to develop a product targeted to limited betters, without removing the needs of the losing customers. How can you as a betting operator benefit from the fact that limited betters have a higher betting turnover compared to losing players? Can I make a business model where you as a betting operator can have a profitable business by converting these customers from cost to revenue? To answer these questions, I have examined how the betting industry works from a betting operator and better’s perspective and calculated Customer Lifetime Value. The conclusion became a new betting product and a solution to the problem.

EducationsGraduate Diploma in Supply Chain Management, (Diploma Programme) Final Thesis
LanguageDanish
Publication date2018
Number of pages78
SupervisorsThomas Frandsen