Dear members,
as most of you know the regular players who play a lot and "generate" a lot of rake at the tables were in the past seen as the most valuable customers (VIPs) to an online poker room and were getting the biggest chunk of a poker room's marketing and retention budget.
In recent years poker rooms have shifted their budgets more towards recreational players. Recreational players are nowadays getting better bonus offers and more money goes into “recreational” promotions like first deposit freerolls, while VIP reward systems are being reduced. Affiliates are paid less for their existing VIP player base and are incentivised to bring new players into the poker eco system.
In light of these changes, we as an affiliate that ultimately depends on what poker operators are willing to pay for certain player groups came to a point where we have to reconsider our business plan towards Black Member events. Our Black Member events will phase out during 2015.
We understand that this change will be perceived negatively by some of you guys, who have always been our most loyal users. We would have never stopped the Black Member events, if it was not necessary. We could possibly end this post here, as we understand there is nothing we could say to prevent the frustration related to this decision. You all have the right to be upset and vent your frustration in this thread.
However, for those of you who were actively interested in the business reasoning behind these changes, we have prepared further explanations and would be happy to offer you a personal consultation as well.
Who are valuable customers?
Let's look at the poker environment in a simplified chart:
For many years the poker industry has been working under false assumptions about how poker business works. Poker rooms thought that valuable customers were only the ones, who turned the most money into rake at the tables (VIP players). However, it cannot only be about the rake generated at the tables. The critical consideration is - who actually pays the rake?
In poker the players, who deposit more than they withdraw, are very valuable customers, because they fund the whole system with their deposits. Online poker rooms need to make sure there are enough depositing players, because:
- Someone needs to pay the rake and pay the winnings of the winners.
- It is amount of deposits that determines the size of a poker room and sustainability of its games.
That's why nowadays poker rooms look also at “net-loss“ (how much player lost or won at the tables) to identify the real value of every customer. Recreational players are in reality worth much more than the rake they generate at the tables and VIPs (players who are usually winning) are worth less than the rake they generate at the tables, because in reality all the rake is financed (paid) by the recreational players, while VIPs only help to "turn" deposits into rake. As a result, there is a shift in how marketing budgets have to be allocated so that the environment works.
Poker has become harder also due to the fact that poker rooms were focusing a lot on giving VIPs incentive to play more and didn't focus enough on new / recreational players. In poker, this problem is known as the “poker ecology gap”, or a “lack of depositing players”.
Poker rooms, affiliates and players have a common goal: sustainability of poker games. It is necessary to set the reward system right, so that the eco system can become more balanced.
Poker works the same way as any other business, it is all about who spends money on the product.
Affiliates get paid less for VIPs
The above shift in how players are valued impacts also how much affiliates get paid by poker rooms. All affiliates (including PokerStrategy.com) are nowadays getting paid less for VIPs.
As a result, we need to make some unpopular decisions. We would love if it wasn't the case but there is no other (sustainable) way.
What is going to change in Black Member events?
Our Black Member events will phase out over the course of 2015.
All the previously announced events will take place according to standard procedures. All remaining entitlements such as unused tickets will enter a $100.000 raffle. Please refer to FAQ in following post for all the details. Please also read the latest update: Update to phasing out of Black Member Events
We understand this is very bad news for many of you. Unfortunately, balancing the eco system is an inevitable step for sustainability of online poker in the future.
PokerStrategy.com vision
PokerStrategy.com is investing into content, services and promotions for all of our users. We will continue doing that. Our goal is to make sure that:
- PokerStrategy.com remains a great platform for regular players, which allows them to learn advanced poker strategies. Despite the fact that we get paid less for the winners, it is clear that successful poker players help to popularise poker games, with their cool lifestyle and successes that inspire other players.
- We are very beginner friendly, so that recreational players can learn and enjoy basics of poker on our website. As well as receive a good portion of entertainment and enjoy additional content and services on our website. We bring a lot of new players into poker via our free money offers.
We believe we all share a common goal, which is to make poker become a fun game (again) that allows recreational players to enjoy the poker experience, while allowing the ambitious and well educated players to make sustainable profit from the games.
Poker in its current state is not appealing to a broad mass of players, because the games are tougher, new players have less "success moments" and there were not enough innovative ideas (like Spin & Go tournaments) to make it more fun to play for recreational players. In order to change this and create the upside for players, poker rooms and affiliates alike, there are many steps to take. The poker industry has to improve the player experience by making the product more beginner friendly and creating promotions that are appealing to the recreational players and make them spend their “entertainment budget” on poker. At the end of the day this is the money that ensures sustainable winnings for the winning players. The most successful live poker players realised this and treat, for example, rich businessmen respectfully, regardless of their skill level, because they know how important this player group is for them. Online poker players should be similarly respectful to not scare away the ones that play poker for fun, as profits of the winners will always rely on activity of recreational players.
In the past months, you may have seen PokerStrategy.com bringing a balanced mixture of serious learning content, bankroll building challenges as well as entertaining comics, news and generally a good mix between education and entertainment. This continues being our focus and we will do our best to improve these offers in 2015. We plan to have both a polarised and balanced range at the same time – focusing on VIP players as well as recreational players (well, some of our entertaining content is enjoyed by VIPs, too), while at the same time making sure there are enough interesting things for everyone.
In case there are more questions about the above, we will answer them in this thread. If you are a Black Member, we also offer you a personal Skype consultation about this topic. You already received an email with our Skype details, or you can also write here "contact me" and we will get in touch via private message.
Regards,
Marta
