OKR: The woke version of KPI

We consultants lead an ultra-modern lifestyle, very 2.0. Stories on LinkedIn? Sure. Migrating all workspaces into Notion? Did it yesterday. Following James Charles? Hi sisters! So why are we still hung up on the same old KPI methodology?

Well, for starters, it has worked pretty well so far, which is quite a decent argument. I mean, we do work in betting, so we all know that you “never change a winning team.” Unless, of course, you are a Dutch regulator; in that case, you never do anything anyway.  

Going back to Key Performance Indicators, they are simple and brilliant: you decide which activities are crucial to your business success, set desired targets, and monitor progress along the way. Online casinos will be closely following deposits and NGR over time (as well as reinvestment or bonuses out of GGR, for example, and additional ratios as supporting indicators). Social gaming operators are fixated on in-app purchases (as well as retention, DAU, and ARPDAU as secondary KPIs). State-owned retail lotteries follow the clock until it’s 1 p.m., and that’s it. At this point, they are still old white males who are waiting anxiously for someone to develop a vaccination against this new global pandemic. They just don’t get TikTok.  

So, why on earth is there a need to change such a successful methodology? Because we are the most advanced online marketing industry, that’s why. E-commerce has carts? We have cashiers. Online stores have same-day delivery? We have real-time everything. They hire sales people? Please… we have Affiliate Account Managers. And they are tall and blonde, so go sniff some printed books’ dust, Jeff Bezos.  

Since we are always on the lookout for the most advanced technologies, when it comes to management practices, where can we go from here? Say hello to OKRs: Objectives and Key Results. As per Andy Grove, who developed this methodology during his time as Intel’s CEO, this is a “goal-setting framework where the objective is the direction toward which the organization needs to be in the medium term.” Let’s break that down into (A) terms that aren’t buzzwords, and (B) something we can actually work with:

Setting the objective is a process in which you align the company and your team's goals. Such an objective should be ambitious, qualitative, and time-bound. It’s not your regular “we need a 75% MoM Retention Rate” bark from the CMO (yeah, right—because our promos are as sexy as Meiko Shiraki). Instead, expect something like “Improve our casino brand loyalty” as your quarterly objective.

What can you do with such a vague request? Set some Key Results to support it. In the OKR framework, each O has 3–5 KRs, and they must be measurable, quantitative, and value-based. Here we go:

• Ensure 40%+ of our First-Time Depositors (FTDs) remain active in the following month.

• Dedicate at least half of our bonus budget to segmented promos for constant 3-month active players.

• Reach out over the phone to all players in last month’s top 20% of depositors who haven’t deposited yet after the current month’s 10th day.

What do we have here? All KRs are easily measured, and the value is quite clear (generating further deposits from last month’s active players is… well, the basis of your job, honestly). Also, note that the requirement was to boost loyalty, and here we went from FTDs to last month’s top players and through to 3-month actives. Targeting these groups (if done successfully) is bound to increase repeat visits, and with the right offer (budget) and using the right channel (even phones), increases their likelihood to stick around.  

Now you just wait a minute, my good sir! All you basically have here is a bunch of KPIs in disguise!! Surprisingly enough, this claim made using a noble British accent, is kind of true. But not entirely correct. KRs essentially encompass KPIs, that’s clear to see. But (1) not all of your KRs will include numbers (for example, “reach out over the phone” is measurable, yet in a binary manner), and (2) KPIs are straightforward metrics, whereas KRs are derived from the Objective; when you completed all your KRs, this should give you confidence that your Objective is achieved. In fact, the Objective will have a sliding percentage scale that progresses as KRs numbers are met through the quarter. It’s like gamifying your work processes and reporting!

Let’s run a quick recap: An Objective is the direction we want to go in. The metrics (KRs, KPIs) will help us monitor how we are performing. Roughly, that is the main difference between the two methodologies—the OKR framework also has a goal on the company level that is set first and shared between the teams so they can set their KRs accordingly. Obviously, as with our example above, brand loyalty can (and should) be supported not only by CRM but also by additional marketing functions (acquisition, social media, etc.) and definitely on the product level as well.

With OKRs, you define an area for improvement or a problem to be solved. KPIs are used to set revenue targets, growth, or performance expectations.

Do we actually need it? It’s the hot new kid on the block, and all posh start-ups brag about “adopting what made Google big” (sure, it was OKRs, not PPC for adult-related keywords). So what about our dear iGaming CRM people, with their flawless complexion and firm cheeks (all four of them)? I somehow feel that such a methodology is better suited for large organizations (let’s say, 100–200 employees or more) that are trying to become more efficient by working quarterly instead of annually. Most B2C operators in our industry have only dozens of employees who monitor activity as it happens. An old joke used to say that strategy in iGaming is thinking of your weekend plans already on Wednesday.

Our world is moving so fast, and the competition never stops challenging us… Can we really afford to be patient enough for a process to last a full 3-month period? Only this Christmas we saw enough advent calendars being updated on the go with last-minute adjustments due to positive/negative results of the first few days. With such a hectic vibe, setting a retention rate objective for Q2 next year is as practical as gazing at photos from a Caribbean vacation on Instagram... during COVID. Sure, it looks (super) nice, but if anything, it disturbs your work rather than optimizing it.

That said, maybe we should take the leap, perform a mental switch, and allow ourselves to also focus on long-term projects with top-level goals. Eager to hear your thoughts on how this could be applied in our little shop of instant ROI.