by Sudhir H. Kale, Ph.D.*
WANT YOUR ON-LINE GAMING VENTURE TO PROSPER? PUT ‘TRUST’ IN IT TO GROW!
By Sudhir H. Kale, Ph.D.*
Men are able to trust one another, knowing the exact degree of dishonesty they are entitled to expect.
--Stephen Leacock (1869 - 1944), Canadian author and educator
Despite the overall downturn in Dot.coms, Internet gaming is one of the few on-line businesses that shows no sign of looking back. From the time when the first on-line casino went live in 1995, the ranks of e-gaming web sites have swollen exponentially. Bear Stearns, the investment banker, reports that there were between 600-700 Internet betting sites in the year 2000. This number doubled to between 1,200-1,400 in 2001. A study by Data Monitor indicates that on-line and iTV gambling will balloon to a £15bn industry by 2005 in the Europe and US alone. Companies such as Crown Games are expanding into Asian markets to capitalize on the gambling craze in these countries. Making on-line gaming available to previously inaccessible markets can only further accelerate growth in this nascent industry. The bottom-line success of many gaming ventures has dispelled the idea that it is nearly impossible to make a profit with on-line ventures. Ladbrokes, one of the UK’s biggest and oldest players in the betting business got into the on-line game just two years ago. The company turned a profit last July and currently boasts a registered base of more than 250,000 customers from 170 countries.
Research data on Internet customers in general and on net gamblers in particular suggest that trust is the single-most important criterion driving on-line shopping. Advertising Age reports a 1998 study by Maddox suggesting that the number one reason given by those who had not made purchases on-line was security. The 2000 report on on-line gambling and lotteries produced by www.consult.com.au states that while ten percent of all net users are potentially interested in gambling on-line, eight out of ten of those interested are concerned with security, fraud, and download times. Similar findings emerge from research by The River City Gambler Monitor in which 78% of those surveyed ranked “security of financial transactions and credit card numbers” as the single-most important criterion determining punter patronage.
While trust is an important determinant of any customer relationship, its antecedents and manifestations are quite different within the Internet domain. In order to proffer a gaming website with trustworthiness, we need to first understand what trust is and how people formulate their opinions of trustworthiness.
Trust, as defined by Blau (1964) and Rotter (1967), is “the belief that a party’s word or promise is reliable and a party will fulfill its obligations in an exchange relationship.” Similarly, Morgan and Hunt (1994) define trust as “one party having confidence in an exchange partner’s reliability and integrity.” Research by Reichfield (1994) and Morgan and Hunt (1994) indicates that trust is a key component in the development of customer relationships. Other studies conducted in ‘brick and mortar’ contexts suggest that three variables enhance trust in a relationship: personal integrity, upheld promises, and foregone opportunistic behavior (cf. Frazier, Spekman, and O’Neal, 1988). A study of salespeople by Beatty, et al. (1996) indicates that high performing salespeople place more emphasis on establishing trust between themselves and their clients than do lower performing salespeople. As evidenced by the findings of these and other studies, trust is largely based on past experience of the buyer. The extant literature fails to examine the factors that imply trustworthiness of a seller prior to purchase. These factors signaling a priori trust are the ones driving trust in Internet gaming. Unlike ‘experience-based’ trust factors discussed in past research, trust factors as they relate to on-line gaming will be largely ‘cue-based’ (cf. Warrington, Abgrab, and Caldwell, 1999). A trust cue “would include any outward symbol that exists prior to the exchange which would indicate to a customer that a marketer is trustworthy.” It is imperative that we understand the determinants of cue-based trust. Warrington et al. observe that trust cues in the realm of the Internet consist of name recognition, professional appearance of websites, privacy and security policies, availability of company address and contact information, and references and testimonials from existing customers. We will briefly explore each of these trust cues in order to comprehend what they mean for the Internet gaming business.
Internet gamblers, like the rest of us, feel comfortable dealing with a company that they are familiar with. This familiarity factor bestows a natural advantage to providers who have a physical facility and who have traditionally established themselves in the gaming business. Companies such as Lasseters, Crown Games, and Ladbrokes, therefore, have a clear advantage when it comes to reputation-based trust. Tatts.com, the digital brand of Tattersals, aggressively promotes its “hundred years of tradition” in an effort to effect customer trust and confidence. Internet casinos -- lacking in physical presence and without established reputation -- would have to try harder to gain name recognition. The primary means of doing so is to engage in advertising through traditional media such as magazines, newspapers, and TV.
Mass advertising improves the E-provider’s visibility and reputation in the marketplace, even among non-Internet users. Shopping.com, Amazon.com, and E-trade advertise in newspapers such as the New York Times and USA Today, while ads for HotJobs and Ebay have appeared on network television. In fact, E-commerce firms such as Monster.com, HotJobs.com, and E-trade bought nearly a quarter of the advertising time on the first Super Bowl of the new millennium. Internet casinos without a corresponding offline retail site will be well advised to employ traditional media campaigns if they are to improve their name recognition and thus enhance the comfort levels of their target market. Using credible celebrities in brand names or as spokespeople also enhances name recognition (e.g., Kenny Rogers Casino).
Proponents of NLP – the art and science of persuasive communication-- have long known that perceived similarity with another individual enhances the level of trust toward that individual. Communication is the medium we all use to establish similarity. Communication involves not just the words and phrases we use to convey meaning, but also our manner of attire, body language, and a host of silent languages (cf. Hall 1977). In the web-world, the primary mode of communication is the website itself. Companies wanting to succeed in Internet gaming need to first determine whom they are communicating with. If you can properly identify and then target your audience through the website, your customers will begin to see themselves in the site. They will feel comfortable, upon visiting your website, they will feel like they belong there. The Kosher Casino, for instance, narrowly targets itself toward the Jewish markets through generous use of Jewish phraseology: “Interested in winning some gelt? We offer the absolute finest gaming software available that you'll be farklempt. With stunning graphics, fast playing action, higher than average payout ratios and trust that is worthy of a rabbi, our little shtetl will be making waves for the whole mishpacha, not to mention the community.”
Successful targeting requires that you design the website graphics and content to match the style and tone of your target market. Market research needs to be conducted to assess the target market’s preferred style, tone, and content of communication. Does your target market prefer conservative or edgy prose? Do your customers want a quick visit or are they looking f
Date Posted: 31-Mar-2002
*Sudhir H. Kale, Ph.D., is Associate Professor and Chair -- Department of Marketing at Bond University’s School of Business. Sudhir has published extensively in the areas of customer service, cross-cultural marketing, and gaming. A consultant and trainer to several top organizations in gaming, e-commerce, and the services sector, Sudhir enjoys the occasional punt in a ‘brick and mortar’--and sometimes marble-- casino. Contact Details: Department of Marketing, Bond University, Gold Coast, Qld. 4220, Australia. Telephone: (61)7-55201416; fax: (61)7-55951160; e-mail: Sudhir_Kale@Bond.edu.au.