Marketing

Player Incentives: Don’t Give Away the House

Posted on May 16, 2004

Almost all segments of the leisure and hospitality industries utilize loyalty programs. Airlines, hotels, rental car companies and even restaurants employ methodologies to induce repeat visitation, foster loyalty and build long term relationships with their more frequent and most profitable customers. The airline industry first instituted these programs in the early 1980’s and was followed by hotel and rental car companies. Today, a wide variety of retail industries employ some form of reward programs. They have all come to understand the value of incentives rewarding frequent users of their products and services. While there are no hard and fast rules regarding the percentage of customer reinvestment, it is generally assumed that these industries return between 2% and 15% of the theoretical revenue derived from their loyal customers in the form of various incentives.

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Effective Billboard Design

Posted on March 16, 2004

Virtually all casinos rely on outdoor advertising tocommunicate with their existing and prospective customers. This mode of communication, in the form of traditional “bulletin” style and “30-sheet” rotator billboards, has been embraced by gaming operations for decades. Casinos in competitive markets seek the best locations and in turn, bid up the price of available boards. Billboards are often purchased deep inside secondary competitors’ markets and in markets that are far beyond logical market definitions. In fact, the hunt for available outdoor space often takes casino marketers outside of their traditional markets and into regions where they cannot hope to penetrate.

Outdoor advertising is also expensive, often comprising up to one third of a casino’s advertising placement budget. Yet despite these high costs, casinos continue to rent outdoor space in illogical locations, deliver messages that are not salient to drive-by traffic and create murals that are often illegible or unreadable. Much of the outdoor advertising that casinos employ is simply ineffective.

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Building Effective Promotions

Posted on February 16, 2004

Recent advances in game technology, improved access to capital markets and the continued growing popularity of Indian gaming is creating a climate that is stimulating an unprecedented expansion of Indian casinos. In the next few years, many tribes will expand their facilities or build new casinos to better serve their guests and to provide essential services for tribal members.

Promotions are a critical element of almost every casino’s marketing mix. In fact, in many casinos promotions are considered the primary endeavor of the casino marketing department. It is not unusual to find casinos devoting up to one third of their marketing budget towards promotions. Yet despite the prodigious amounts of money that casinos devote to promotions, few casino managers demand from their marketing team, clearly delineated objectives, a written promotions strategy, or any methodology to track the relative success or failure of their promotions.

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Marketing’s Role In the Design of the New Casino

Posted on January 16, 2004

Recent advances in game technology, improved access to capital markets and the continued growing popularity of Indian gaming is creating a climate that is stimulating an unprecedented expansion of Indian casinos. In the next few years, many tribes will expand their facilities or build new casinos to better serve their guests and to provide essential services for tribal members.

Opening a new property or introducing a greatly expanded facility puts tremendous strain on the property’s leadership and often thrusts managers in unique roles that differ dramatically from the day to day operations of the gaming enterprise. While architects, contractors and consultants manage the construction process, property managers are often enlisted to help with developing the new property while continuing to manage their own departments. The slot director and table games director play an integral role in designing the new casino floor as does the food and beverage director in designing the kitchen, dining room and menus. More often than not though, marketing is not invited to participate in the initial planning of the new property.

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The Marketing Audit

Posted on November 17, 2003

Several years ago, the marketing director of a medium sized casino saw an opportunity to partner with a nearby hotel to achieve mutually beneficial goals. The casino, lacking a hotel, needed a lodging property to house its overnight customers. The casino’s marketing director also recognized the potential gaming value of transient lodging customers if they could be induced to cross the street and visit the casino. Thus, a promotion was created. The hotel agreed to set up a direct billing accow1t and the casino agreed to provide the hotel with a stock of coupon books containing a number of compelling offers to be given to guests upon check-in.

The coupons were designed, printed and numbered. As the books came into the receiving department, they were shipped to the secured document storage closet in the accounting office. The marketing director then requested several cases of coupon books from accounting, which he delivered to the hotel.

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A Behavior Based Approach to Market Segmentation

Posted on October 1, 2003

Market segmentation has long been recognized as a fundamental tool of casino marketing. Casinos throughout the United States segment their customers based on a variety of criteria. Casinos in Las Vegas use criteria such as convention, tour and travel, retail and invited guests. Atlantic City casinos h ave additional criteria defined by mode of transportation and distance traveled such as bus line run, bus charter, inner market and outer market.

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Must Be Present to Win

Posted on September 16, 2003

No industry relies on promotions to drive customer traffic quite like the gaming industry. Casino operators love to conduct promotions. In fact, in many gaming operations, the primary role of casino marketing is perceived as that of designing and implementing promotions.

Casino promotions take all shapes and sizes and run the gamut from frequent “hot-seat” promotions, in which players are selected from the casino floor and awarded a modest prize for playing slot machines, to large-scale drawings for cash, cars and even houses. For the latter, many casinos attach the caveat, “must be present to win” to their list of rules. Virtually all casino operators who employ this rule have, at one time or another, heard complaints from both customers and employees over this requirement. This article explores the pros and cons of requiring customers’ presence at drawings and how casino operators can design promotions that best meet the needs of their market..

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Dispelling the Myths of Cash Back

Posted on June 16, 2003

The player rewards program or slot club is the cornerstone of any effective casino marketing plan. Too often these programs are created by mimicking what the competition is already doing or by examining what casinos in other markets do with their clubs. Often these programs use “cash back” as the primary incentive to get players to use their cards. Cash back in this scenario refers solely to the redemption of bonus points for cash. This article examines cash back as a marketing tool and some of the myths that surround it.

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Database Segmentation Analysis

Posted on May 16, 2003

Casino management systems give the gaming marketer a wealth of information to better understand individual player behavior. Each successive generation of management systems allows casino operators to understand their customers and develop programs that recognize and reward loyal play. All casino management systems give the marketer detailed player information showing trip history, actual win/loss, theoretical win/loss, point and comp redemption history, as well as information on personal player data.

While casino management systems can accumulate vast stores of data on individual behavior they tend to fall short in their ability to summarize the behavior of player segments. The report writing tools that come with many of these systems tend to summarize transactional data to better assist the slot and table game departments rad1er than provide the marketing department
with useful information to conduct and analyze marketing campaigns. Fortunately, it is not too difficult to extract the data from the master system and analyze it using a relational database program. This technique does require individuals within the marketing department with advanced skills using relational database programs. Alternatively, the casino can turn to a database marketing consultant to perform a periodic analysis.

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The Marketing Systems Manager

Posted on April 17, 2003

Marketing and operations executives always have a need for information from their casino management system. Fortunately, designers of these systems predicted many of those needs and designed a series of reports that can be run by the system. Of course accessing those reports requires training and skills senior executives often do not have the time to learn. In addition, executives often have a need for information these reports cannot answer. Who then does the executive turn to in order to extract the information he/she needs to make an informed decision?

Every casino marketing department has a group of professionals that know how to perform certain operations within the casino management system. The bus manager knows how to set up groups, assign tracking codes and monitor the performance of each bus. The promotions/special events manager knows how to set up an event and track expenses, forecast revenue and prepare proformas. The database manager knows how to pull mailing lists given a set of gaming criteria. Each member understands specific components of the casino management system. Few, if any, know how to operate all of the marketing modules within the player tracking system.

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