Operations

Change is Bad, Change is Good

Posted on March 16, 2006

Not too long ago a casino operating in a very competitive market made a decision to replace its aging casino management system. Property leadership defined their user requirements, evaluated a number of competing systems, narrowed their list to two vendors and ultimately chose a system that best met their needs.

The new system afforded the casino the opportunity to redesign their player rewards program and leadership saw this as an opportunity to create a rewards program that was superior to their competition. To best meet the needs of the market, casino leadership first conducted a series of focus groups with people who gamble in local casinos. Concurrently, they examined their competitors’ reward programs. Property managers then decided on a new rewards program and tested the concept with loyal, premium players in the form of “blue ribbon panel” discussions.

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What Makes a Casino Comfortable?

Posted on December 17, 2005

What makes a casino comfortable? While this may sound like a simple question and whose answer may seem obvious, it is rarely asked during the design process of a new casino or the renovation of an existing one. Nor is it a particularly easy question to answer. To some, a comfortable casino is one that has a down-home feel. To others it may be a casino that provides an environment that is exciting and energetic. Still to others, it may be nothing more than a place where customers are greeted by friendly and happy employees. In reality, a comfortable casino is comprised of a variety of elements including sound casino design, quality engineering, employee training in customer service skills and a healthy dose of common sense.

In the early days of Indian gaming, comfort was often overlooked in the rush to build and open properties as quickly as possible. As casinos became more popular, operators added more machines to existing space or expanded their properties in order to accommodate as many customers as possible. The notion of customer comfort played a secondary or even a tertiary role in the operation of the business. What has evolved for many casino operators are properties that are decidedly uncomfortable to be in.

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What Players Really Want

Posted on December 17, 2005

Understanding the wants and needs of gaming customers has long been the mantra of the most progressive leaders in the gaming industry. Collectively, casino operators in the United States have conducted thousands of focus groups and interviews with casino customers in order to understand how to make gaming experiences better. Spurred by the input of their customers, casino managers have undertaken customer service initiatives, increased training in customer service, developed host programs and invested capital in improving the service delivery process. Yet despite these efforts, most casinos have ignored the one complaint that most irks casino customers: tight machines.

Research has long indicated that what customers seek most in their gaming experiences is “time.” Gamers visit casinos for a variety of reasons including socializing with others, escape from the mundane, recognition and excitement. What they ultimately seek is a diversion from their normal lives. Casinos offer environments that are dramatically different and customers want to
spend as much time as possible in those environments before going back to their regular world. While every customer would like to leave a winner, for virtually every customer, gaming satisfaction is measured not by how much money they have in their pockets at the end of the day, but by how much time they spent in the casino before they extinguished their budgets and went home.

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Be The Best Locals Casino You Can Be

Posted on September 16, 2005

As casino markets mature, there is a propensity among gaming operators and, in particular, Indian tribes, to diversify their businesses away from simple casinos. For some, the logical next step in the development process is to build full scale resorts, complete with golf courses, spas, elegant hotel rooms, ultra lounges and other amenities that appeal to new and different
customer segments. The basic assumption is that the local gaming markets are reasonably served and, in order for revenue to grow, a tribe must bring in new, different and far wealthier tourist segments.

The fundamental problem is that resort hotels are expensive to build and difficult to operate. They require a highly trained staff and an experienced sales team. A resort hotel stands a better chance of being successful if it is located within a resort community but that often means they must compete with branded hotel chains with international reservation centers. In addition, a resort hotel may alienate the very customers that made the casino successful as it often holds little appeal to local gamers.

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Casino Restaurant Pitfalls

Posted on May 16, 2005

It is a common sight. Tt is 8:00p.m. on a Thursday night and the casino is busy. Machine occupancy is at 60%; most of the table games are open but the restaurants are nearly empty. The buffet had a short line an hour earlier but the coffee shop is quiet and one of the waiters from the gourmet room is standing in front of the restaurant, rocking on his heels. His dining room is empty.

When this situation becomes evident to senior leadership and they ask for reasons why their restaurants are not busy, there is usually no shortage of finger pointing. The food and beverage director will complain that marketing does not give his restaurants enough advertising support. The casino manager will mention that his customers tell him that the restaurant prices are too high. Other managers who dine in the casino’s coffee shop will say that they see better quality and value at other restaurants in town and the service seems slow. More often than not, the solution is to discount the meals.

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But Did the Casino Make Any Money?

Posted on December 16, 2003

At a recent presentation of casino performance before the tribal council, the casino manager distributed handouts illustrating gaming activity. “Handle is up,” he proclaimed as the council members examined bar charts showing year over year handle growth. “Business is growing. The casino is experiencing consistent increases in handle from prior years. We’re driving revenue.”

The casino’s marketing director then walked the council through an analysis of recently completed direct mail campaigns, special events and promotions. For each of these campaigns the marketing director presented a profit and loss statement showing the profit made. “Our direct mail program has been very successful. Marketing has been able to drill down into the database and mine very profitable customers. Our theoretical win continues to improve and for each direct mail campaign, we have been able to generate on average, theoretical win in excess of 75% of expenses. Our marketing is working.”

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It’s Labor Day Again?

Posted on August 16, 2003

Recently, a casino manager of a large local-oriented gaming property had an epiphany. He realized that Labor Day was only six weeks away and he wanted to do something for his regular players. He assembled his marketing team and together, created a plan to give each customer a gift on the holiday if they earned a certain number of slot club points. The general manager defined some caveats: the gift had to have the casino’s logo on it, it had to be something patriotic and it could not cost more than two dollars. The purchasing director and marketing director then ran off to contact their vendors and see what they could find.

Unfortunately, the items that were available in sizable quantities were limited. None of the samples impressed the general manager. Further, some of the available items could not accommodate
the casino’s logo. Worse, all of the items presented cost well in excess of two dollars. Meanwhile, the ad agency was contacted and asked to start work on an ad. However, until the item was selected, the agency could not produce anything more than thumbnail sketches.

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Bus Programs and the Abandonment of Common Sense

Posted on December 16, 2002

Few areas in the casino receive more scrutiny from senior managers for their business practices than the casino marketing and advertising department. Direct mail campaigns are carefully tracked by redemption rate, average daily spend and trip frequency. Print advertisements routinely contain coded coupons and each publication is evaluated based on d1eir effectiveness.
Player reward programs are evaluated using a variety of measures. Casino executives pride themselves on being able to measure the efficacy of every marketing program. That is, with the exception of bus programs.

Bus programs are an anomaly in casino marketing. They are expensive and, in many casinos, represent the second largest marketing expense behind player reward program costs. Yet despite their high costs they manage to defy measurmement. Bus programs satisfy casino management’s lust for bodies in the casino. They deliver customers in waves but few casinos are able to justify the expenses associated with acquiring those customers.

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