Data! Data! Data! I can’t make bricks without clay.
—Sherlock Holmes, Adventure of the Copper Beeches
It has been three decades since the first automated player tracking systems gave casino marketers information on who was gambling the most on their slot floors. That rudimentary accounting information created a new era of smarter casino marketing, with promotional spending based on empirical data rather than just the keen eye of a host.
As computer technology has advanced over the years, so has the quality of the information available to casino marketers. But even Sir Arthur Conan Doyle, when creating that iconic Holmes quote in 1892, could not have imagined the volume of data that would become readily available in the 21st century to anyone willing to dig a bit.
And to a casino, data is worth digging for. Any and all data about customers can lead to more efficient, effective marketing. And there is more data out there about customers and potential customers than ever before—with plenty of experts ready to help find, mine and use that data.
The casino industry has entered the age of big data.
“Big data,” of course, is the latest tech buzzword—a broad term for data sets so large or complex they can’t be managed using traditional data processing techniques. Retrieving, researching and analyzing big data for the specific needs of a client has become a new and growing sub-industry for data technology experts, and there is no shortage of demand for these services in the casino industry.
“The big problem with big data,” says Eian Counts, vice president of product strategy for the Rainmaker Group, “is that the data can have a lot of advantages, but at the end of the day it really also needs to be smart—because not everybody can afford to hire a team of PhDs and data scientists to make sense of what all this data means.”
Pricing the Room
Rainmaker is one of the many boutique software suppliers helping gaming operators turn the mountains of data they have into mountains of revenue through smart marketing and strategic planning. The company’s GuestREV product helps gaming resorts decide the right room pricing and comp decisions based on data from profit centers throughout a resort.
The idea is to ascertain what Rainmaker calls “Total Guest Value” using historical revenue data from gaming, food and beverage, nightclubs, spas and other profit centers. The software then applies forecasting and optimization algorithms to reach room rates and other decisions that will be most likely to result in profit for the enterprise.
“A large portion of what makes a revenue management system excel is how solid its forecasts are,” Counts says. “The forecast is the heartbeat, the lifeblood behind a revenue management system. Of course, it’s absolutely critical that we include all the data we can to drive that heartbeat.”
That means connecting the data dots among a variety of systems in place at a given casino. “It’s not good enough just to have those tools sitting in isolation,” says Counts. “Those tools need to be talking to each other, and they need to have open data communications and transfer—so, for example, GuestREV can make the right choices around which level or segment to accept based on data that exists in two, three, four or five other systems. That’s a huge challenge the industry faces in general.”
The science of optimal hotel pricing was one of the first non-gaming areas to draw on multiple data sources to frame business decisions. With casino resorts in Las Vegas drawing more revenue from hotels and other non-gaming areas than from the gaming floors, casinos have called on companies that produce relevant software and double as consultancies on how to best apply the technology—companies like Rainmaker, or Duetto, the San Francisco-based firm founded in 2011 by former Wynn Resorts business strategy executives and one tech veteran.
The executives—former Wynn Director of Enterprise Strategy Marco Benvenuti and Business Strategy Director Patrick Bosworth—founded Duetto Research with Craig Weissman, former chief technical officer of Salesforce.com. Duetto specializes in hotel pricing strategies based on data from a variety of separate tracking systems.
“We connect with the property management system of the hotel, so we’ve got all the reservation information, group information, cancellations,” Benvenuti explains. “We also connect with the hotel website, so we are able to track folks who were looking for a room but did not buy one—we track lost business.”
For the final decision on pricing and comps, the Duetto software connects with the casino management system in place. “We basically are able to get, in an automated fashion, the value of each player who makes a reservation,” says Benvenuti. “Through the triangulation of all the data sources, we are able to physically forecast demand by player worth, and then decide how much to sell the room for somebody up the street versus how much to sell or give the room for free (to a loyal customer).”
Benvenuti notes that the casino management system is crucial. “A CMS like Konami (Synkros), our preferred integration partner, actually collects every single data point from the different POS points.”
The technology of linking those data points from myriad different systems has advanced rapidly during the past few years, Benvenuti says. “Slowly but surely, we were able to create robust integrations with all these different systems,” he says, “so that now, we’re able to serve a large portion of the market.”
New Tools, New Data
There is a big push among casinos, and producers of the big casino management systems, to find new sources of useful customer data—and new ways of translating that information to the bottom line in the form of customer acquisition, retention and increased spending.
The field of data sources that can be used by casino marketers and business-intelligence experts is growing all the time. Not coincidentally, the variety of new software available from different specialty firms provides tools to mine the big-data mountain, from records already with the casino to social media to public records.
Companies such as Casino Data Imaging (CDI), Qualex, LexisNexis, DataSpade and SAS are expanding the universe of data being used by casinos to improve business results and gain new customers. All are companies that apply data-warehousing and CRM software to the systems that already are in place, increasing the marketing and BI capabilities within the existing system infrastructure.
Software companies like CDI sometimes form partnerships with consultancies such as Qualex on business intelligence and data warehouse solutions. Qualex Asia and CDI have partnered to offer data solutions complete with mobile and social media platforms. “We are trying to help the casinos understand the value of patrons through every dollar they spend within the casino,” says Andrew Pearson, managing director of Qualex Asia.
And outside the casino as well. Through use of social media and other tools, the CDI/Qualex solution uses data from the outside, from customer dining and entertainment preferences to the games played at other casinos, to players’ favorite sports teams.
One of the best ways to get that information is by allowing customers to log in to the casino website using their Facebook identity or other social media account and password. Through the regular “likes” and similar actions, the casino can link to the customer’s Facebook posts.
“You’d be able to associate anything they might be saying out in the social media world with his profile—if he likes a particular sports betting site or sports team, or where he’s actually spending a lot of his dollars—and associate that with particular marketing offers,” Pearson says.
CDI is providing the platform for Qualex projects in Asian markets. “What our new platform does is access different data sources, and slice and dice the data, and display it in a dashboard,” says George Levine, sales and marketing director for CDI. “We try to customize probably a bit more than our competitors.”
The rise of big data also has sent casino marketers far from the walls of their land-based casinos in the quest to maintain timely, accurate profiles of their players. Where casinos once relied on knowing which of their players wagered the most inside their casinos, technology now provides real-time access to public records as an option to help make marketing and business decisions.
Ohio-based LexisNexis Group has been a mainstay of law research since 1977, and its database of legal precedent has grown right along with technology in the computer age. The group also has grown in the types of data and records it provides to clients in various industries outside the legal realm. One of those is the gaming industry.
Marketing provides the fastest-growing area where public data can make a real impact, says Yuri Cameron, director of market planning for gaming for LexisNexis Risk Solutions. He notes that his firm offers access to “a huge amount of data, going back decades.”
The most basic need, of course, is for that data to help identify who a casino resort’s best customers are. Timeliness is crucial, Cameron says, and public records can reveal changing financial circumstances. Liens or judgments reflect financial crisis—or worse, problem gambling. On the other side, information as basic as a customer’s ZIP code can reveal, in one visit, a good opportunity to market to a potential high-end customer. “Say two customers each spent $500 in the past three months,” Cameron says. “If the ZIP code of one indicates he lives where property values are $10 million, obviously, you are only getting a small portion of that customer’s wallet.”
Connecting It All
In the end, connecting the data dots is what all the specialty software firms contribute to casino marketing and BI. Many of them serve as third-party suppliers to complete the offerings of one of the big system suppliers like Scientific Games, IGT, Aristocrat and Konami.
In that respect, each interfaces into the casino management system in place. Some, like Michigan-based DataSpade, do all the heavy lifting for casino marketing. DataSpade’s Bounceback software provides a turn-key loyalty system, using the mountain of data already in possession of the operator to tailor a complete profile of each player in a casino’s customer database.
“The program we implemented identifies typical play levels for our players,” says Steve Neely, chief marketing officer for Tucson’s Casino Del Sol Resort, which enlisted DataSpade last fall to revamp its player marketing. “Then we translate the money they’ve spent into a language the player’s recognize, which is points.”
This ready-made CRM program has helped Casino Del Sol make sense and use of its data. “We had access to the data before, but we were just not using it correctly,” Neely says. “They took our data, ran it through their program, and gave us back lists we uploaded into our player accounts… We uploaded it into groups. They looked at the play history, but differently than we did.
“It’s a tool that you can integrate into your property if you don’t have the expertise, and certainly the time, on staff. I’ve been doing this for years, and what was different about this is that it was a program that had already been developed. I didn’t have to build it from scratch. They took a lot of the legwork out of it; it really was a full-service piece.”
Connecting the data dots, of course, is also the main purpose of the casino management, CRM and BI systems from the big slot manufacturers. And whether through integration of third-party software or homegrown R&D, the big system suppliers are constantly modifying their offerings to tap into the vein of big data to improve their offerings.
Scientific Games’ Bally systems, the leading systems in the casino industry, include a sophisticated customer communication tool within the iVIEW Display Manager bonusing system. Customers have raved about BOSS—the Beverage Order Service System, which not only lets players order drinks right on the slot screen, but stores each player’s drink favorites in the database. Press a button, and your top drink choices appear.
But customer service is only the tip of the iceberg when it comes to ways Scientific Games has incorporated access to new data into its infrastructure. “We’ve done the heavy lifting in recent years to make sure we interface to all the retail establishments—point-of-sale, hotel, race and sports book, the spa,” says Tom Doyle, vice president of product management and compliance for Scientific Games.
“Then we go to the next step, our Bally Mobile product. The customer now has a mobile application that allows them to do a whole laundry list of different types of things on their mobile device—make reservations for dinner, check on player club status, see what kinds of special events or promotions they’re eligible for.”
Bally has been at the forefront of customizing player benefits through new data. Use of social media and geolocation are leading to capabilities not imagined even five years ago. For instance, the iVIEW DM system at the Eldorado offers players the option to post big wins on the casino’s Facebook page. “The player is given a choice—do you want to post this win on Facebook?” says Kiran Brahmandam, vice president of systems development at Scientific Games. “Those following the casino’s page can see that win, and can see that a lot of people are winning at this particular casino.”
The next big marketing advance, Brahmandam says, will come from geolocation technology. “Information on location has changed the way we live in the outside world,” he says. “GPS has effectively changed the way we all live. We believe that knowing information about players inside the casino using beacon technology is going to create a similar revolution, and change the player’s basic experience inside the casino.”
Soon, personal messages from the casino to the player can take into account the player’s exact location within the casino, and, combined with the improved and manageable data stream in the system, make relevant offers in real time—a discount at a favorite restaurant, an offer of show tickets for a performer the player loves, etc. “That’s where our products will evolve, and that’s what we’re working on,” says Brahmandam.
There is no shortage of new data sources being tapped within the systems of the other top companies either. IGT’s Advantage system is constantly evolving, its API—the acronym means application programming interface—consistently gathering new capabilities.
“A few years ago, we started enhancing the API to integrate partner sources of data,” says Sina Miri, senior director of project management for IGT. “We’ve gone to standard APIs, which companies like Google and Facebook are using.”
Like others, IGT is experimenting with geolocation and beaconing technology. However, tapping social networks and social gaming—including IGT’s own successful DoubleDown social casino on Facebook—provides the most promising new data source, says Miri.
“People on social networks are sharing a lot of personal information and preferences, and capturing a lot of behavior that will allow you to better know your customer,” Miri says. “And the more you know them, the more likely you are to put relevant offers in front of them.”
Facebook authentication instead of email addresses for the casino’s website “gives the operator access to your social graph, and your ‘likes,’” says Miri. “That will tell you, for example, that I’m a soccer fan as opposed to a basketball fan. When an operator has that information, he can send offers that are relevant to you.”
Angelo Palmisano, vice president of system products for Aristocrat Technologies, is pursuing similar new data sources for that company’s popular Oasis 360 casino management system.
“From a marketing standpoint, the challenge has always been to have good data on what the customer’s total spend is,” says Palmisano. “What we’re looking at now is access to real-time hospitality spend, real-time F&B spend. Those are the outlets we’re focused on in the social space—real-time spend outside the enterprise itself. Customer behavior is our focus.”
Aristocrat has the added advantage of a popular free-to-play platform it has created for several casinos, which provides more data for the Oasis mix. “We want to know what kind of games they play, how often they play, what else they look at when they’re propositioned during those games,” says Palmisano. “It’s about looking at their behavior and then looking at how to apply those behaviors to brick-and-mortar casinos.”
If there is one thing everyone agrees on in the drive to tap into big data, it is the need for speed. “This is real-time data, and customers are getting access to it in real time,” Palmisano says. “What excites us most is the ability to look at overall customer behavior, irrespective of gaming, and having an automated process of rewarding those people with what you would call instant gratification. As they’re doing something, those customers are being rewarded.”
“Our casino operators are looking for better and better ways to use the data,” says Scientific Games’ Doyle. “By connecting them to outside-the-walls data, income data and other demographics, you can take your marketing to the next level.”
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Getting Sassy
SAS has contributed to the evolution of player-based marketing
When examining the entry of big data into the casino marketing and business-intelligence functions, one name comes up more than most: SAS.
Since it was founded in 1976, SAS—the original acronym stood for “statistical analysis system”—has helped clients in a variety of industries make sense of their data. Over the past three decades, though, no industry has benefited more from the company’s expertise than the gaming industry.
SAS technology, for example, formed the basis of Total Rewards, Caesars’ groundbreaking and much-copied national player reward system. “The momentum (of big data in casinos) was really driven by Caesars’ success with the Total Rewards system,” says Kelly McGuire, executive director of hospitality and travel global practice for SAS. “When Gary Loveman came in and added that analytical radar, that’s when the casino industry really realized the value of all that data they were sitting on. Caesars really changed the game in the way we think about what a valuable player is.”
Caesars, McGuire says, turned whale marketing into mass marketing.
These days, SAS works with most of the big gaming players globally—and many of the very software suppliers looking to expand the data base available to operators. “Technology has really driven a lot of the innovations that are happening now,” McGuire says. “The technology infrastructure is facilitating access, and allowing people to do more and better things. With increases in processing power, with memory and data storage becoming a lot cheaper, it’s becoming feasible for casinos to store more and more detailed data.”
She says what marketers need to develop is the ability to cope with what she calls the “three Vs” of big data—volume, variety and velocity. And the problem for casinos has been the second two Vs.
“There is more information available than we’ve ever had to deal with before,” she says. “To effectively use it, you have to rethink the way you’re going to capture, store and analyze it.
“The velocity is a huge problem too. A tweet is stale five minutes after it is tweeted. If you don’t react to it by then, it goes viral and you’re done. Or it doesn’t, and who cares? And geolocation as well—you can’t change the billboard two days after I walked by it. Or two minutes. Because then it’s only creepy for the person in front of it.”
She says the next step for casinos is to build the infrastructure to handle all this data. “Data becomes an opportunity only if you think of it in terms of what insights can help me improve my decision-making, if I can just get at it—and get at it at the speed of business.”
