Each December, I review all of the assignments completed by my company, Gaming Research, Inc., for casino-related clients. The assignments usually cover the full range of business concerns from patron loyalty to marketplace satisfaction to competitive analysis to marketing program effectiveness, and so on.
That being said, a careful screening of all of these efforts year in, year out raises the following question: Why is it that whether the assignment was for a local or regional or major tourist-driven entity, hardly any were driven as part of the company’s overall strategic and tactical operating plan?
The reality in January 2010 is little different than January 1990-marketing research for many casino organizations is not very high on the strategic-tactical mission list.
The question is: Why?
There is no single answer here. I believe there are a number of reasons that interact and dominate, resulting in a series of less-than-optimal decisions. To use a loaded term, there is “organizational paralysis” on the subject of market research. Yes, there are organization exceptions within the industry, where the continued application of marketing science is indeed a strategic corporate mission. That being said, however, for most small to medium to even large-scale casino organizations, a research focus and commitment is often an afterthought.
To one extent or another, all of these reasons apply:
• First and foremost-for most casino organizations-even with those few who have identified a CMO (chief marketing officer), the official marketing research function more often than not remains at the senior director or director-manager level, a rarity at the vice president level.
• Secondly, for the vast majority of casino organizations without a CMO, the marketing research position is not at a significant organizational level; it is usually one of many responsibilities of the VP, and the research position is most often at the manager level.
Before adding to the list, the first two comments remind me that on a number of occasions and continuing today I have been personally asked by the most senior marketing officer at both single- and multiple-property organizations to write (yes, write) the strategic and tactical marketing research plan to support the overall company’s business plan!
Another point to consider is that without a “marketing research champion” in the company’s higher echelon (the EVP-GM or the COO or CEO, for example) then an active marketing research program will not take place. In my annual review less than one in five casino organizations that I am reasonably familiar with have that senior management champion.
• A more insidious reason why the marketing research function-if it exists at all-is where it is, is that a serious effort at research just may modify, change, stall or even call for a do-over on a number of business initiatives existing at the property or properties today. This in a sense is a bit tragic, because if the senior management team is doing a solid job, research findings on a variety of continuing marketplace business subjects should mostly support the business decisions of the organization’s senior team.
An effective marketing research program is not a hammer to say, “So and so did this or that wrong,” but a way of continuing to monitor, review, analyze and support important patron-based to employee-based subjects which impact overall business performance.
• It also needs to be pointed out that there is often a less insidious reason why the marketing research function is so low on the casino organization’s food chain. It is simply “inertia,” the all-too-often human desire not to change, not to rock the boat-that if we investigate further this may alter our strategy, our tactics, so let’s not do that. So you continue to do what you always do, and assume it is mostly working.
The Knowledge Base
Do I believe nothing gets done without research, research, research? No, no, no, I don’t believe that at all. As someone who has held very senior management positions in casino organizations as well as advised senior casino executives on a number of significant business transactions, I know that day-in, day-out decisions using both the art and science of business work best.
But, it only works best in organizations where there is a “knowledge” base-the continued adopting of relevant research and related empirical findings to the organization’s mission-using all of the “tools” available that support or can modify or change the business direction.
Casino organizations should not only update floor technology (suppliers help to advance this area all the time); they should continually update their knowledge IQ by investing in a marketing research function that meets the demands of a competitive marketplace.
A Final Story
We recently completed a major research assignment for a large casino organization-and before sharing results with the client I conducted a small-scale experiment. For the nine senior members of the management team, I asked what the marketplace range of answers would be on six key subjects:
• On four of six subjects, management responses ranged between 40 percent and 60 percent (high to low) around a consensus answer.
• And on two of the six areas investigated, the management team predictions revealed a variability of more than 100 percent from low to high.
Enough said. Sharing the research results did help enliven the management discussion.