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Testing, Testing, Testing

Want to know whether a product, promotion or event will succeed even before it happens? Market research is the answer, but it has to be more nuanced than it has in the past

Testing, Testing, Testing

A relatively conservative estimate puts the introduction of new products at about 30,000 per year. Of that large number, some estimate 80 percent or more will fail. The reasons will vary. Sometimes the product is flawed. It can also be that business owners fail to understand the consumer and their needs.

As casino marketers, we create a variety of reasons for guests to visit. If we are lucky, we get to introduce a new brand, facility, or program. These introductions are usually invested in heavily, not only financially, but with all our time (and frankly, spirit). So, it makes sense to take a step back and take time to get to know the customer and the marketplace from a non-biased perspective.

Market research can give us an advantage in providing valuable insights by giving us an accurate view of our business and marketplace, lowering risks, and identifying opportunities and trends.

Markets Matter

When operators look at a new jurisdiction, we rely on industry research: published data and market research that can be analyzed on our behalf and primary research that can analyze key players, growth, trends and competitors. Market research endeavors to identify target customers and their needs and desires. This is the type of research that usually involves marketing. 

Casino market research tends to differ from most other industries reliant on market research. Unlike industries that may do pre-market research to see if something might be well received, we seldom (if ever) test our players clubs or test a hotel. The same could be said for industries such as the music industry. A label never really knows if a new artist will fill a 500-seat facility or a 50,000-seat facility. They use cues such as downloads and Spotify listening data to determine how they will build an artist’s tour.

When you consider that you have to realize the data they are using are people listening on a subscription and not having to shell out triple-digit ticket fees, setting up a concert tour for a new artist is a gamble. Toss in the fact that labels do much to boost those plays and listens, a successful (and profitable) tour, particularly for a new artist, could very well be dumb luck.

When we introduce a new offering, we may or may not necessarily examine market studies and trends. We launch and then deal with the benefits and consequences. Perhaps our dirty secret may be dumb luck as well.

However, there have been times when casino operators relied heavily on market research. When then-Harrah’s Entertainment looked to create a brand for itself, the entire effort was research-driven before it became a marketing effort. When the former Isle of Capri Casinos looked to bifurcate its house of brands, market research was conducted nationwide, and the Lady Luck was reborn along with supporting creative and messaging. In both cases, operators even tested a variety of music to land on the brand jingles.

Food Fights

Are casino buffets a thing of the past?

More than just branding, casinos can use research to fine-tune any portion of their experiences. The shifts in consumer dining have been the reason for many operators to change their food and beverage offerings. Many buffets are now being transformed into anything from food halls to stand-alone restaurants.

Using research techniques, “an operator can uncover what their customers actually eat and what they actually pay for versus what they would perhaps only dine at with a comp,” says Elizabeth Meczka, managing director of Meczka Marketing Research Consulting. “Research lets us see how quality fits into their decision-making and where the comfort level is between what they would pay for and what they expect to get for free.

“Like other industries, there are some operators who might make a decision and then come to us when they see a negative effect or result,” she adds. “That’s when we come in and really dig into what might have been wrong, what customers want to see in order to repair any damages, and how the casino can create a plan for change.

“On the flip side,” she continues, “we have some casino clients that are seeing success but don’t want to rest on their laurels. They say, ‘Things are great, but we want to ensure we’re hanging on to our best players. How do we keep them coming to us instead of the competition?’”

Team Spirit

As for understanding the stakeholder perspective, no other stakeholder may hold as much power and value to our brands as team members. MMRC guesstimates that one in 25 casinos will go beyond the typical quantitative survey when gauging employee satisfaction and identifying retention opportunities.

Meczka points to the “Great Resignation” and sees why casinos might be worried about retention, and for some, new competition just adds to the considerations. Meczka says, “There are little things that you need to dig into to understand employee motivations. Going in and just asking what they like about working there isn’t going to uncover anything truly actionable. Asking them questions like what they’ve noticed can tell you a lot about how they are feeling, particularly post-pandemic. Many have been dealing with hardships, illness, and gas prices. All of this affects how an employee is feeling, and then to patrons.”

Meczka shares a story of a casino front desk. For months, they were without a simple office supply, causing a minor issue to turn larger than it should have been. This was an easy fix, but it slipped through the cracks because everyone was functioning differently. The crack kept getting bigger as resentment rose. They felt like no one cared, but once someone could share their frustration with a neutral third party in the form of a focus group facilitator, they felt heard.

The Meczka Gaming Index (MGI) was developed over 10 years ago to give operators a measurable view of their operations from the guest’s perspective. It was designed at a time when many industries implemented Net Promoter Score (NPS) programs but perhaps had no plans for how to improve their operations as a result of the off chance someone would recommend a business.

By using a five-point scale, the analytics will yield indices such that a casino can obtain a more straightforward measure of performance as perceived by its gaming patrons. In the MGI, gaming patrons respond at one of five levels and are placed into three unique segments. Similarly to NPS, the index uses a mathematical equation to account for “loyalists,” “supporters” and “scorners” of any portion of the operations.

MMRC’s Ken Foster explains, “Operators can use the scores to see if a system or service is working or not. You can measure the scores over a variety of time frames to understand progress. It helped us add more actionable information in our guest/patron satisfaction studies because it allows easy identification of what’s working and what’s not.

“It is as relevant today as ever,” he continues. “I think it’s even more so because right now, we are seeing players clubs that used to have very high scores in the past now dropping due to lack of employee retention. I think it’s become even more important to uncover where clients need to concentrate and what they need to do to improve their services.”

While there has always been a debate that a high NPS might not equate to great revenue numbers, Foster has seen casinos with exemplary MGI scores have equally superior revenue. When you are in a competitive marketplace, a high score can be an advantage.

Close to You

Whether you rely on NPS, MGI, or traditional research, there is no denying the need to stay close to customers and their opinions.

Technological developments continue to democratize most processes. Who would’ve thought 10 years ago that a phone could also produce a beautiful cinematic story? The same goes for the DIY tools available to survey any target audience. There is a swath of tools available, from free basic surveys to surveys with skip logic and randomization. The tools work, but often it is the user that might be faulty.

Third parties can bring a sense of neutrality that allows participants to be truthful. An experienced focus group moderator also knows how to recognize the guy or woman in the room that has to take up all the air wherever they are. Likewise, they understand how to let the quietest person in the room still have a voice. When you have built a relationship with your patrons, whether it is through their complaints or simply seeing them on the floor every Friday, being an objective observer of their comments is just more complicated.

Meczka agrees, “You’re going to hear what they’re saying with some kind of spin on it—they’re just saying that because last month they didn’t get a buffet comp or they weren’t invited to something—whereas as facilitators, we’re just hearing what they’re saying. And I think sometimes it’s just hard to hear if they’re also complaining about a promotion that was your idea. It’s way too personal.” She also notes that some customers might give an answer they think the casino wants to hear. A third party can eliminate that for customers and allow them to respond without a filter. Professional focus group moderators can also keep the group on task and gently move people back into the discussion.

There are a number of reasons why you should use a professional partner in your research, but the need to stay close to your customers’ thoughts and opinions should always outweigh waiting for the proper budget. If you’re going to go down the DIY route, there are things you should consider (that a professional researcher brings to the table) when developing your in-house research.

  • Sample size and sample composition—too large of a sample is unnecessary, and too small of a sample is unscientific and non-actionable. The same could be said for the composition of the groups unless you are focused on a particular group.
  • The phrasing of questions—along with being short and simple, avoid making assumptions in the questions. Avoid unnecessary adjectives, adverbs, and emotionally loaded words.
  • Stay focused on the aims and objectives of the research.
  • Be mindful of what the respondents will need in order to respond, such as time or memory, and their comfort in providing an answer.

Ultimately, doing in-person research, whether it is focus groups, blue ribbon panels, or whatever method you choose, has the added bonus of providing stakeholders with the sense that you are listening to them. I hear that in every session I have ever been a part of. If you have regular customers visiting regularly, don’t they deserve to feel like they have a voice?

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