A lot has changed in the casino business over the years, but most of the technological changes have made it more convenient to play slot machines and other games.
You no longer have to flag down a host to see if you can get your room comped or get a coupon for a free buffet. You don’t even have to stand in line to cash in coin coupons, which used to be one of the necessary rituals of player’s club membership.
In many casinos, you don’t even need to flag down the cocktail server. You can press a button to order your drink and a server appears with what you ordered. Comps and cashback are automatic—press the “$” button, see how much you’ve got, and download it to your credit meter.
These conveniences have surely kept players at the machine, and playing.
They have also driven players away.
According to John Acres, who invented player tracking in the 1980s, the same automation that has cut time from the customer service process has also curtailed one crucial element of the casino business: personalized service.
Acres pioneered much of the technology that forms the basis of modern casino marketing—from slot accounting and player tracking to bonusing, reward points and more. Now, however, he says the methodology used to reward players must be re-engineered, because today’s casino industry is not the industry for which the technology was originally developed.
While the idea was to make sure the best players were taken care of, Acres says, automated player tracking created a class system of sorts, with most missing out on the royal treatment, or even a greeting from a familiar face on the casino’s staff.
“When we created player tracking systems in the early ’80s, it was simply about accruing play information on individuals,” Acres says, “so that we could focus marketing on the people who were spending the most. We didn’t do anything past that.”
The reason it worked for so many years? Sheer numbers.
“Because there were few casinos and lots of people looking to gamble, it was more than enough to say, ‘Joe Smith and Debbie Arnold here are our big players; let’s focus on them. And Tim Jones over here, he didn’t spend much, so let’s ignore him.’ Now, the world is different.”
The fact that some players feel left out, he adds, is a symptom of a larger problem facing the industry—a dwindling pool of customers and a marketing culture that is not creating new players.
“We as an industry have never learned to develop new players,” Acres says. “We simply served the people who wanted to gamble that we could identify, through their existing play. And as we’ve grown our industry, we’ve not grown our market to keep track, and therefore, our revenue per machine or per casino is down.”
Aggravating the problem is that fewer people, particularly in the younger generations, are gambling in casinos, and many former good customers have stopped visiting. Acres says it’s another sign of the times in an industry that has gone from special to commonplace.
“Thirty years ago, traveling to Las Vegas or Atlantic City to gamble for a day was an exciting adventure,” Acres says. “It was something not everybody did. It made you feel like you were leaving that ordinary world for an extraordinary world… Now, because of the plethora of casinos we have, they are part of the ordinary world. There’s nothing exciting about them.
“So what we have to do is help the operator build that excitement. We have to make those promotions seem more special. We have to recognize (players) as individuals, and we have to help them feel like they’ve accomplished something meaningful by winning a $100 jackpot, even though they spent $200 trying to win it.”
It’s part of providing what Acres calls giving the “hero’s journey” to casino customers—creating an experience that makes them feel special, regardless of their spending level. “They go home feeling like they accomplished something,” he says. “That they’re better than when they arrived. That, ‘Even though I go to work and I got beat up by my boss, I didn’t get the promotion I wanted, I went to the casino, and I achieved a $100 jackpot… I got to go into this place, where I’m special.’”
The loss of that special casino experience is not because of the advance of technology, he says, but because, by and large, the industry has not used advancing technology to its full advantage. Today’s system solutions, combined with the wealth of information through big data and the cloud, allow casinos to access a wealth of information that can create new players and improve the experience for current players. The key, says Acres, is to develop new ways to use that information.
“The real issue is that the big system suppliers still think they’re in the big-player identification business, instead of being in the ‘discovery of the new player’ business,” Acres says. “And that’s not a well-developed field. We know that we can make it work, but we have to take the data out of these systems, and we have to repurpose it. And the big guys just aren’t very good at that. They can’t pay attention. And that’s where guys like us come in.”
New Marketing Paradigm
“Guys like us” refers to a group of industry consultants and technology suppliers currently helping casino operators create a new marketing paradigm dedicated to the customer—and to creating more of them. Prominent among them is Acres’ current company, Acres 4.0, which is dedicated to using mobile technology to help operators simplify the process of providing service tailored to each individual customer.
The flagship product of Acres 4.0 has been Kai, a management and communications tool that automatically mines all customer data and translates it into actions that can be taken immediately. The information is drawn from all the available data on each player, from play preferences to favorite food and beverages to birthdays, anniversaries, the sports teams he or she follows—both internally through the player’s club and externally over the internet cloud.
That information is tapped in response to any number of triggers, such as a player inserting a card into a machine, checking into a hotel or logging on to a property’s social casino. The proper host or marketing official, or even the GM in the case of a top player, can be notified on their mobile phone of the player’s presence, and take the proper action instantly.
Kai can be integrated into any of the existing player tracking systems to add features fostering personalized service to customers.
“With Kai, we’re starting to dispatch hosts and other people to go greet players by name, to bring them their preferred beverage as soon as they slide in their card, without their ever asking to have it brought,” Acres says, “to summon their car when they need it, to recognize when they have a birthday, to put them in touch with their friends, and a whole variety of other things to help people feel special.”
It’s also a perfect system to address service needs on the machines. “Show us a machine with a problem, because there’s a player with a problem standing in front of it,” says Acres. “If a machine’s not working, a player is disappointed, right now. They’re waiting, and that wait time is agonizing. With Kai, by connecting to the data that the systems are throwing away, we’re able to use mobile technology to dispatch a qualified person to go over and solve the problem.”
Acres says Kai cuts an average of three minutes per game, per day, off service time. “In a 2,000-machine casino, that’s 6,000 minutes a day. That’s a lot of time. It’s 100 hours of labor time saved a day, and there’s an equal amount of time—100 hours of player waiting time—that goes away as well. We’re saving casinos millions of dollars in labor, and getting them millions of dollars in additional play.”
Acres says the ability to demonstrate return on investment has been critical to industry acceptance of such major changes in the casino marketing paradigm. “Technology like Kai provides a return on investment from day one,” he says. “We see that we can save labor, and we see that we can save player waiting times. We can improve that experience. And if the casinos can convince themselves to not take those labor savings as short-term profits, but rather reinvest in hosted offerings, and creating a proactive experience instead of a reactive service, then you have the ability to start attracting those new customers.”
One proving ground for these concepts has been San Diego’s Barona Resort & Casino, which has not only implemented Acres’ Kai product but has embarked on a complete marketing program that aims to improve the experience for all customers. The casino is working with consultant VCAT on the marketing program. (See page 28.)
At Barona, there are fleets of hosts taking the time to greet customers. Two or three employees will greet guests by name with birthday greetings, anniversary wishes or whatever else is appropriate from the information available to them on their smartphones.
And the best part? The casino is making more incremental money than it costs to generate the extra business. “Barona stands alone,” says Acres. “Their revenues are up and up and up. They defy logic; where other properties are cutting labor to save money, Barona is adding labor, and they tell us consistently that every time they add labor, their revenues increase by more than the cost of the labor.
“And all you have to do is go there and see the environment. You drive in and everybody’s waving at you, saying, ‘I’m glad you’re here!’ and you walk through the door and employees shout out to you and seek you, to say, ‘Hi, what are you looking for? How can I help you?’”
Barona is an example of how casino marketers can use key new technologies in concert, says Acres.
“We have this trifecta of new technologies that are very exciting to me,” he says. “We have mobile communications—the phones that we have in our pockets, that have absolutely transformed how we run our everyday life. We have big data, which is part of the internet, to be able to consolidate and analyze information from hundreds of thousands of people, and find patterns within that, that we can use to create new satisfactions.”
Instead of projecting that information on some boardroom screen for analysis, Acres says, operators can use the third part of the trifecta—artificial intelligence. “We take this artificial intelligence and let it parse through the data, and determine what changes to effect,” Acres says. “It then measures the results and learns as we go.
“As human beings, we don’t have a hope of treating each player as a true individual… Casinos are 24/7 operations. You can’t create good communications between shifts. Even if you could, there’s no way that any one person on the floor at a given time can know all the players that are in there, much less measure them. But, artificial intelligence and big computers can. They can measure every single player and analyze their own behaviors, bend them into psychographic and demographic profiles, and create new hero’s journey experiences for them.”
Acres says new technologies like artificial intelligence, voice-response computers and more are poised to launch a new era in casino marketing. “If you look at the rate of change in this technology, it’s going to enable a personalization that we have never before imagined,” he says. “The next 20 years will be incredible.”
Embracing the Paradigm
While the next 20 years may be incredible from a technological standpoint, the way casinos market should be changed now, Acres says, to a process that retains current customers and creates new ones.
The player’s club tier system, he says, is outdated. “We need tiers of one,” says Acres. “In the old days, before we had the advanced technology, (the tier system) helped us bin our customers into places where we could profitably categorize services. The other thing it did was it provided aspiration. I’m a Silver member; I want to be a Gold member. If I’m Gold, I want to be Platinum. And we do see people moving through the ranks.
“But what we don’t realize is that there are other people who cannot, within their budget, reach those new levels. And we are telling them, ‘It’s futile. We don’t care. You’re stuck at Silver. You are unimportant to us.’”
Instead, he says the industry should help players spend within their budget, with recognition as a good customer at each level. “The No. 1 enemy we have in marketing our products is the bad reputation we’ve got,” he says. “There’s 20 percent of the population that thinks we should all be closed. We’ve got to fix that. And the way we fix that is we help players stay within their budget instead of tempting them to go beyond it.”
At the same time, he says, operators should provide the “hero’s journey” at every level. “We can create individual hero’s journeys, that are satisfying within every budget,” Acres says. “There’s got to be a difference between the person that spends $20 for an evening, and the person that spends $200, and the person that spends $2,000, but there’s also got to be a sense of accomplishment at every level, without making them feel like they’re nothing because they can’t afford to spend more.”
Acres paraphrases what casino mogul Steve Wynn told him back in the 1990s: “(The player is) a renewable resource. You want to give them a good time, charge them an affordable fee, and have them anxious to come back again.”
These methods will keep current customers coming back, but other marketing changes can bring former players back and create new ones, Acres says.
Acres contends that current marketing efforts are ignoring a huge source of potential new business—players who visited once or twice and didn’t return.
“Our studies show that something like 80 percent of all adults in the United States visit a casino less than two times a year,” he says. “That means we have huge upside. If we go into our player tracking databases, and instead of looking at the top players, we look at the people who didn’t come back, and start to market to them, we realize that they came in here for a reason. They gave their name for a reason, but we disappointed them. Can we now bring a percentage of those people back? If we brought back one-tenth of the people that didn’t come back, we’d double our business. That’s a lot.”
Again, the database can dictate the right way to do that, with food, amenities, activities the customer history indicates they may enjoy, etc. But mostly, says Acres:
“Invite them. And invite them in a way that makes them feel important. Right now, what do we do? We send out a mass mailing, addressed to ‘Dear Player.’ We save the personal greetings for people we feel have value.
“We have to find ways to estimate people’s value and treat them according to their potential worth, not according to their proven worth. The definition of developing new players means that we’re treading into the unknown. And as long as we keep the conversion percentage reasonable that we can make a profit, we can do that. And these new technologies let us invite new players—people that maybe came in once or twice before—in ways that can be profitable, and which say we care, come here, escape your everyday life, enter into our extraordinary world, become a hero.
“Yes, you’ll spend some money, but it’s going to be an affordable amount of money, and then you’re going to go home feeling better.”
Attracting new players who are not traditional casino customers—the millennials, in particular—may require other enticements for the journey, like new skill-based games, or games with levels of achievement. Acres says more regulatory change could create those opportunities.
But new game styles alone, he says, are not the solution. “If we have people looking for ways to create new games, that’s great,” says Acres, “because we do need new games, and we’ll have to work through the regulations. But again, if we create that hero’s journey experience around the existing games, we can attract new players.”
And much of that, he concludes, lies with simply giving players a fair shake. “If we really want to move forward, we have to give better value,” Acres says. “And that better value will not come necessarily by just cutting price. It has to come by improving the experience—by making every person feel special.”