In my role as a senior vice president with the Fine Point Group, I have the pleasure of interacting with tribal and commercial casino marketing departments in gaming jurisdictions across the country, and, literally, around the world. When meeting with a client’s marketing team, it’s always exciting to hear about how they want to use data to be more efficient with customer reinvestment, or to be more targeted with direct marketing and to conduct analysis of marketing programs to make ongoing incremental improvements.
Certainly these are all good and productive ways to use data to improve a casino’s bottom line; however, player development is rarely mentioned in these discussions. This omission has always puzzled me, because casino hosts, at least theoretically, manage the relationships of the casino’s most valuable customers.
After a recent focus group with a client’s casino host team, it dawned on me why player development is often omitted from these strategic planning discussions—some senior-level casino industry executives still view the hosting function as a non-strategic, reactive operating function instead of the proactive, sales-centric function that it should be. In many cases, the player development department doesn’t even report to the head of the marketing department; it reports through the table games department.
No matter where player development reports, you likely have an opportunity to extract significant revenue improvement from your VIP customer database by using simple data analysis coupled with a proactive sales approach to guest hosting.
Late last year, our firm was asked by a multi-property tribal casino operator in the upper Midwest to assist them with an overhaul of their player development program. The tribe owns and operates multiple casinos and restaurants, hundreds of hotel rooms, thousands of slot machines and table games, entertainment venues and even golf courses. They have all the amenities that would cater to VIP-level guests, but had hired only two casino hosts who had never been given any clear direction on how they should be spending their time.
In fact, they spent a good deal of time handling customer complaints, giving breaks to rewards-club representatives and generally serving as a “catch all” department when someone didn’t know how to handle a guest request. This left very little time for them to do the job for which they were hired—building relationships with high-value gamblers.
Neither host was thrilled with the direction of their careers. As we began working collaboratively with the hosts and the tribe’s management, the organization was totally committed to the process and the final player development strategy was reflective of that commitment and collaboration. By diagnosing the issues and creating a new plan, we utilized the following three steps to guide us through the process:
Define a VIP at your property and assign guests to hosts using a data-driven player development segmentation. Is a VIP a person who visits two or three times a week and is worth $50 a trip or is it a person who visits twice a year and spends $750 per trip? The answer is probably both, and is unique to your property and company based on your market, competitors and customers. How your team manages those accounts is what makes the difference in terms of maximizing the value created by your host team. In the case of the low-worth/high-frequency guest, hosts don’t need to spend a lot of time trying to convince them to visit more frequently. In fact, you may decide not to assign this type of guest to a specific host because everyone that works on property is their host. Everyone from the general manager to the slot attendant is likely familiar with these high-frequency guests and their preferences. On the other hand, the lower-frequency/high-value guest may be loyal to one of your competitors, and it’s the host’s job to convince that guest that there is value in consolidating his or her play at your casino. Simply put, your segmentation should be a guide to help your hosts focus their efforts on guests with revenue upside (new, low-frequency and inactive) and not just on “regulars.”
Make sure you have the right human resources and train them on techniques designed to drive desired guest behaviors within your player development segmentation strategy. Quickly manage out those that don’t buy in or just aren’t aggressive sales people. Train your hosts to liberally communicate and reinvest in new loyalty program enrollees that play at a VIP level. Empower hosts to comp rooms and other perks to guests that live regionally, play at a VIP level and don’t visit your property that often.
Hold your host team accountable for results. Set baselines and develop standard analysis designed to illustrate each host’s progress toward the goals of your player development segmentation strategy. Meet with each host on a regular basis and review progress relative to their assigned revenue targets within your segmentation. Use these meetings as an opportunity to understand any challenges they are having from a product or service perspective. Open lines of communication can go a long way in creating loyalty within your VIP customer base and your host team.
Because our client was totally committed to flawless execution of a data-driven, proactive player development strategy, the revenue results far exceeded client expectations. In the first five months after implementing the new player development strategy, VIP gaming revenue was up 30.4 percent year-over-year, which translated into millions in incremental gross gaming revenue. Needless to say, you have nothing to lose by using these simple and cost-effective techniques to steal VIP market share from your competitors within this highly profitable business segment.