By almost any economic indicator, we are facing unprecedented times in the modern casino industry. The mega casinos in Las Vegas and the Vegas-style casinos across the U.S. and the Bahamas have heretofore been relatively insulated from the economic downturns of the recent past. But this recession is different; it has squarely struck the casino industry.
Most practicing casino marketing executives have not faced this situation before. With some exceptions, the gambling population has historically filled new and existing casinos almost on command, responding to direct mail and e-mail offers that rarely discriminated between individual customers’ preferences and to advertisements and media campaigns designed to entice mass experience seekers. In a pinch, these traditional marketing channels offered discounts for rooms, shows, restaurants or other amenities available at the casino. In short, more activity bred more success.
To gauge where your marketing operations stand, begin by asking yourself these questions about your sources of revenue and your customers:
• What percent of your total gambling revenues can you trace back to specific customers? If it is less than 60 percent, you don’t know your customers and, more importantly, they don’t know you.
• If someone is playing max coin on one of your $1 or $5 machines without a player’s club card inserted, how long does it take for a slot host to introduce himself to that player? Same question for a green cheque table player.
• What do you know about your customers’ personal preferences? Not just the customers assigned to a casino host, but the card carriers who are not assigned to a host?
• And finally, do you customize your communications to speak directly to your customers’ individual interests? Or are you sending one-size-fits-all invitations to your player base?
Our observation is that many casino marketing and operations executives don’t spend enough time in a room together asking and answering these questions. Why together? Because marketing executives are in charge of establishing the communications and expectations that get customers through the door. And operations is in charge of paying off those expectations in ways that build brand insistence. If this effort isn’t totally integrated, the customer will feel a disconnect between the marketing promise and the operational delivery.
The fact is, the gaming market has contracted and the average spend per customer has shrunk. However, it is also a fact that people are still gaming, eating and recreating. The future belongs to those properties that can increase their share of the existing market and build a meaningful relationship with their existing and new customers. The first thing to do: Step into the 21st century. Here’s a peak at those new customers you are looking to entice, what they are looking for and how to communicate with them.
Today’s customers are willing to be loyal, but they want reciprocal loyalty. When your current customers see endless prospecting for new customers with offers they don’t even receive, they are turned off. Do you know the amount of marketing money you spend earning the loyalty of your existing customers versus the amount of money you spend seeking new customers? Marketing experts who think about this stuff estimate that it costs 15 to 40 times more to find a new customer than it does to keep an existing customer. These same experts will tell you that more than 75 percent of your “satisfied” customers will change brands for a better offer.
Today’s customers are also much savvier than those of the 20th century. They don’t open or read their mail like they did in the past. They spend far more time on the Internet than they do watching television and reading newspapers or magazines. They are discussing your brand openly and honestly from the customer point of view. Are you part of this dialog? Are you listening? The fact is, nearly 90 percent of today’s consumers read online reviews by other past customers before they make a purchase decision.
If you want to speak with your existing customers and attract new, higher-value customers, you need to talk to them through their channels and in their language. This means you must engage in sophisticated Internet marketing. We know, you already do Internet marketing, right? You have a cool website. Your website has been optimized. You spend money for pay-per-click marketing to drive consumers to your cool website. You probably have a search engine marketing and optimization company making sure you are seen. You send out e-mail invitations to your database. You probably even engage in social media and ePR (electronic public relations). The concept of Web 2.0 rolls off your tongue like the concept of market segmentation. All true?
Our experience is that most marketing executives understand these buzz words. They have added an “Internet marketing budget” to their overall marketing budget. Many have even hired a director and staff to oversee these efforts. However, they have not truly integrated their Internet marketing efforts throughout the entire marketing-operations-communications processes.
Here are some points to consider when determining how sophisticated your Internet marketing efforts are: You have a website. But, do you know your “look-to-book” ratio? Do you manage it? Do you know how consumers find your site? Do you know where the most valuable real estate is on your site? The least valuable? Does your website link to your booking engine, or do you lose valuable customer information when they click the “book now” button? Is dynamic packaging easy on your website? Can a visitor sign up for promotional newsletters, offers and other communications? If yes, do you gather any information to help you target these communications? Do you know if someone is a repeat guest without them putting in an identification number and password? Can you track your marketing efforts (all of them) through your website traffic? What about the number of visitors and how they got there? And then who booked? If you can do all of these things, you can begin tracking the ROI of your marketing dollars by program and distribution channel. (The rest of the tracking takes place during their visit, which will be the subject of our next two articles.)
You have optimized your website and are engaged in SEM (Search Engine Marketing). But, do you put all of the press articles written about your casino on your website? How many keywords are you tracking? We track more than 1,500 for a 150-room boutique hotel. Hopefully you are thousands of words better than that! The reality is that SEM is only one component of the game. Search Engine Optimization (SEO) is another tool that marketers can utilize to leverage their online presence. This is a science. Marketers can pay for traffic, but the traffic you drive naturally and organically through searches is equally as important. The way people engage in paid search versus natural search can vary greatly. So you need to be smart and accommodate for both types of searchers.
You are involved in social media and have a Facebook, MySpace and Twitter page, but do you know what people are saying about your brand online? Are you sure that your organization understands that engaging consumers in sharing content and experiences will ultimately build revenue through brand building? Most marketers are still blind to the sheer power that social media has. Look at sites like TripAdvisor.com. It is easy for potential customers to be deterred from staying at a hotel in a city they know little or nothing about and all they have to go off of is customer reviews. Do you actively manage social networking marketing plans as well as track ROI and conversational media sweeps? The point here is that everything we do online is tangible; it warrants a result, an activity, a response. How do we take that data and make it actionable for campaign and optimization purposes? The answer is simple: Utilize analytics to show the bigger picture. Show us what we as marketers are missing.
You have a substantial pay-per-click budget. But, what percent of your total media budget does it represent? Depending upon your organization, these budget breakouts differ from property to property. On average, smart hoteliers and marketers who see the power in driving results online are typically allotting about 10 percent to 25 percent of their marketing budgets toward online marketing. This could be a combination of many different online marketing mediums—search marketing, social networking, ePR, e-mail marketing, mobile marketing, digital signage installations, and website design and development. Interactive marketing budgets are increasing because everything can be tracked, changed and monitored in real time. Say goodbye to direct mail, print and outdoor advertising. You cannot come close to tracking these media placements as well as you can track what’s happening on the Web. Imagine getting a report card every week or once a month with tangible, real number ROI.
Oh yeah, you send out a lot of e-mails. But, how do you segment the lists? By past hotel guests, slot players, reward cards? How about by personal interests? How about by total value, not just past casino ratings? Do you know who responds to these e-mails and which offers they respond to? What about which offers they do not respond to? Does a past guest get the same rate they see on Expedia.com? Or on your website? Is there a difference between the guests who are in your hotel because they responded to an e-mail communication and guests who simply booked online (or through a travel agent or any other distribution channel)? Do you know what that difference is? Are your response rates declining? If yes, is your list fatigued or are your offers less relevant? Or did a smart competitor get your customer? Or maybe your former customer doesn’t have the money to visit you in this economy?
Billy Joe Kent III responds to one of your offers to see a show and spend two nights in your hotel. He has a player-tracking card with him and is a solid BJ player with a $65 average bet. Do you communicate with him during his visit? If yes, it is with a preprinted form letter in his room or a mobile text asking how his stay is and if there is anything the hotel can do for him? When he leaves the hotel at the end of his stay, what communication does he get from you? Electronic trip evaluation form? A link to TripAdvisor.com? Do you know where he spent his money besides in the casino and on the room/show package? If he ate in your restaurant, did he like it? How about his spa experience? Did he like the show? How many trips per year does he take that involve a casino experience? Do you know how many of those trips he spends with you (your capture rate)? Is all of this information linked into your database so you can speak more personally to Billy Joe next time?
There is no secret that online works, it’s just a matter of understanding how it works for you and your business based on business objectives set forth by your internal marketing and advertising departments.
We hope we have stimulated some of you into thinking about the “new” marketing and the “new” customer. Yes, we are in a very difficult economic environment, but that doesn’t mean everyone has to suffer equally. Gamblers may not be spending $450 for a bottle of Grey Goose, but they are still buying cocktails. They may not be spending $250 per person for dinner in a celebrity chef restaurant, but they are still eating. The goal is to win the market share war but only with the higher-value customers. In our next two articles, we will write more about how to get more consumers through your door, and then focus on how to identify the most valuable ones and turn them into brand insistent customers.
Peter C. Yesawich Jr. is Vice President of FL-2 interactive. His previous marketing experience includes work with several large operators and marketing firms. He can be reached at pyesawichjr@gmail.com.
Mark van Hartesvelt is one of the founding partners of Gemstone Hotels and Resorts and one of the founding principals of gCommerce Solutions. He has worked extensively in the gaming and hospitality industries for more than 15 years, working for companies such as Pratt Hotel Corp, Sands, Resorts International and Harrah’s. He can be reached at mark@gemstoneresorts.com.
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