Casino Enterprise Management

John Kennedy infamously said that the Chinese word for crisis is composed of two characters and that “one represents danger, and the other represents opportunity.” While an etymological fallacy of the Chinese this expression’s point is nonetheless true; there exists opportunity in crisis. But remember, an “opportunity” can go both ways; an opportunity to succeed is also an opportunity to fail.

Scared? Facing the uncertain economic future, we all are. And it is in these tough economic times that your brand is most at risk and will require extra vigilance, investment, support and creativity to maintain or grow. The oft-repeated claims of our industry being recession-proof are no more accurate than Kennedy’s stumper.

There is a bright side. Consumers and businesses may have more limited budgets but that doesn’t mean they won’t spend money. In fact, it means that branding is more important than ever as those buyers will look to spend on brands with which they have relationships and that they know and trust will give them the most value for their more limited funds.

While in the face of economic difficultly it may be tempting to tighten to belt and ignore “luxury” business development investments like brand building, it is exactly such tough times during which strong branding efforts can prove most beneficial. In fact, increasing brand development during hard economic times means your investment goes further both in the real sense that media and resources are cheaper and in the competitive sense because your competitors may be cutting back. A study by the Strategic Planning Institute a decade ago showed that brands that increased their marketing spending during a time of recession generated an average return on capital of 4.3 percent, a full 3.7 percent more than for brands that simply maintained their pre-recession marketing budgets. (Meanwhile brands that cut their budgets saw negative 0.8 percent growth.)

Many brands already recognize this and, as you should be, are gearing up to take advantage. Some brands have already jumped on messaging that leverages these times to highlight what their brands have to offer under the circumstances. HBO just starting running a “Life hurts. Laughs help” campaign with messaging like “Your 401(k). Now down to $4K.”  Not missing out on the 401(k) message is Crate & Barrel, which is promoting its cookware as “Oven-proof. Dishwasher-proof. 401(k)-proof.” Equinox gyms, Walt Disney, Denny’s, and even Brooks Brothers are just a few of a wide range of names that are leveraging the downturn to turn up the spotlight on recession-positive characteristics of their brands.

Meanwhile, Kraft/Campbell’s is launching a new “Warm Hearts without Stretching Budgets” campaign in Nov. JCPenney’s new campaign is titled “Fall fashion is beautiful and affordable, only at JCPenney.” Other brands that have reported that they will drastically increase their brand campaign spends from 6 to 65 percent despite tougher times include Red Lobster, Applebee’s, Dunkin’ Donuts, Wal-Mart and Target.

And gaming is no different. State lotteries are already changing up their messaging and getting creative to appeal to potential players’ new attitudes about the times. For example, the Missouri Lottery is partnering with gas stations to offer gas discounts with a $2 ticket purchase; Iowa and Nebraska lotteries have set up Facebook marketing pages that feature videos of winners and jackpot information.

Keep in mind though that while reinforcing your brand in tough times can be valuable, completely changing your brand during such periods is excessively risky. Peter Yesawich Jr., director of interactive marketing for Karsh\Hagan Advertising, says don’t do it: “Your brand is your most valuable asset. A consumer’s perception of a changing brand and or product can be problematic. I may understand why you choose to offer new incentives as a brand in relation to difficult economic times, but I would recommend against the complete readjustment of a brand as a direct result of tough economic times.”

But first, what exactly is your brand? The term “branding” so often misunderstood that it might be good to start with a definition. Merriam-Webster defines a brand as “a class of goods identified by name as the product of a single firm or manufacturer.” While correct, this definition fails to identify how modern brands are living things, defined partly by what the brand owners or companies themselves want their brands to be, but also partly by how consumers and everyone else perceives that brand.

If you take away one thing from this article, it should be this: Branding is not advertising, but advertising is branding.

A brand is a combination of tangible services or products, and the added value those products are services are afforded because of their brand name. A brand is a source of strategic value that comes directly from identifying characteristics that can be leveraged or in some cases must need to be overcome. For example, fashion label Burberry has recently seen its high-end, blue-blood brand character change as its products are increasingly adopted by pop-culture connoisseurs. Regardless of how much Burberry executives might want to maintain the brand’s old school pedigree, the brand is being defined by the consumers.

Your brand is a strategic asset, not just a logo or a trademarked name. It may offer you a competitive edge or it may hinder. For example, a good brand will lend credibility to marketing communications efforts while those same communications will have to overcome their association with a badly perceived brand no matter the quality of the goods or services being offered. This is especially true in a recessed or tough economy where consumers value familiarity and stability. 

Here are some simple but important things to remember as you prepare your brand for the lean times ahead:

Assess Your Brand (Honestly)
Audit your brand the old fashioned way with a strengths and weaknesses assessment. Are you an Indian casino facing geographic limitations? Do you have a loyal, popular rewards program with good communication? Do consumers see you as a good value for the dollar? Yesawich recommends using the Internet to find out what’s being said about you: “Take a minute to Google search your brand. You will find things that you like and dislike. These avenues are the new wave of virtual comment cards.

Rank and File
Take all of your brand’s strengths and rank them according to which is most important. Do the same with the weaknesses. Take the Tattoo Test™ brand self assessment following this article. Elicit the opinions of others; remember, your brand is defined just as much by what others think of it as by what you think of it.

Make a Disaster Plan
In a worst-case scenario, what would you cut first? What characteristics of your brand are core to the overall business profitability? More importantly, which values and assets will you most want to still have when you come out the other side of the hard times? At worst, you want to make sure your brand does not suffer erosion that it will carry even after things turn around. This includes deterioration of clients’ opinions on value for their dollar and service associated with your brand. Your brand cannot afford this.

Maintain Your Core Positive Characteristics
You will be tempted to make cuts. These cuts will probably be to services or quality or something that is a core determiner of how your brand is received and thus how it is defined. Don’t do it.

…But if You Must Cut
If you’re faced with a need to balance a bottom line… or else… you will probably be tempted to look to some of the smaller details of larger services and products. While you might consider these small details “luxuries,” it doesn’t mean your consumers do. In some cases it is exactly the “little things” that separate a Mercedes from a Mercury. Recently, cutting comps has become a popular way to save. But how do your consumers, many of whom can probably play comp-free at home in front of their computers, feel about this? Eliminating some of the lower-loss per hour VIP tables may seem like a good idea, but will slots players who never even play tables see such a move as a decrease in a casino’s overall quality? Maybe. A non-casino branding example of this is BMW. The carmaker brand now makes a line of affordable sub-$20,000 cars on which it turns a tidy profit. But the brand must still manufacture its super-lux top-end flagship models to maintain its brand’s high regard and thus make its lower-priced offerings so attractive.

The point is check first with your customers about just how important that detail is. Also, query your employees on how these cuts might be received; in belt-tightening times, employees are an effective and inexpensive form of market research.

Be Different
Yesawich says that you’re going to have to focus more on differentiating your brand: “Guests are not only traveling shorter distance but also spending less. However, the devoted customers are making a conscious effort to come back for more. Target incentives to specific clientele and eliminate waste. Anybody can join a club, but why yours? Why is your club different? How does your organization make me feel unique? Each tier of customer has a completely different set of expectations for a brand and expects to be treated/rewarded accordingly.”

Don’t Wal-Mart Yourself
During hard times it will be tempting to use discount pricing to maintain visitor levels. But remember that the danger of competing on price alone translates to your brand and risks that brand becoming known as a “discounter.” When the economy recovers, your brand might not, and you will have lost a great deal of brand value. Instead of competing on price, try to find a way to add benefits to increase value, such as comps. If you must discount, do so through a rewards program that doesn’t connect price competition directly to your brand.

Look for Strengths in Weakness
Altered states, such as a recessed economy, present opportunities for brands to find strengths in former weaknesses. Are you a California Indian casino that formerly had a hard time competing with Vegas’ razzle dazzle? Well, high gas and travel costs may now make your location more attractive if you communicate that your brand is looking to fill the consumer void, e.g., “We don’t have flying Frenchmen on fire, but we do have your favorite slots.” Look at your list of weaknesses and try to think of how a changed spending environment may change them into strengths.

“Employ” New Tactics
Like it or not, your consumer-facing employees do more to define your brand than some of your advertising. But you can make them brand champions by making it clear that in the face of tough times you are all in the same brand boat. Invest them in the brand’s success and they, as brand owners, will take a more brand-nurturing role. Note: “Investing” employees in the brand they serve does not mean explaining how brand failure means they will lose a job; no brand benefits from those championing it from a defensive position. Instead, be honest and explain that these are tough times but that in their positions they have a great deal of influence in how the brand weathers the storm. Make them feel powerful and invested, and they will be your brand’s greatest strengths.

Things May be Bearish, but Don’t Hibernate
It is certainly tempting to doze through the downturn and ­­focus on stop-loss. But when things turn around, you’ll want to hit the road running. Maintain your research facilities and budgets as much as possible. Keep track of what competitors are developing. Remember, your competitors’ brands are suffering through this too; by managing to maintain brand strength over this time you can still come out ahead, comparatively.

Plan for the End of the Tunnel
Make a detailed plan of action of how you would develop your brand in a better economic environment with no budget restrictions. Don’t be vague; detail each action by goal and potential cost. This will be your go-to guide when things start looking better.

Tattoo Test™
Whether your organization is a start-up or thriving business with many brands, all business leaders should periodically perform a Tattoo Test™ or some similar assessment to determine the potency of their brand, the depth of the channel (i.e., retail, wholesale, licensing, online), its reach, visibility level, and its impact on their business model.
While this test addresses many elements of a solid brand, it is not a quantitative study. Within every industry and market scope there are specific issues and factors that may need to be added to enhance validity of this exercise.

Scoring
Count the number of “YES” responses to the test to the right.

60-79  (Solid Brain Tattoo)
Congratulations! You are breathing your brand. It’s established, strong and working for you. Keep your eye on those outside factors, modify as needed, and pat yourself and your staff on the back. Great job!

30-59  (A Baby Brand Ready to be Born)
You have the seeds to grow a strong brand. However, you’ve got work to do. Start today. Invest time in brand planning, continue nurturing, amp up your commitment, and add some additional branding fuel to your engine.

0-29 (Barely a Brand)
You are missing huge opportunities to expand your success. All facets of your business may become more difficult. Customer acquisition may rise along with customer defection. What are you waiting for?
 

The Tattoo Test was excerpted with permission from Brain Tattoos: Creating Unique Brands That Stick in your Customers’ Minds (AMACOM) by Karen Post. Post, a.k.a. The Branding Diva®, is an international authority on branding, marketing, and entrepreneurial matters. Her work has benefited large and small organizations in the United States and around the world. For more information, visit www.brandingdiva.com.

Abram Sauer is the Associate Editor for Casino Enterprise Management. He can be reached at editor2@aceme.org or at (701) 293-7775.