Missing the Mark
by Dennis Conrad
Missing the Mark
Promotions that suffer from poor planning, lackluster execution and a lack of accountability fail to live up to customer or casino expectations
Dennis Conrad is the president and chief strategist of Raving Consulting Company, a full service marketing company specializing in assisting gaming organizations. He can be reached at (775) 329-7864 or by e-mail dennis@ravingconsulting.com. Visit Raving’s Web site at www.ravingconsulting.com.
If there is one thing that casinos do a lot of (besides advertising), it’s promotions. There are VIP promotions, players club promotions, tournament promotions, food promotions, hotel promotions, slot promotions, table game promotions and entertainment promotions. You’ll see bouncebacks, sweepstakes, “swipe and wins,” hot seats, bonus cash, sign-up incentives, comps, cash back, drawings, giveaways and mystery jackpots.
Yes, casinos have taken the art of promotions to unparalleled heights (some might say “depths”)—never has one industry spent so much on such a promotional artillery.
I certainly do believe that casinos need an effective package of casino promotions, and there are valid strategic reasons for conducting them. Certainly casino promotions can be used as a hook to drive property trials. They can increase player retention, whether that measurement is as a “share of wallet” or in extended gaming time. They certainly can increase play of casino VIPs, if the promotion adequately hits their hot buttons.
Promotions can also drive off-peak gaming activity, build customer loyalty, increase players club memberships, help meet a competitive threat, reactivate a lapsed player, build employee buy-in, enhance community relations, generate brand awareness, and help leverage co-op marketing dollars of various casino marketing partners (soft drink companies, beer vendors, slot manufacturers, etc.).
Problems with promotions
Wow, casino promotions sure do sound like the ultimate tonic for all that ails a casino!
But based on my extensive work in Casino Land over the years, the “casino promotion reality” that I have seen is much different. So with no ill will intended, and with apologies to those casinos who do use casino promotions profitably and strategically, allow me to share my opinions on the current state of casino promotions in North America:
Casino promotions are often too expensive. Sometimes this is a result of “one-upmanship” among casinos in competitive markets. Sometimes this happens because a casino originally over-invested in a promotion and is afraid of cutting back on subsequent editions for fear of customer backlash. Sometimes this is a result of poor (or no) analysis. Whatever the reason, I believe that most casinos greatly overspend on their casino promotions.
Casino promotions unnecessarily overlap in many instances. This usually starts innocently enough. The slot director wants to pump up mid-week business with a hot seat promotion. But then the hotel exec wants to fill some rooms, so a discounted (or free) room offer goes out to the casino database. Then business goes soft for a month and the general manager wants to offer double slot club points. And then…you get the picture—pretty soon the discounts have discounts, and things are freer than free (ask an “advantage player” how they exploit this overlapping promotional largesse).
Casino promotions are typically not very exciting. Well, they’re meant to be exciting, but usually staff are not skilled or trained as “funmeisters,” or somewhere around the 60th day of the promo, folks are getting a little tired of the (same old) hoopla.
Casino promotions are usually selected with little or no input from customers, and sometimes customers are given promotional prizes that they do not want or value. This is usually manifested in the Corvette giveaway at the rural casino with mainly senior gaming customers. Or in the $100,000 grand prize giveaway when customers would prefer a thousand prizes of $100 each. This disconnect can be avoided by one very simple tactic—ask your customers what they want, and give it to them.
Casino promotions generally have little understanding and involvement from frontline employees and little participation from senior casino executives. The acid tests here for your casino are simple. If a customer asks one of your employees about an ongoing promotion and gets a glazed look and an, “I dunno,” or they vaguely point towards the players club area, your promotional machine is probably not well oiled. And if your senior execs only want to see financial results from the promotion and not want to laugh and scratch with customers at the promotion, your casino is likely missing the boat as well.
Casino promotions are often poorly strategized and poorly measured with no real understanding of their ROI. Did your promotion drive real revenue? Or were the customers already coming in anyway? Did they spend incremental gaming dollars because of your promotions, or just shift their gaming budget to days where you threw a “promotional party” for them?
While the picture I may be painting of casino promotions excesses in North America may not be a pretty one, the good news is that if you can get your hands around your current promotional war chest and spend it in a customer-focused way on those players who are eagerly spending their gaming dollars with you, there may be a significant upside for you in your current promotional budget, and without spending a nickel more in marketing—a CFO’s delight.
