A Marketing Miracle
by Dennis Conrad
Columns
A Marketing Miracle
The vision of Jon Lucas has been key to the IP Biloxi’s stunning transformation
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.
Well, it may not have been a miracle, but it certainly is one of the best casino business “turnaround” stories that I have ever heard about and I think it contains great lessons for your own casino or your own company.
Here’s the story.
The Imperial Palace in Mississippi was built on the “Back Bay” near Biloxi, Miss., around the turn of the century by the late Ralph Engelstad, owner of the Imperial Palace in Las Vegas. It was built in the image and likeness of the Vegas IP, a design style that might fairly be called an “industrial strength Asian theme.”
The Imperial Palace Mississippi struggled immediately after opening. It had an inferior location a couple of miles off the Biloxi Gulf Coast beachfront, where significant competitors Grand Casino, Casino Magic, Isle of Capri and Beau Rivage (among others) were located. It had a bland, stark facility with few amenities. Its food product paled in comparison to other nearby casinos. It couldn’t attract superior employees and those that did sign up to work at the Imperial Palace Mississippi settled into it being “just another job.” The irascible owner insisted on running the property like it was in Las Vegas and his formula for “cheap rooms, cheap customers” soon made the Imperial Palace the tacky choice in the market.
Then Ralph Engelstad died. The executors of his estate were faced with the choice of selling this underperforming casino asset or somehow, some way, finding a miracle worker to turn it around.
Enter Jon Lucas.
The man with the plan
Jon was a well respected, senior gaming operator from Caesars Entertainment, who became available as a result of the Harrah’s buyout of Caesars. Approached by the Imperial Palace executors, Jon did what any savvy gaming executive would do—he went to experience the Imperial Palace as a customer. It was not a pretty picture and Jon minced no words in reporting back bluntly to the estate managers. Furthermore, he told them the property needed a lot of money to be competitive, and if they were not prepared to make that commitment, then he was not the guy to help them.
To their credit, the estate executors made that commitment and used Jon Lucas to make the Imperial Palace imperial for the first time. He began the long and arduous process of analyzing the customer base and the marketing, cleaning up the place, putting his senior team together, tackling the issue of the poor food product.
And then Katrina hit the Gulf Coast.
No one was spared from Katrina including the Imperial Palace. But its Back Bay location, a few precious miles away from the Gulf, and its sturdy building, now a benefit rather than just a bland design, spared the Imperial Palace from the terrible fate of the other Biloxi/Gulfport Casinos. They were all destroyed.
The Imperial Palace now had a huge competitive advantage and could have exploited that to open quickly and make as much money as possible in a short-term monopoly environment in the Gulf Coast. But Jon Lucas had a vision and a plan.
He allowed the Imperial Palace to be used first as a hotel for relief workers dealing with the Katrina devastation. He sought to build bridges with the community, which desperately needed assistance and with which the Imperial Palace had had a previous strained relationship. He started remodeling the hotel rooms in preparation for a reopening. He added restaurants. He hired new managers and new employees (who were happy to have a place to work) from the more service-oriented casinos in the area, while retaining as many original Imperial Palace employees as he could. Jon and his team changed not only a building, but an entire culture, reflected aptly in its new name, the IP Casino Resort Spa. It reopened just before Christmas of 2005, not even four months after Katrina.
And today? Well, I stayed at the IP recently. The rooms were well appointed and comfortable. The food was excellent and the restaurant “32” (on the 32nd floor) was remarkable. The spa was outstanding and the casino was busy (and I enjoyed the 20x odds on craps). There were lounges and nightclubs and Starbucks and gift shops and the entire IP transformation was stunning (I had been to the old Imperial Palace pre-Katrina).
Secrets to success
I ran into Jon Lucas and asked him his secret for his remarkable IP success, which is holding even as Harrah’s, MGM Mirage and Isle of Capri re-build their Gulf Coast businesses. And he boiled it down to this:
—Broaden the amenities to attract a broader customer base with more money to spend.
—Create an excellent food product.
—Get your hands around the marketing and target the right customers.
—Dramatically improve customer service and hire service-oriented employees.
—Have a management team that buys into your vision and executes the plan.
—Get meaningfully involved in the community and give back in a meaningful way.
“Worst to First,” as simple as that. Congratulations, Jon Lucas and the entire IP team. It may not be a marketing miracle, but it’s pretty damn close.
