Fact-finding mission
Fact-finding mission
Business intelligence software and strategies are helping casinos realize the value of their customers, operations
By Steven Marlin
When Hurricane Katrina hit, the last thing anyone in the gaming industry expected was that within a month, players would be flocking from the stricken Gulf Coast casinos to properties further inland. Yet that's exactly what happened, and Pearl River Resort was ready. The Choctaw, Miss.-based establishment saw an influx of customers from New Orleans, Biloxi, Hattiesburg-even as far away as Pensacola.
Pearl River immediately swung into action with its business intelligence system, which susses out minutiae about customer buying behavior, such as the games they play, how much they're likely to spend and their hotel and eating preferences.
The software, from SAS Institute, sifts through data generated by the hotel's reservation, point-of-sale and finance and accounting systems. The software enabled Pearl River to start a direct marketing campaign in the areas hit by Katrina, pinpointing such variables as winnings per individual and revenue per guest.
"The business intelligence system guarantees that we can identify emerging markets sooner," said John Enriquez, Pearl River's vice president of information systems.
In the year since installing the SAS software, Pearl River Resort has centralized its data gathering and intelligence systems. Its first order of business was maximizing revenue. SAS guest intelligence modules were activated; they include acquisition, retention and reactivation, total guest value, segmentation and profiling, and campaign and loyalty management.
The system replaces guesses with hard numbers. "This is not only the future of Pearl River, but the future of the industry," Enriquez said.
Down to details
Business intelligence systems enable casino executives with no experience in quantitative analysis to make forecasts and crunch numbers. For smaller casinos, it provides a way to manage revenue through custom-tailored promotions and guest experience management. For larger casinos, it provides a uniform method for gathering and reporting intelligence across multiple properties.
Understanding such idiosyncrasies as the number of children a player has in college (implying the player will have less disposable income for gambling), enables establishments to more quickly identify potential high rollers.
"With a good level of accuracy, casinos can predict the ebbs and flows of a player's gambling," said David Paster, strategic database marketing manager at National Hirschfeld LLC, a consulting firm.
What the casino industry is doing with business intelligence is not very much different than what banks, airlines, retail stores, consumer goods and other industries are attempting to do. "They're all trying to get more share of a person's wallet," said Mark Morton, senior manager of business intelligence product marketing at software provider Cognos. "By using business intelligence, they're able to examine people's tastes and interests, and craft programs accordingly."
Previously, Pearl River Resort's player tracking system had performed some of these functions, such as segmentation. For top tier players, the system would create a file, then send it to the print shop, where promotional offers were mailed out. Today, all of that reporting and analysis is done in SAS. The SAS software provides a data warehouse that stores data on every aspect of the guest experience, not just gambling. SAS includes predictive analytics components that the hotel can use to build revenue models. Pearl River also uses it for performance management, including profitability analysis, executive scorecarding, financial budgeting, consolidation and reporting.
Pearl River hired Qualex Consulting Services to aid in the SAS implementation. Qualex helped Pearl River consolidate data from its player tracking, slots, hotel, and retail systems to provide a full view of activities on the property.
"The systems had data hygiene issues, meaning that the same customer was being referenced by different systems in different formats," said Mario Perkins of Qualex Consulting Services. "We cleansed the data, enabling the casino to gain a total guest view, as well as formulate more efficient marketing campaigns."
Competition, indeed, spurred Pearl River Resort's business intelligence effort from the day it opened in 2002.
"We knew that CRM and business intelligence would be the cornerstone of our new marketing strategy," Enriquez said. "But it was also difficult to select, implement and execute."
Enriquez selected SAS as the system that could consolidate data from its hotel, player tracking and retail systems into a single data warehouse. He implemented the business intelligence as discrete components, or "buckets," including data warehousing, online analytical processing, content management and analytics.
"We wanted one vendor to master all the buckets," Enriquez said.
Combined efforts
At larger casinos, a one-size-fits-all solution isn't feasible, so they've adapted different products to perform specialized functions. Harrah's, for example, uses business intelligence systems from SAS and Cognos to centralize those functions for its properties. It uses a data warehouse built with software from NCR Teradata.
Harrah's has been able to better target its marketing campaigns and offer tailor-made packages to clients based on their individual gaming preferences. For example, Cognos' cross-market analysis has revealed that players enjoy moving from resort to resort and city to city, allowing for more options when building special offer programs.
By uncovering trends in the data, business intelligence systems allow Harrah's to determine the destination, dining and gaming choices of its customers, and create customized special offer programs. It allows Harrah's to have, "one version of the truth," said David Norton, Harrah's senior vice of marketing.
The Teradata data warehouse provides the platform for storing customer data, Cognos is used to build hundreds of standard reports for use across all of Harrah's properties and SAS performs the number crunching. CRM modules from Compudigm International also help analysis of the company's dozens of casino floors. Harrah's employs a pool of statisticians to interpret the numbers and analyze the effectiveness of marketing campaigns.
"We can answer questions like, 'How do customers really behave as opposed to what's predicted? Are customers changing their behavior and taking into account what we communicate to them?'" Norton said.
Harrah's focus on the business intelligence aspects of customer relationship management sets it apart from most other gaming companies.
"We have a competitive advantage based on technology," Norton said. "A lot of our competitors have put together loyalty programs, but they're focused on the facility as opposed to the entire enterprise."
Caesars, which is now part of Harrah's, had a data warehouse, "but the depth of marketing savvy wasn't there," Norton said. "That's what we're providing." The focus, he said, is on revenue stimulation as opposed to cost cutting.
Financial focus
Revenue management is the buzzword these days, as more casinos fight over chunks of existing business, said Suzanne Fiero, SAS's business development manager for travel, hospitality, and entertainment.
"Guest intelligence and player tracking are huge," she said.
Revenue management has proven to be among the most contentious issues in the industry. At a recent SAS roundtable in Las Vegas attended by representatives from MGM Mirage, Venetian, Harrah's and other chains, a big debate arose over whether room rates and other charges should be graded according to player revenue.
"Some casinos felt the practice was unfair, but the consensus was that most wanted to do it," Fiero said.
This year, casinos are deploying business intelligence systems to focus on a 360-degree guest view and customer loyalty management. Also, gaming companies fall under Patriot Act compliance, requiring financial institutions to report on suspicious activity. "The same technology used by financial institutions for detecting money laundering can also be applied by gaming operators to detect suspicious activity," Fiero said.
There can be little doubt that the confluence of forces-more casinos chasing after customer dollars, a growing awareness of the value of data generated by computer systems, and the power and usability of data mining tools-will cause the gaming industry to sharpen its business intelligence capabilities. Most customer relationship management initiatives fail because of inattention to the problem of harvesting data from multiple systems.
Noted Pearl River Resort's Enriquez, "Twenty-five years ago there was no riverboat gambling and little need for a data warehouse, but with the increased competition, the need for a comprehensive, well-implemented customer relationship management solution is a must."
Sidebar:
Staying on target
All the software in the world won't aid business intelligence campaigns with the wrong mindset
The tools for business intelligence are powerful, but must be used intelligently if they are to produce results.
Jerome Mandel, director of database marketing at Ameristar Casinos, spent 11 years honing his skills in direct marketing at Chase Manhattan Bank. His group of statisticians also have deep experience in database marketing. That critical mass of knowledge has enabled Ameristar to leapfrog its competitors. "We believe we're very advanced in this, and do a better job targeting customers," Mandel said.
Mandel uses software from Unica Corp. to generate lists of customers for target marketing; he eschews purchasing lists from database marketers, claiming they're worthless in a local market.
"Unlike the case with a destination resort, externally-purchased lists don't work in a local model," he said. "All of our data is produced internally."
Mandel recommends that data be carefully mined from operational systems, then analyzed with business intelligence software independent of the operational systems. He also emphasizes the need for quality control. One major casino chain, he noted, had a snafu in its letter shop that caused it to mistakenly send out promotional offers worth $2,500 instead of $500.
-Steven Marlin
Business intelligence software and strategies are helping casinos realize the value of their customers, operations
By Steven Marlin
When Hurricane Katrina hit, the last thing anyone in the gaming industry expected was that within a month, players would be flocking from the stricken Gulf Coast casinos to properties further inland. Yet that's exactly what happened, and Pearl River Resort was ready. The Choctaw, Miss.-based establishment saw an influx of customers from New Orleans, Biloxi, Hattiesburg-even as far away as Pensacola.
Pearl River immediately swung into action with its business intelligence system, which susses out minutiae about customer buying behavior, such as the games they play, how much they're likely to spend and their hotel and eating preferences.
The software, from SAS Institute, sifts through data generated by the hotel's reservation, point-of-sale and finance and accounting systems. The software enabled Pearl River to start a direct marketing campaign in the areas hit by Katrina, pinpointing such variables as winnings per individual and revenue per guest.
"The business intelligence system guarantees that we can identify emerging markets sooner," said John Enriquez, Pearl River's vice president of information systems.
In the year since installing the SAS software, Pearl River Resort has centralized its data gathering and intelligence systems. Its first order of business was maximizing revenue. SAS guest intelligence modules were activated; they include acquisition, retention and reactivation, total guest value, segmentation and profiling, and campaign and loyalty management.
The system replaces guesses with hard numbers. "This is not only the future of Pearl River, but the future of the industry," Enriquez said.
Down to details
Business intelligence systems enable casino executives with no experience in quantitative analysis to make forecasts and crunch numbers. For smaller casinos, it provides a way to manage revenue through custom-tailored promotions and guest experience management. For larger casinos, it provides a uniform method for gathering and reporting intelligence across multiple properties.
Understanding such idiosyncrasies as the number of children a player has in college (implying the player will have less disposable income for gambling), enables establishments to more quickly identify potential high rollers.
"With a good level of accuracy, casinos can predict the ebbs and flows of a player's gambling," said David Paster, strategic database marketing manager at National Hirschfeld LLC, a consulting firm.
What the casino industry is doing with business intelligence is not very much different than what banks, airlines, retail stores, consumer goods and other industries are attempting to do. "They're all trying to get more share of a person's wallet," said Mark Morton, senior manager of business intelligence product marketing at software provider Cognos. "By using business intelligence, they're able to examine people's tastes and interests, and craft programs accordingly."
Previously, Pearl River Resort's player tracking system had performed some of these functions, such as segmentation. For top tier players, the system would create a file, then send it to the print shop, where promotional offers were mailed out. Today, all of that reporting and analysis is done in SAS. The SAS software provides a data warehouse that stores data on every aspect of the guest experience, not just gambling. SAS includes predictive analytics components that the hotel can use to build revenue models. Pearl River also uses it for performance management, including profitability analysis, executive scorecarding, financial budgeting, consolidation and reporting.
Pearl River hired Qualex Consulting Services to aid in the SAS implementation. Qualex helped Pearl River consolidate data from its player tracking, slots, hotel, and retail systems to provide a full view of activities on the property.
"The systems had data hygiene issues, meaning that the same customer was being referenced by different systems in different formats," said Mario Perkins of Qualex Consulting Services. "We cleansed the data, enabling the casino to gain a total guest view, as well as formulate more efficient marketing campaigns."
Competition, indeed, spurred Pearl River Resort's business intelligence effort from the day it opened in 2002.
"We knew that CRM and business intelligence would be the cornerstone of our new marketing strategy," Enriquez said. "But it was also difficult to select, implement and execute."
Enriquez selected SAS as the system that could consolidate data from its hotel, player tracking and retail systems into a single data warehouse. He implemented the business intelligence as discrete components, or "buckets," including data warehousing, online analytical processing, content management and analytics.
"We wanted one vendor to master all the buckets," Enriquez said.
Combined efforts
At larger casinos, a one-size-fits-all solution isn't feasible, so they've adapted different products to perform specialized functions. Harrah's, for example, uses business intelligence systems from SAS and Cognos to centralize those functions for its properties. It uses a data warehouse built with software from NCR Teradata.
Harrah's has been able to better target its marketing campaigns and offer tailor-made packages to clients based on their individual gaming preferences. For example, Cognos' cross-market analysis has revealed that players enjoy moving from resort to resort and city to city, allowing for more options when building special offer programs.
By uncovering trends in the data, business intelligence systems allow Harrah's to determine the destination, dining and gaming choices of its customers, and create customized special offer programs. It allows Harrah's to have, "one version of the truth," said David Norton, Harrah's senior vice of marketing.
The Teradata data warehouse provides the platform for storing customer data, Cognos is used to build hundreds of standard reports for use across all of Harrah's properties and SAS performs the number crunching. CRM modules from Compudigm International also help analysis of the company's dozens of casino floors. Harrah's employs a pool of statisticians to interpret the numbers and analyze the effectiveness of marketing campaigns.
"We can answer questions like, 'How do customers really behave as opposed to what's predicted? Are customers changing their behavior and taking into account what we communicate to them?'" Norton said.
Harrah's focus on the business intelligence aspects of customer relationship management sets it apart from most other gaming companies.
"We have a competitive advantage based on technology," Norton said. "A lot of our competitors have put together loyalty programs, but they're focused on the facility as opposed to the entire enterprise."
Caesars, which is now part of Harrah's, had a data warehouse, "but the depth of marketing savvy wasn't there," Norton said. "That's what we're providing." The focus, he said, is on revenue stimulation as opposed to cost cutting.
Financial focus
Revenue management is the buzzword these days, as more casinos fight over chunks of existing business, said Suzanne Fiero, SAS's business development manager for travel, hospitality, and entertainment.
"Guest intelligence and player tracking are huge," she said.
Revenue management has proven to be among the most contentious issues in the industry. At a recent SAS roundtable in Las Vegas attended by representatives from MGM Mirage, Venetian, Harrah's and other chains, a big debate arose over whether room rates and other charges should be graded according to player revenue.
"Some casinos felt the practice was unfair, but the consensus was that most wanted to do it," Fiero said.
This year, casinos are deploying business intelligence systems to focus on a 360-degree guest view and customer loyalty management. Also, gaming companies fall under Patriot Act compliance, requiring financial institutions to report on suspicious activity. "The same technology used by financial institutions for detecting money laundering can also be applied by gaming operators to detect suspicious activity," Fiero said.
There can be little doubt that the confluence of forces-more casinos chasing after customer dollars, a growing awareness of the value of data generated by computer systems, and the power and usability of data mining tools-will cause the gaming industry to sharpen its business intelligence capabilities. Most customer relationship management initiatives fail because of inattention to the problem of harvesting data from multiple systems.
Noted Pearl River Resort's Enriquez, "Twenty-five years ago there was no riverboat gambling and little need for a data warehouse, but with the increased competition, the need for a comprehensive, well-implemented customer relationship management solution is a must."
Sidebar:
Staying on target
All the software in the world won't aid business intelligence campaigns with the wrong mindset
The tools for business intelligence are powerful, but must be used intelligently if they are to produce results.
Jerome Mandel, director of database marketing at Ameristar Casinos, spent 11 years honing his skills in direct marketing at Chase Manhattan Bank. His group of statisticians also have deep experience in database marketing. That critical mass of knowledge has enabled Ameristar to leapfrog its competitors. "We believe we're very advanced in this, and do a better job targeting customers," Mandel said.
Mandel uses software from Unica Corp. to generate lists of customers for target marketing; he eschews purchasing lists from database marketers, claiming they're worthless in a local market.
"Unlike the case with a destination resort, externally-purchased lists don't work in a local model," he said. "All of our data is produced internally."
Mandel recommends that data be carefully mined from operational systems, then analyzed with business intelligence software independent of the operational systems. He also emphasizes the need for quality control. One major casino chain, he noted, had a snafu in its letter shop that caused it to mistakenly send out promotional offers worth $2,500 instead of $500.
-Steven Marlin
