THE BACK PAGE: Heard at Host Development
by Charles Anderer
September 26, 2012
Late July is
Casino Marketing time, as in the annual conference that we co-present with
Raving Consulting that is probably one of the fastest growing events in the
industry. That’s for a couple of reasons.
Dennis Conrad, Steve
Browne and the Raving team do a fantastic job on the content side. And the
industry has recently and permanently entered a marketing-intensive phase which
puts a premium on the questions that are relentlessly posed at this conference:
Who are your best customers, how do you keep them, and how do you find more of
them.
This year’s event was prefaced by a day-and-a-half long
Host Development Conference, where we got into the nitty gritty. Some of the
findings:
•Your hosts need goals: “A
salesperson without a sales goal is like a sailor without a boat.” Like many of
the things Steve Browne says, no explanation needed.
• Selling forward: “Don’t
start with the product and sell backward to the customer,” said Browne. “Start
with the customer and sell forward. By matching your benefits to their buy
factors you drive the buy decision.”
This reminded me of what made IBM a great company in the
60’s and 70’s. Thomas J. Watson was obsessed with customer needs and built his
whole organization, including products and services, around what his
salespeople learned about customers in the field. They didn’t always have the
best products, but they were always seen as far more responsive to customers.
When other companies tried to mimic IBM, including by stealing their
salespeople, they fell flat on their faces because all they changed was their
selling tactics and they left product development alone.
• Everyone’s favorite John Romero
quote: “Never tell a customer what you’re going to give them, tell
them how it’s going to make them feel.”
• Characteristics of active players: Nicole Barker, Raving’s database and loyalty
marketing specialist, said 70 percent of active players at the average casino
did not visit the property in the last month. They generally have fixed budgets
and experience with other properties. Most players visit the property from zero
to three times per month.
• The sweet and sour spots for player
development: Low frequency, high
ADT players are where sales hunters should be spending their time. High
frequency, low ADT players are costing you money. Don’t be afraid to fire them
if you deem them unprofitable.
• How do you calculate ADT? Average bet X Time played
X Game pace X house edge, per Dr. Eliot Jacobson, Raving project
partner.
• Why table game players ADT is especially difficult to
calculate: Average bets vary considerably; difference in player
skill impacts house edge; and game pace depends on variables such as how many
people are at the table, dealer and player styles.
• Why slot player ADT can also miss the mark: Slot
ADT is calculated based on max coin, but not all players bet the
max.
• What are casinos selling? “Risk is what is entertaining
about casinos,” said Jacobson. “The price of risk is the house
edge.”
• What is it
about humans that make us like risk? It’s in our genetic makeup, which probably explains why the demand for
gambling has been so stable since the beginning of time. “The history of the
survival of the species is about risk. We’re all adrenalin junkies.” That said,
Jacobson added that the average adult consumes less than a tablespoon of
adrenaline over the course of a lifetime. I thought we could do better than that
as a species, but no.
• The irrationality of players: Jacobson cited a Penn
Jillette quote about luck: “Luck is probability taken personally.” Players, no
matter how much they frequent a casino or how many times you explain the basics
to them, believe in hot and cold machines, trust in their ability to make
decisions that impact outcomes and discount randomness. It’s probably better
for business that way.
•
Who’s worth more, the $100 per hand blackjack player or the $3 per pull slot
player? The latter. The blackjack player is worth $97.50 an
hour; the slot player is worth $105 an hour. The difference is explained by
house edge, which is 1.5 percent on blackjack and 7.0 percent on slots. The
finding is magnified by the fact that the $100-per-hand blackjack player is far
more inclined to accord himself whale-like status, thereby deserving of the
highest standard of treatment. “Slot players are the most important players for
generating revenue to your casino,” said Jacobson. “They are comparatively low
maintenance and need less babying.”
Charles Anderer
is executive editor of BNP Media Gaming Group and also oversees content development, sales and marketing for the company’s trade shows and conferences, which include Bingo World, Southern Gaming Summit, Gaming Technology Summit, New York Gaming Summit and Casino Marketing. He can be contacted at andererc@bnpmedia.com.
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