If there’s one thing that survived The Great Recession, it was intelligence.
We’ll reserve comment on the broader implications of that statement, but while the game replacement cycle has undoubtedly slowed, operators across the board have continued to ramp up their use of analytical tools designed to get the right information in the right hands as quickly as possible. In tight times and crowded markets, the casino industry has chosen to take advantage of business intelligence systems that have come a very long way since they were introduced about a decade ago. More important, looking forward, business intelligence is poised to play a central role in the marketing-centric slot operations world that many see coming.
“We’ve been doing really well and our clients working with our software have done as well as could be expected,” said Kelly McGuire, practice director, global hospitality and travel, SAS, whose BI solutions are in “most Strip casinos,” among many other places in the industry. “All of us in this space have been learning how to make the tools more acceptable to the average user who is analytically minded but doesn’t have an advanced degree in statistics or research. We’ve learned over time as has the industry. There had to be acceptance in the industry about the value and for us to deliver the information in an accessible way.”
Dramatic progress has been evident on both sides of the supplier/operator equation, said Andrew Cardno, chief technology officer, BIS 2, which supplies the GameViz product. “We can work with their existing data infrastructure, so the installation time for a very sophisticated system typically is less than 24 hours,” he said. “Our record is about 90 minutes. There’s a bit of a follow-up time with data validation, but, with that, I’m finding that every property we’re talking to understands the data and the structure of it. There are a lot of clever people out there.”
There is a wide range of benefits to a productive BI system, and speed is a good place to start. Managers across many departments can start each day with a dashboard view of the enterprise, customized to their particular informational needs. This in itself, if we take a step back to ponder, is a minor miracle of sorts. Crunching numbers in a data warehouse doesn’t tax the slot system, because the figures sit apart from the transactional database. “One of the operators said a report that took his IT department four hours to compile now takes 20 seconds,” said Maryellen Muir, regional sales manager of business intelligence systems for Bally Technologies. “That includes bringing that report up, putting in all the variable data like dates and times, the part of the floor they want to see, what they’re measuring, whether it’s coin-in or theo win and run the report. That whole thing takes 20 seconds. The four hours was before they put in BI and when they were going against a live system on the floor.”
BI can provide 360 degree patron view
Bally’s BI product is composed of three modules; visual analysis, campaign management and reporting and analytics. For the past 18 months, most of its BI system sales have been for the full line of products, according to Muir.
In terms of ROI, “We did have a customer say recently that they could attribute a half-percent of the revenue they have on the floor to having a BI product, just from a slot perspective,” said Muir. “This comes from being able to know more about his games, being able to change out his floor when it needs to be changed out. When you’re talking about a large operator, that half-percent is a huge amount.”
By way of example, Muir described a Bally BI customer that had a row of machines with games in the middle that were turning the color-coded visual analysis software deep red. “Normally, the ends of the banks do better,” she said. “Or if it’s an odd number, you expect every other game to do better. People don’t like sitting right next to each other, so your games do better when people have a little more room around them. This customer saw thought it was strange that someone would like that game in that location when he had games like that in other locations that were not doing as well.
“We were able to drill down in a 15- or 20-minute chat,” said Muir. “First we asked what day of the week that game was being played more than others, and we found that the game was being played between 2 and 4 in the morning, which was kind of odd. So then we asked to see where those customers lived and it was all from one zip code. Then we learned it was just a couple of people who played that game more than any others. So, on paper, it would have looked like you had a really good game and you might have ordered a conversion or another unit. But when you combined it with the visualization and customer analytics, you didn’t have a really good game, you had a really good customer who was skewing your numbers for that game. If those one or two customers went away, you wouldn’t have a good game and you’d wonder what happened.”
Cardno relates a similar story from the networked gaming side of how BI saved a customer from taking a productive game off the floor. “We have solved the multi-game analysis problem; we can show people the correct theoretical win for the device and which games are driving that,” he said. “But it can be tricky.”
He described a machine where one game had a hold of 6 percent and another had a hold of about 3 percent. The slot accounting system for the property was tethered at about 3.5 percent. “When we saw the actual distribution of play, most of the play was on the 6 percent game,” said Cardno. “What was happening was people were looking at the accounting numbers, and a decision had been made to remove the game because it was not performing. They were about to make a decision based on historical methods of slot accounting, which I call location-based. In fact, when they realized that the game was doing almost double what they expected in terms of theo per day, they kept this game and it has made them a dramatic amount of money.
“There are a lot of these multigame devices out there, and they can perform very well. But in order to successfully deploy multigames, you have to understand the distribution of play on the games within the game. I’m seeing different kinds of customers responding to different games in different ways. Without the ability to analyze and see the data, you just can’t make the right game mix decisions.”
Add the need to develop a 360-degree view of patron behavior to the complexities of networked gaming and you can see how the degree of difficulty rises. Getting a grasp of gaming and non-gaming patron behaviors is a goal of all BI systems, including WMS Gaming’s GamEdge product, which it describes as a Patron Management System combining the functionality of customer relationship management and loyalty management with the capabilities of BI. GamEdge integrates with casino management, lodging, and retail systems to provide casino personnel enterprise-wide with real-time patron data and a unified view of customers.
“Our consistent focus has been – and remains – on providing our customers with new tools and solutions that will allow them to effectively utilize the new capabilities of networked technology to earn high returns on their investment,” Orrin J. Edidin, president, WMS Industries Inc, said when the product was announced. “Networked gaming will dramatically increase the amount of data and transparency that exists within our customers’ operations. Our GamEdge CRM solution will enable customers to have a much more intimate and active relationship with their patrons enterprise-wide.”
Mark Pace, vice president, Networked Gaming Engineering & Operations for WMS, noted the importance of focusing on real-time information. Many CRM tools today typically point to data warehouse information, generating an offer based on last month’s or last week’s data,” Pace said. “With GamEdge, things can happen in real time. It handles real-time data, and through dynamic rules engines, it can cause things to happen in real time.”
Such capability gives casino operators more opportunity to connect with players in meaningful ways, he said.
“Think about the power of being able to write a rule once I see there is a first-time use of a player’s card, and that player loses $50 in 30 minutes, that lets us offer them something” to ease that loss, added Cynthia Hays, senior director of Networked Gaming Technical Operations for WMS. “The power of that is amazing if you have the opportunity to turn that player’s experience into something positive even after they’ve just lost $50. The ability to capture real-time data per transaction is incredible.”
It also adds value in other ways. For instance, a marketing department may want to offer a promotion offering free buffet coupons but also need to ensure a promotion doesn’t become a victim of its own success. With GamEdge, the marketing team can write a rule to offer the promotion until X number of buffet coupons are redeemed. “You can really control your marketing spend.”
The trials of the recession have shown the value of understanding non-gaming behaviors in other ways, SAS’ McGuire noted. “Now you’re starting to identify not just the most valuable gamers but the folks that use all of the assets of the property,” she said. “In the recession your traditional best customers might not have been frequenting the property as much, so our Patron Value Optimization allowed casinos to explore a bit more and find new segments that might not have been worth leveraging before and at the same time reduce the cost of reinvestment and marketing. They learned the value of someone who uses the restaurant and retail, and to tie that resort customer to the gaming customer. When you track a customer across the enterprise and see they are accompanied by someone who uses non-gaming amenities, the customer becomes that much more valuable. It moves us beyond the traditional definition of who the valuable customers are.”
Another area that is relatively untapped by BI is check cashing customers, said Claudia Winkler, senior vice president of professional services, NEWave. This year, NEWave is distributing a new release to its platform that not only captures the check image but also data on the person who is cashing the check, giving casinos a whole new marketing database of people who may not be in their casino management system. The system will capture information from their driver’s license (name, address, city, state, zip) that can be cross-referenced with other data in the CMS. If a customer has a data warehouse strategy, that data could be exported into a data mart where it could be matched or appended to patron information inside the mart.
“Capturing information on check cashing customers hasn’t been really widely adopted since the advent of player tracking systems,” said Winkler. “From a marketing perspective, many of those customers that are cashing checks are also players. Maybe they cash their check and go to dinner or do other things in the casino that are currently not being captured. In the new normal, we have to take the 360-degree view. You have customers that come in that are very high value, but also very high reinvestment. You have another group of players that are not very high value, but you don’t have to reinvest as much in them for their loyalty. To be able to capture the marketing information on someone who’s cashing a check in your building is an important value-add.”
Two other areas are worth mentioning for the future use of BI systems: social media and mini casinos.
On the social media side, SAS uses text analytic tools to analyze relevant information from patrons’ own social networks. “They’re tweeting to each other about casino brands, and you can do word searches on Twitter and get a feed on all the activity,” said McGuire. “Our tool at SAS lets you track that and then apply a sentiment to it so you know the context of the comment. We surface negative comments as alerts so casinos can stay on top of problems. Negative comment comes up we put it in a special window; it could be service is bad at the lobby bar. You can respond immediately to whatever it is. With the huge volume of conversations happening you’ve got to have a method to surface the ones that matter.”
The mini-casino concept that Cardno describes points toward the marketing-centric view that many believe will move front-and-center with slot operations. By way of example, he described the Silverton Casino’s successful Penny Alley concept, which took a dead area of the floor, branded it with penny slots supported by a full-bodied marketing effort toward players with a preference for those games.
“If you look at a gaming floor, they’re kind of homogenous, or continuous, but the product itself is so dynamic,” said Cardno. “You can take a product that isn’t doing much out of one area, put it elsewhere on the floor and go after a whole different market. Deploying mini-casinos and applying business intelligence so people can do that properly is a significant opportunity. With Penny Alley, Silverton focused the product, the marketing and the promotions all on one area of the casino with a theme amongst the products. It drove time on device, and there was much more excitement. This is a way to align slots and marketing completely, with the potential to take you out of the world of analytics and into the world of business planning. What is the P&L for this area of the floor? What is my business plan? Now you’re proactively planning different areas of the floor. The analytics become an instrument to help you do that and gives you the ability to drive the EBITDA of each area of your business. Taking the example even further, a multi-casino operator could have a group Penny Casino manager who is responsible for every penny casino in every property. That would be a very advanced thing to do. Instead of having people responsible for a property, have people responsible for a style of game or a category or a mini-casino across the enterprise.” SlotManager