Thoughts on Loyalty Programs
Almost every casino I’ve ever known has what it calls a “loyalty program.” Yet from my experience, most of these well-meaning casino companies have “frequent user programs,” “discount programs” or “rebate programs,” but nothing that, in itself, builds long-term customer loyalty and real competitive advantage.
The problem, I believe, stems from the fact that, as an industry, we have been duped into reducing our “loyalty-building” efforts to players clubs, to benefit and point redemption schedules, to “tracking” systems, to CRM applications, to host networks, to frequent casino promotions, to “segmented tiers” of the customer database, to… numerous campaigns, programs and systems that may do some pretty nifty things (and may even be ESSENTIAL in our casino operations and marketing), but don’t build customer loyalty.
So of course, that begs the question, “What really builds customer loyalty?”
Perhaps looking at a few of my own customer loyalties might shed some light. I consider myself to have strong customer loyalty to the following companies (and for the following reasons):
- Southwest Airlines – frequent flights; reasonable pricing; incredibly friendly employees; no hidden fees; ease of making schedule changes; easy-to-understand frequent flyer program with valuable flight benefits that are easy to redeem; easy, fast-moving check-in process; guaranteed “A” boarding for frequent flyers.
- Egg Roll King (my local fast-food, Chinese takeout restaurant) – convenience (on my way home from work), good food, cheap prices, fast and friendly service, secure packaging of larger orders (for spill-proof transport to home).
- John Thayer (my accountant) – knowledge, responsiveness, pro-activity, congeniality, accuracy, specializes in small businesses.
- My favorite Reno locals casino – 10x odds on craps, friendly craps dealers that efficiently deal to “my action,” a quality casino restaurant that my wife and I like, occasional offers that are “worth it,” a few special VIP benefits like parking near the front door, table game supervisors that are friendly and don’t “sweat the money,” decent video poker at bars with friendly bartenders.
And as I try to distill what the learning from my personal loyalties may be for you and your casino’s efforts to build real customer loyalty, I believe that the following are the Principles of Building Player Loyalty.
• Your “Player Loyalty Program” Alone Does Not Build Player Loyalty – Sure, the information gained in your players club is essential, the customer segmentation is useful, and a good benefit schedule makes your customers happier than a bad one. But Good Players Club Strong Player Loyalty.
• Reasons for Player Loyalty Vary By Individual – And yes, there are some players that would be loyal to a casino with cheap food prices and low table game minimums, but you need to answer the question “Which customers do I want to be loyal?”
• Convenience Of Location Is An Unavoidable Component of Loyalty – And while you may not be able to do anything about your casino’s location, you can temper your expectations of revenue from distant customers and curtail excessive marketing spend against good customers who will never be really loyal because your casino is just “too damn far away.”
• Being “Easy to Do Business With” Is Essential To Having Loyalty – While you may have great games, good food, excellent players club benefits and other features that matter to your customers, you will never have loyalty if you also have long lines, stupid rules and procedures, and employees that cannot (or will not) act on behalf of the guest.
• When You Really Get Down To It, Loyalty Is Produced (Or Enhanced) By Your Employees – Loyalty “programs” don’t produce loyalty, people do, namely your EMPLOYEES. And while you are slicing and dicing your database to “incentivize incremental visitation,” remember that if you really want to build player loyalty that your competitors can’t copy, you’ll want to have your senior executives frequently on the floor touching your living, breathing players. You’ll want your frontline team members treating your “strangers” even better than your “regulars.” You’ll want to sit down frequently with your best customers to ask what you can do to make them even more loyal. You’ll want to stop some of the indiscriminate marketing spending that may be wearing out the casino carpet but not adding even one more loyal customer.
And you’ll want to start thinking about player loyalty not as a program or a pile of benefits, but more as how your casino organization can give your casino customers a “piece of your heart” rather than a “piece of your wallet.”