Here are some of the findings from this year's Host Development Conference at the Casino marketing Conference.



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.”