MARKETING: The new era of player development
April 12, 2012
I have never liked the phrase “player development” as used in the common casino nomenclature to describe business building activities designed to find, keep, and grow premium casino customers. It conjures up images of mad scientists in dark basement laboratories with strange liquids in test tubes with smoke coming out of them.
As a casino player myself, I don’t want to be “developed,” thank you very much. As my friend Jean Scott would suggest, why don’t we just use the phrase “hosting” instead of “player development?” So much warmer and fuzzier.
Notwithstanding this funky title, player development has become the single biggest key to a casino’s success over the past decade; the best tool for nurturing profitable gaming business during tough economic times in many maturing, super-competitive gaming markets.
But it wasn’t always this way. Indeed, we are currently going through the fourth iteration of player development since gaming exploded in Nevada decades ago.
The first era of player development (pre-1970’s) I affectionately refer to as the “Neanderthal Hunters/Huggers Era.” Player development was accomplished by senior on-floor casino executives, commonly called “pit bosses.” Back then, casinos were all about table games and all about Reno and Las Vegas.
One characteristic of this early era was a very rudimentary database system, usually an address book with scribbled entries in table game managers’ vest pockets. They observed, approached, and built relationships with the high rollers in their areas and made comp decisions usually by the size of a player’s credit line, by the executive’s gut instinct, and by the depth of the relationship that developed (and sometimes by the gifts that these players brought for the pit bosses). Communication to these players was informal, perhaps a phone call from the executive that they had gotten to know.
The second era of player development I refer to as “The Big Game Hunters Era,” which took place from the late 1970’s to the early 1990’s, mainly in Las Vegas and Atlantic City. Hallmarks of this era included aggressive, well compensated hosts of major casinos searching and fighting for a pretty robust high roller group.
In this era, host ethics became an issue, with hosts commonly changing employers and trying to bring their high rollers with them, against a developing background of confidentiality agreements, employment contracts and occasional lawsuits. Database information was becoming more scientific, but true, effective profitability analysis was still lacking.
The third era, which I call the “Hunters, Huggers, Pizza Order Takers, Comp Writers and Referees Era,” refers to the mid 1990’s to mid 2000’s time period, one of explosive growth in casinos all over North America. Casinos went mainstream, became mostly locals (and some day trip tourists) places and started adding host departments and hiring hosts as fast as they could, often with little strategic thought or effective skills training. And although information and analysis was rapidly improving, host-outside of established markets such as Las Vegas and Atlantic City-were generally glad-handing “huggers.”
This brings us to the current era of player development, “The Host as Business Development Professional Era.” Though still evolving, I believe the trend is clear and the trademarks unmistakable. It is hosts with PDAs and team-based compensation structures. It is accurate and insightful profitability analysis. It is segmentation and predictive modeling. It is 21st century.
I believe this current era has rapidly arrived because of recession, gaming market saturation, and intense competition. Player development departments can no longer afford to have any fluff, and casino hosts can no longer afford to just “kiss babies” and write comps. With information, research and analysis capabilities now so powerful and standard in the casino marketing world, player development has become the best opportunity to drive business and grow revenue, if casino hosts can fully transition to becoming professional, relationship-based salespeople. Sort of like the pit bosses of the first era, but with science and accountability.
And while this current player development era comes with a host of issues and challenges in making the transition from “hugging” to scientifically “hunting,” those casinos that do it effectively will have a competitive advantage in the coming decade and into the next era, whatever it may be.