One of the informational high points of the conference was an operators roundtable moderated by Steve Browne, president, Raving Service, and featuring Michael Michaud, vice president of marketing, Seminole Casino Coconut Creek; Steve Neely, vice president of marketing, Rivers Casino; Holly O’Brien, vice president of marketing, Warner Gaming; and Kari Smith, executive director of marketing, Morongo Casino Resort & Spa. The participants tackled the questions of how their world is changing, what it might look like in the future, and how certain fundamentals will remain constant. An account of their discussion follows:
What’s the state of marketing at your property right now and what do you see as the big change in the next six months to a year?
Neely: As fast as technology is moving today, it’s really hard to say the future is 18 months, six months or five years away. Just think about how much is transitioning away from your PC to your smartphone and your iPad. Where does it stop and where does it start? The technology is moving so fast in that space that it’s the area we’re trying to hone in on. If you’re just now beginning to think about e-mail and text, move on; you’re way behind. At what point does the shelf-life expire on the way you’re communicating with your guests? That’s what I’m really trying to wrap my arms around right now. How do I remain relevant? How do I move in a way that I can interact with my guests with actionable data? How do I get that data and make it actionable? And how can I consolidate to a place where it’s easy for someone on the front line to have access to it and use it in a way that will improve the guest experience?
O’Brien: In the short-term, relationships will be more important than ever; it sounds very low-tech, but it’s one of those inalienable truths. Consider that you’ve got many people in their peak gaming years—50s, 60s and 70s—whose nest eggs were decimated by recent economic events. It’s going to be harder than ever to have them part with their discretionary income when they have it. So that trust in the relationship is going to have to be there as well as the value. You’re going to have to have really great relationships and give them great reasons to get them to come to the casino floor. In the go-go years, all you had to do was hang up a sign and say, “Come for your golf umbrella,” or, “Come for your cooler.” That doesn’t work anymore. We tried to give away Pandora bracelets; you didn’t have to earn one single point. We had this slated for our very best guests and 90 people showed up. We also gave away really beautiful Rubbermaid storage sets valued at $150 and no one came for that either.
These things aren’t working anymore; people know how to acquire their own gifts and there’s a lot of transparency out there. I think what they really want is to be touched, to be liked and to be acknowledged. People are always going to be people and they’re going to want to connect with other people who know, care about and like them. So in the short term, I’m really looking at developing meaningful events for our top players and for those in the middle-tier as well.
Michaud: Same as Holly. A couple of years ago we had a so-called turnaround expert come to one of our sister properties in South Florida and we started doing a lot of gift giveaways and bonus free play days and it really started to drive revenue to that particular casino. That’s what people were hungry for so we followed that model, too. But it created a sense of entitlement. It drove up our costs and our service levels; we were serving 35,000 people that were worth $50. We had a new CEO come in and he said you’re doing too much, so we put a stop to it and started to focus on the top 20 percent, not only as marketers but as the entire executive team. Those players want to have [access to a certain level of management], so they can go to a person who can make a decision when they have a serious issue. We find that we’re lowering our costs but we’re still seeing increases in revenue. You also have to look at your data every day to understand where your weaknesses are and attack them.
Smith: When I arrived at Morongo we were like a lot of other properties. To paraphrase Warren Buffet: the economy dried up and the tide went out so you could see who’d been swimming without their trunks on. Unfortunately, we didn’t really know our players. When things were booming, we thought it was always going to be that way. When we talk about the relationship with the player, it has to permeate every inch of the organization. You have to know what their gaming preferences are and how to speak to them. So for us, in the immediate term, we’ve been very focused on our systems integration, data analysis and use that as a tool to educate our team as to who our players really are. And maybe it’s not who we think they are. Maybe it’s not that 55-year-old female slot player. Morongo’s actually a little different. We’re in Cabazon, Calif., and the benefit to us is that it’s about 90 miles from Los Angeles. Less than 10 percent of our players come to us from Palm Springs, because there are five other fabulous casinos that they can visit there. So we’re focused on understanding who our players are and personalizing our communications and marketing initiatives with them, both with our staff and our host team.
What are the critical technologies or technological changes that you see coming in the next five years that will help us build better relationships?
Smith: I really think it has to start with our systems providers. We don’t have the adequate means to track and segment based on player preferences and behavioral data. There are limitations that are built into the slot system because they come from a manufacturer’s not an operator’s perspective. They have to continue to evolve so that our marketing can become more sophisticated and give us the means to track lifetime relationships with players on a way that is accessible and user-friendly for the relevant people in our organizations. I think a lot of us are starting to look for solutions outside of the industry because our systems providers have some challenges integrating and segmenting preference data, which has not been a priority for them in the past.
O’Brien: I think Kari hit on it very well. I would have grabbed those same words; “behavioral,” and “preference.” Data is one thing, but what are the algorithms that are really picking up on behaviors and preferences? That’s going to be really important. I also think the host of tomorrow is going to look completely different. A lot of today’s hosts look like us; they’re put together in their suits and ties and they mean well, but in the future they’re going to have to mirror the guest. Our database is getting younger and a lot of it is being driven by male ETG players. The 22-year-old guest is not interested in interacting with me. Some of the changes in relationship management are technological; some are going to be in staffing.
Michaud: One point is mobile applications and how we can advance them for the casino environment and our players. We also need to see more personalized technologies on the casino floor. An example that we have at Seminole Creek is the first ever Players Club Experience. We have eliminated all lines and counters. We have a Players Cub that was developed with the people who help Apple design their retail stores and an application from Bally Technologies. People walk up to a self-service kiosk where they can reprint their card, reset their PIN, look up their points and available free play—all without waiting in line and standing at a counter and looking at the top of a head. It’s pretty new to the industry and people at first don’t know what it is. They can make reservations, buy tickets to a concert; it’s something that allows you to have personal service on the gaming floor. Cosmopolitan does a great job of it as well. You can check in with a clerk and a tablet without waiting on line. It’s more convenient for the guest and gives them more time to game.
Neely: From a strategic standpoint, what do we want that guest experience to be when they arrive on your property? What Michael has done at Coconut Creek is groundbreaking, but they didn’t start by asking themselves if they should buy kiosks; they wanted to know how they could get people out of lines and improve the guest experience. How do they make technology part of the player relationship so that they’re comfortable interacting with my players club rep as part of that interaction? The technology is out there. Right now, it’s a little expensive but in five years that won’t be the case. Don’t focus on the technology; focus on the outcome. What is it that you want to accomplish for the guests sake? I think we spend too much time thinking we have to buy a gadget because it will help me move the assembly line faster, when the reality is we need to destroy the whole assembly line and replace it with interaction, relationships and a focus on adding value to the player experience.
It’s five years from now; is direct mail dead?
O’Brien: Not quite dead; maybe on life support. Let’s face it, there are newspapers that have gone bust and there are those that still print. Where I think it’s going is we’ll see more people who state that preference [to not receive printed mail]. But shame on us if we don’t ask them.What I predict is that the club of the future is going to be managed, fulfilled and redeemed on mobile devices. That’s eventually what people want; they don’t want to carry stuff around. They’re shopping on their mobile devices, so why can’t they redeem their gaming offers with them? That to me will take less than five years.
Michaud: I don’t think it’s completely dead. I think you still need a “wow factor” out there, and direct mail can drive excitement for people even before they step inside a casino. There are ways to make direct mail exciting; sound chips, scratch-and-sniff, and other elements that can build excitement into direct mail. I don’t think it’s going to go away, even for another 10 years.
Smith: It may not be dead, but I’m going to plan like I’m attending the funeral for direct mail. Not only is it on life support, but our mass media communication-style method of communicating with our audience is about to die as well. We have to deliver a personalized and customized message to our players. I think it’s becoming about micro-targeting, which is delivered electronically through e-mail, mobile and whatever is next because technology is evolving so quickly.
Neely: As marketers, we better hope it’s not dead in five years because e-mail doesn’t get the response rate of direct mail, and neither does Twitter or texting. Part of the reason is the shelf-life of those offers is so immediate. If I don’t need it right now and I get a text or a tweet, it’s gone. Whereas with direct mail I have a little bit of a shelf-life; I can study it, touch it and feel it. Whatever it is I want to do with that offer, I can hold it in my hand and I know that I have it. We don’t require people to bring the direct mail piece in to activate their free play; all we do is notify them that it’s available. The future is a hybrid, with apps or whatever replaces them that tell players their balance and what offers they have. But what’s going to get them off the couch? Right now, it’s direct mail. We still need as marketers to discover the next thing to replace it.
What replaces direct mail if it’s not Facebook, Twitter or social media in general? Is it mobile apps or games online?
Michaud: Raise your hand if you play Candy Crush [a fair number raise their hand]. There are 36.8 million people playing Candy Crush on a monthly basis. I think it points us in the direction of social gaming. In 2012, in an annual basis, $8.2 billion was spent on social gaming; by 2015, that’s expected be at $14.6 billion; 60 percent of that goes to the bottom line, and who wouldn’t want to have that type of ROI? If you’re not preparing for how social gaming relates to online gaming, and how online gaming can benefit a brick-and-mortar casino, you’re behind the eight-ball. Online casinos will partner with brick-and-mortar properties and provide benefits to them. We need to be ahead of that curve so we can partner with the right companies.
Neely: I have 22-year-old and 19-year-old sons and I’ve watched the move from texting to Facebook. One of my sons said with texting I talk to one friend; with Facebook, I talk to all my friends. A 21-year-old today doesn’t remember a world without Apple, without cell phones, without being able to get an answer to a question they have right now. They’re processing huge amounts of information every moment of every day without even thinking about it. The amount of connections they have and the way they socialize with one another is unprecedented. We’re so far off from being ready for it, but we’ve got to start taking those steps now. Where does online end and brick-and-mortar begin? Where does Facebook end and the next thing begin?
O’Brien: What we do now and what we’ve done since casinos were born is what I’d call outside-in. We incent you outside to come in and perform a certain behavior. What I see happening is people come in and we incent them with some currency to play a game they engage in outside the casino, but the only way you get that benefit is if you come to the casino.
Smith: We are in a unique position as technology and consumer habits evolve to create a community. Our GM David Brents has talked to us about the origin of the term “casinos,” which comes from “casa,” or “house.” I think that’s what you have to continue to revive, whether it’s inside or outside, is the opportunity to engage that community on terms that they like. It could be online, in-house, through mobile, or direct mail. We have to evolve as our communication strategies become more fragmented to communicate with people the way they want to be spoken to.
What’s your main take-away from this conversation about casino marketing over the next five years?
Smith: Look at your property with fresh eyes. Who is your player and where are your opportunities? Be creative and start fresh.
Neely: Just because technology is changing and times are changing, don’t get away from fundamental marketing principles. When was the last time as a marketer you were in a meeting with the slot director talking about hold percentages? That’s a pricing decision, one of the four Ps. When was the last time you were involved in that conversation? When was the last time you took a good look at how people get to your property? What’s your overall product mix and are you involved in those types of decisions? Where are your players in terms of their life cycle? When technology changed from radio to TV, it didn’t mean that good, solid, fundamental marketing changed with it. The rules don’t change.
O’Brien: Look at other industries such as airlines, which are very nimble in terms of yields and pricing and not giving people rewards that they don’t qualify for. Also, look at your data and spot what’s happening with the people who are on the younger end of the spectrum. What are those trends? We’ve really got to pay attention to them.
Michaud: Have every one of your meetings on the casino floor. That’s where your business is at.
[Comment from the audience] At a recent social gaming conference here, social gaming operators seemed to think there were so many hurdles for them on the regulatory side that they are years away from fully participating in the brick-and-mortar casino business.
Smith: If we as an industry make our timelines based on regulators, we’re going to be way behind when things do change. So we have to decide now where social gaming fits into our existing strategies and how to promote full engagement with the player.
Neely: It’s already happening; there are barriers to getting full-fledged crossover, but just last month Casino del Sol teamed up with DoubleDown to launch social media online games that qualify players for events in the casino. There hasn’t been a seismic shift, but little bits at a time. Marketers have learned over the years to work around regulatory requirements so that we’re within compliance but still pushing the envelope. If somebody sees Casino del Sol got this new concept to work, people aren’t going to wait ten years to try it themselves.
[Question from the audience] What’s your view on lotteries targeting casino customers to try and get a greater share of gaming wallet?
O’Brien: We did a promotional tie-in two years ago; it was a push to get people to bring lottery tickets to the casino and sign up for a new rewards card. In exchange for that they got free scratchers and anyone that brought in Mega Millions ticket stubs got entries into drawings. We don’t have to have an adversarial relationship with lotteries; it can be mutually beneficial.
Neely: I did a promotion 15 years ago that revolved around non-winning lottery tickets. The premise was to get people who were gamers but didn’t visit my casino. It didn’t hurt either business; we were promoting each other. The big thing today is anytime Powerball hits $250 million it’s an instant marketing campaign because the news covers it front-and-back.