For casino marketers, promotions are one of the keys in keeping players coming through casino doors. They are designed to achieve a multitude of goals, from filling slow periods and capturing more VIP revenue to alerting customers to new casino offerings and more.
At last May’s Southern Gaming Summit in Biloxi, Miss., casino marketers gathered for “Steal This Promotion,” a session focused on successful promotions that build incremental revenue. Ryan Meister, director of marketing for Treasure Bay Casino, moderated the session. On the panel were Julia Carcamo, president & chief brand strategist for J Carcamo & Associates; Linda Gordon, director of marketing for SCA Gaming; and Bobby Thornton, director—promotions and entertainment for Pearl River Resort.
The panelists started with the basics: What’s the best way to calculate incremental revenue?
“I think a lot of that has to be a partnership with your database marketing team and your analysts if you’re lucky enough to have them,” said Carcamo. “Because I know in the past we’ve developed a layering report, so it was very important to always analyze our direct marketing, as much as how many offers people are using and when they’re coming in and how they’re layering offers.”
Thornton added another facet to the calculation. “A big piece of [determining incremental revenue] is looking at that historical data,” he said. “So if you’re running the same kind of database program year over year, and you’re looking at running a promotion through the database and putting a promotion on top of that this year versus the prior year, you see if there was a bump or you just shifted the revenue around. Looking at prior years is very important as well.”
Gordon agreed with both panelists and wrapped it up adding, “It’s good to have the information; it’s even better to look at it. So if you don’t have a database manager, take the time to do that, run the reports, look at your tiers, look at your historical tiers…and most importantly, look at what your competition is doing, especially in your own market.”
Moving on from revenue, Meister posed the question marketers in the audience were waiting for: What can marketers themselves do to drive revenue today?
Carcamo went back to the history component. “You still look at what’s always been successful in the past, that’s always a good start. If you’re part of an organization that has multiple properties, I think you have a wealth of information and ideas that you can share as well,” she said.
“A lot of our customers liked interactive pieces to the promotions,” said Thornton. “So anything you can do where a customer can come up and put their hands on a promotion, get to play with something, get to play a game, tends to be a little bit more successful, as long as you follow what we found to be the key premise, which is the KISS principal. It’s ‘keep it simple stupid.’ Don’t make it too complicated. So as long as you keep the promotion simple, as long as you keep it fun and you appeal to the customer that way, you’re probably going to have a fairly successful promotion.”
This interactive component Thornton brought up was also a larger discussion throughout the session and for marketers today. Casinos are in the business of entertainment, and in order to have a successful promotion, marketers need to entertain players to get them to buy into it and remember it.
“I actually still do drawing drum promotions and I do it intentionally,” said Thornton. “I have virtual drawing systems, virtual kiosks, I use those as part of a larger marketing plan. Quite honestly there are still a large number of our guests out there that don’t trust those systems, that will never trust those systems and believe we’re cheating them. They want to be hands on, they want to feel it. Plus, one of the things that I believe is still very true is that the guests want to come to the casino to create a memory…winning on one of those kiosks is great, and that’s fun and exciting, but if they hit a $5 shell on the shell game, they win $5. But if they get to play the same game physically and there are people watching and rooting them on…they remember that.”
Also in the virtual realm, concerns of the survival and future of direct mail marketing were also raised. The panel was quick to answer, agreeing that they don’t think it will be going anywhere anytime soon, but e-mail marketing should absolutely be integrated into marketers’ plans.
“I don’t think direct mail is going away,” said Gordon. “But you have to remember that the Millennials are coming and they’re online and mobile. So as you look forward in your marketing plans, you have to start building in digital to your direct marketing.”
“I have been lucky and unlucky to have done tons of research for a couple of different operators in many markets,” Carcamo added. “Our core customers right now still love getting that mailer…they love seeing what the offers are, they start planning their calendar according to what you’ve mailed them.”
When it comes to the casino patrons, the audience wanted to know how marketers can inexpensively find promotions to appeal to a specific set of players.
Carcamo was quick to answer. “I think ask them,” she said. “We started using something as simple as SurveyMonkey… You know that customers love to give you their opinion. And it’s a really simple way to collect information. Send it out in an e-mail, they answer the questions and you get really good answers very quickly.”
Meister posed a question to the audience, asking how many of them had used SurveyMonkey and about a third of the room raised their hands. He added that Google Analytics was another service marketers could use to create and track questionnaires.
The layering of promotions and tiers was a hot topic at the session that raised many additional questions from the audience. For example, how can marketers go about determining revenue allocation for each promotion when layering?
“I think there are customers in your database in the higher tiers that layers will work for, no matter how many there are,” Gordon said. “They’re going to stay and play. You just have to be careful with your low- and mid-tier, that you’re not offering them something that you can’t continually offer them…make sure you reward appropriately according to where they’re playing and where you expect them to play,” Gordon said.
When marketers start looking at tiers, are there ways to make adjustments?
“I think it’s a lot about experimentation and pulling levers slightly,” Gordon added. “I don’t recommend pulling a lever all the way one way or the other. I think you need to pull them slightly and see where that shift happens in [player’s] behavior.”
The “sweet spot” for a promotion was another question generated by the audience. They wanted to know how long a promotion should be in order to be successful, especially long term. All panelists agreed that a month was usually best.
“I think you still have to do a little jazzing up in the middle of it to keep the momentum,” Carcamo said. “I’ve done quarterly promotions, but they’ve typically been a launch around something bigger for the property or a larger program, like a new loyalty program. I think you have to create that promotion as a bit of an umbrella and create smaller month-long chunks. You have to keep people interested, and three months of the same message and doing the same thing gets boring after a while, and it also gets boring for your staff.”
Another discussion was based on measuring promotion success by doing post-formas. An audience member asked the panel, “Do you always run a post-forma on the promotions that you do?
“I think that the process I’ve had in the past has been very simple,” Carcamo said. “You take some assumptions and your pre-forma and then someone has the ability to say this looks like a good program lets go ahead and put it in place. I think post-formas for me have been more than just numbers. Numbers tell you if you had revenue, you have to look at behavior modification… and also some research on what the impact was on the property. Sometimes you can have a really good promotion that’s very successful, drives the ROI, incremental revenue, every finance persons dream, but somehow, for example, the buffet got slammed because we weren’t prepared enough. So you’re hurting the employees, which hurts the customers, so there’s a lot more to the post-forma than the numbers.”
Thornton agreed but cautioned, “One of the pitfalls that I’ve seen in some of the post-formas that I’ve done is a case of grading your own homework. I’ve seen departments where they’ve done their own post-formas and they’ve been able to fix those numbers to make them look however they want, so I’d warn against that kind of scenario.”
In conclusion, casinos need to do what’s right for them and their players in order to have a successful promotion. In order to do this, marketers need to calculate incremental revenue efficiently, survey their players and get to know their wants and needs, combine direct and digital marketing in this new age, and study and learn from past promotion success and failures to determine how to move forward in their next promotions, while always keeping in mind that entertainment factor.