How to Compete as an Underdog in the Casino Industry
The setbacks in the credit market, in combination with the disastrous economy, led many casino operators to talk to themselves and ask questions like...
“How do we keep our heads above the water and still provide the shareholder value that is being asked of us?”
“How do we cut expenses so we don’t look like we’re failing?”
“Is there some way to squeeze more revenue from our market?”
“What will make them choose us over a newer casino?”
Even today, as we start to see some revenue rebounding back, we continue to ask ourselves the same questions.
We’ve seen underdogs in many industries. Some have held on profitably in the number two spot, but some have risen to the top. Think about the Pepsi Challenge and how it forced Coca-Cola into introducing its ill-fated New Coke. Avis turned the strength of Hertz’s number one spot into a weakness by making people wonder if Hertz might be resting on its laurels.
These brands show us that being the underdog isn’t the worst spot to be in. When you’re the underdog in a fight, you have to be smarter and quicker. You have to spend more time than money to make yourself a competitive option. Being the underdog forces us to think differently, often turning typical questions inside out before answering.
Here are five steps to being the best underdog you can be.
Step 1: Be a brilliant you—You don’t have to be all things to all people. Chances are even the number one operator in your market isn’t all things to everyone. Pick a spot in the customer’s mind, stand still, and be good at standing in that spot. You can be the fun place. You can be the fancy place. Chances are you can only do one brilliantly.
Brands that grow and flourish are usually singularly focused on what they want to be. This clarity drives decisions across the entire enterprise. If an option doesn’t fit with the brand vision, throw it out.
Step 2: Remember that we are in the hospitality business—Being from the South, I often refer to my birthplace when evaluating hospitality. Years ago, one of the most wonderful men I’ve ever had the honor of knowing passed away. If I hadn’t known better, I would have assumed a head of state had passed away, but he was a maitre’d. A person who served others his whole career had also earned the respect of young and old, leader and follower. All came out to honor him. Does your property exhibit this high level sense of hospitality?
Step 3: Have fun—In order for us to stay in business, people have to lose money. We are most likely the only business where people give money knowing there will be nothing more tangible than a memory when they leave. So, have some fun, and make it easy for customers to have fun as well! This means that getting to their station and doing their work has to be easy for employees. Managers and supervisors must have the tools available to assist staff in being successful. The fun truly has to begin back of house (BOH = Begin Over Here).
Promotions should not only be entertaining, but easy to participate in. Offers should be easy to redeem. Fun and easy go hand in hand.
Step 4: Make your property accessible to everyone—Make a list of all of your property offerings. Then write your segments, or tiers, or whatever way you group customers across the top of that list. Now take inventory. For each group, ask yourself if you want them to be able to access that offering and if they actually can. Your top customers probably have access to everything, but what about that middle tier—your bread and butter? Can they indeed eat in the buffet during an average visit without dipping into their pocket or do your most frequent visitors only earn enough after several visits? Is the steakhouse considered “too fancy” or only for special occasion, leaving the buffet as the only viable option. Are only your top customers welcome at the hotel on the weekend?
Step 5: Think local—Everyone looks to Las Vegas to inspire our property changes, but are you meeting the wants and desires of your local customer? A steakhouse is great to have unless it’s empty more nights than not. Be in tune to your core customer needs by constantly talking to them. You’ll likely find you don’t need a celebrity chef. You simply need good food and a brand you can market. You don’t need a nightclub if your market isn’t a nightclub market. You need a good bar with a good selection of drinks and a friendly, talented bartender.
These steps show that competing as an underdog can be done successfully. It doesn’t take capital. It takes you.