Tighter slots, worse table game rules, higher ATM fees, resort fees—these and other “player squeezes,” I believe, have put the casino industry at increasing risk of alienating and eventually losing their core gambling customers, who also are the most profitable ones.
I know the main reasons that have been given for this value erosion… increasing competition, higher expenses, poor economy, more efficient technology and so on. I also believe that casino leaders have tried to be judicious in the trimming of player value. It’s just that the numerous individual decisions that they all have made over the years have led to the unintended consequences of today. “If you are a gambler, we give you a good deal,” has been replaced by, “If you are a gambler, we need to make more money from you at more of our cash registers.”
And our industry’s core avid casino players—the “profitability bedrock” of our business—have indeed felt this value squeeze and, surprise, they don’t like it. We can no longer cover up our shortsighted value squeeze by saying “They’ll still come anyway.” More and more players are not “coming anyway” or they are transferring their business to those casinos who still reach their “value threshold.”
If “squeezing player value” has been the culprit, then “restoring player value” surely must be the solution. But that is hard to do. It is hard to give back what has already been taken away. Where would you start and how do you do that intelligently and profitably?
I do have numerous “value restoration tactics” to suggest (and I am even devoting a part of my consulting practice to it), but first I think it is important to share what I think are the guiding principles of restoring player value.
To start, player value creation must create real value for both the casino company and the casino player. For the casino company that value should surely be increased revenue, but can also be enhanced brand image, positive word of mouth, increased guest loyalty and other observed positive player reactions.
With this in mind, player value restoration must be…
• … focused primarily on driving casino traffic and casino play. That is the revenue area with the highest margins and the one most valued by core players.
• … measurable and mathematically sound. It should not drag a casino into a quagmire like the current free play runaway train.
• … budget conscious, not too lavish or expensive and have the ability to “pay for itself.” It is not just pure discounting or “buying” business at the expense of the bottom line.
• … multi-faceted and speak to what moves casino players to visit a casino. This can be gaming value, food value, beverage value or sometimes just plain old fun and excitement.
• … counted on by casino players to be reliably and consistently available over the long term. It should not be a flash in the pan and not change significantly unless to make player value somehow better.
• … differentiated from the competition’s player value formula. It is not copycatting, “me too” strategies or one-upmanship.
• … communicated effectively, understanding that the strongest communication tool is word of mouth.
In addition, player value restoration is not a replacement for intelligent business strategy, but should complement and energize it. Also, player value restoration should be mostly transparent, as well as easy to understand, follow and convey to others. “No ATM fees” – I get it. “$9.99 prime rib special” – I get it. “Loosest slot machines offered by a manufacturer” (and certified so) – I get it.
Restoring player value really comes down to giving casino players what they really want—more time spent gambling. Follow these principles to begin to do that in a way that is real and will resonate with your best players.
And it’s better than watching them slowly lose interest and stay home playing computer games.