Updating slot analytics strategy
Although not a new science, slot analytics is highly underutilized within the gaming industry and by casino marketers. And when it is used, the technology is often dedicated to slots alone and kept separate from other operations within the casino resort; which is something of a shame.
Why? Well, because when you layer on other systems such as the loyalty kiosk, mobile app platform, e-mail platform, gamification platform and slot systems to the analytics engine, something very special happens—a whole new view of the customer starts to emerge.
Don’t take my word for it. Recently, I caught up with casino expert Tom Winward, COO, CTO and principal owner of Real Win Solutions. We got to talking about slot analytics and the impact good data can have on casino win.
By way of background, prior to working in the gaming industry, Winward was employed by Texaco as a senior analyst. At Texaco, he reported to a boss who was an engineer. His boss consistently pounded into his head, “Every business problem could be solved with a price volume analysis.” Winward was young and didn’t really believe in price volume analysis, but after working in the gaming industry, found that his boss’s statement rings true 20 years later.
“As with most things we see in the gaming industry there are always multiple variables that cause changes to game and player performance,” Winward said. “Many times the variables are difficult to control which make doing analysis very difficult. I have found that if I can break things down into either price or volume, it helps the casino better understand variances in both game and player performance. Being able to quantify the variance of what was won or lost because of volatility of the machines versus floor volume changes is what price volume will do. Being able to hold each variable constant allows you to understand what has changed, and will allow you to make necessary adjustments if needed.”
Here are some slot marketing department conundrums that a strong price volume analysis model was able to resolve, according to Winward:
- A bonusing program that infused millions of dollars of bonuses on a floor but the net impact was flat revenues. The price volume analysis showed the volume of incremental coin-in created by the bonuses offset the bonuses awarded. This allows the property to see that the bonus increased time on device, but did not drive the players to spend more.
- A promotion that layered larger than normal free play amounts, but where the incremental free play infused into a floor did not generate incremental revenue. The cost volume determined that the promotion actually reduced the overall hold of the floor and reduced the amount of spend per player because the offers were too rich, and going to the wrong players.
- A casino group decided to lower the hold percentage on their entire penny video slot product from 10 percent to 7 percent to boost play and, hopefully, produce increased coin-in to offset reduced hold percentage. In this case, the price volume analysis was able to show that the declines in hold did not create the incremental revenues for that market, so the hold reduction was not offset by increased coin in per unit.
- At one property, a year-over-year comparison showed a 0.5 percent increase in the actual hold, but floor theoretical remained flat. The price volume study can determine if the increased revenue can be attributed to floor volatility or another factor like marketing efforts.
In addition to greater use of price volume metrics, Winward stresses slot departments should consider the following factors when either establishing or upgrading analytics capabilities:
- Location—Creating the ability to flag location types can be very beneficial to slot analysis. Games that are classified in high-performance areas may be held to a different standard than those in low-performing areas.
- Product—Indexing a new product to existing similar products and models help to insure correct financial decisions are made.
- Pricing—Hold percentage is always a highly debated topic. I think a property that develops ground rules for their product pricing is better able to determine the true economic impact of hold percentage changes.
- Players—Segment players by a variety of metrics including geography, age, gender, life cycle with the club, reward status, frequency and so on. Every slot director needs to be able to easily which specific types of players drive the volume on a given group of games.