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Marketing Express: The power of real-time decisions for casinos
By Natalie Osborn
July 27, 2015
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There are few business environments more dynamic than that of a casino. Serving a multitude of entertainment options to thousands of patrons every day results in a lot of customer interaction points. Making sense of all these interaction points in order to market more effectively to customers is no easy task – especially when today’s consumer has come to expect marketing messages that are tailored, relevant and timely, offered to them based on their actions and behaviours, now!
For marketers, reaching customers has become an increasingly more complicated task but the use of real-time data streams and analytics are providing marketers with opportunities to really impress their best customers with the right messaging at the right time. Casinos all over the world are embracing the concept of building a 360-view of the customer to truly improve the guest experience through personalization efforts. That means gathering as much information as possible about the needs, preferences and behaviors of their customers across all of their interactions. This information is then leveraged throughout the guest journey to provide more relevant offers, improve communications and increase engagement in real-time.
What are real-time decisions?
Real-time decisions are decisions made at a customer’s point of experience, using data captured from customer interactions as they occur, along with historical information and the outputs of analytics. Real-time marketing involves adding context to the channel by which you are interfacing with a patron. Context can be defined as the circumstances that form the setting for an event, statement or idea, and in terms of which it can be fully understood and assessed. So for a channel through which patrons interact to have context, it would need to provide facts that surround the patron’s current situation. Let’s explore an example.
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John Smith was a very high-value, high-frequency patron at the Zodiac casino, however he has not visited the casino in the last six months. John inserts his casino rewards card into a slot machine on the Zodiac’s gaming floor. The Zodiac casino can then gather John’s preferences, his previous gaming history, his theoretical worth, his predicted lifetime value and who the casino host is for this player. Using the information, an alert can be sent to the host to go and greet John, welcome him back to the property and provide him with an invitation to an exclusive poker tournament.
This is an illustration of real-time decisions in action, or real-time marketing. Real-time marketing, or the ability to provide context to a patron’s interactions, allows you to provide relevant, insightful offers, recommendations, advice and even service operations actions when they are needed the most. In the case of John Smith, the offer of a seat at a poker tournament was extremely relevant to him, based on his previous behavior and preferences.
The value of high-touch service
High-value casino customers like John Smith are very accustomed to receiving preferential treatment based on their casino activity. Casinos operate in a highly competitive environment where, if a patron doesn’t feel that he is getting the recognition that he deserves, he may be able to walk across the street to a competitor. In the larger gaming jurisdictions such as Las Vegas and Macau, it is not uncommon for a customer to have rewards accounts established at multiple casinos. Casino patrons value the high-touch service they receive once they reach preferential reward status with their preferred casino company, but all an unhappy patron would have to do is present their current players card at a competitor and they will very likely be granted the same status with the competitor. Therefore, making high-quality, real-time decisions during each patron interaction while the patron is still in the casino is critical to the success of a casino.
While real-time decision-making is critical to the success of a casino, it comes with its fair share of challenges. Patrons today do not act in typical ways, which makes it difficult for a rules-only approach to be successful. Some patrons are there for gaming, some for shows and entertainment, some for dining or nightlife, some for spa and maybe even some for golf. Without a comprehensive understanding of their needs and preferences, actions taken with patrons will fall flat.
When identifying what actions to take with a patron while they are in the experience, casinos need to manage the delicate balance between ensuring that the offer is attractive to the patron while it maintains profitability for the casino. Showering patrons with free food and drink, hotel rooms, show tickets or even cash in a bid to maintain their loyalty can easily backfire, whether it is a direct impact on the bottom line or if patrons start to feel that these treatments are meaningless to them. Predictive analytics can supply the much needed context to the patron experience. When coupled with real-time decision capabilities, a casino can truly enhance and personalize the interactions that they have with their patrons.
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Setting the big data stage
Pulling the data together to effectively activate real-time marketing is a challenge. First, casinos need to bring together all of the customer transaction data from all of the disparate systems that manage it. Then they need make sure that the data are of good quality and that there are no duplicates or bad data. Once the data is clean and ready, casinos build a 360-degree view of their customers and start to apply predictive analytics. This gives the casinos a unique understanding of their patron, including current and predicted customer lifetime value, the theoretical win they expect to gain from the patron whether it is daily or by trip for out-of-town patrons. They also build segmentation and response models to help them understand how to market to the patron and how they are likely to respond to offers.
Companies with game-changing analytics set their business strategies based on what the analytics tell them. In their book, “Competing on Analytics - The new science of winning,” authors Thomas H. Davenport and Jeanne G. Harris highlight Caesars Entertainment as a great example of this. By gathering and analyzing patron data through their Total Rewards program, Caesars found out something very important. They realized that their core, profitable patron was not who they thought it was. It was not the high-roller who dropped thousands of dollars per trip, but it was the high-frequency, lower-spend-per-visit slot player. They designed their entire brand position, rewards program, service offering and business strategy around this player and went on to become a market leader in the U.S. casino industry.
Foxwoods Casinos is another great example. Foxwoods segmented their customer database to such an extent that they were able to understand their guest preferences very well and get extremely granular with their campaigns. In some cases, for example, they can send 400 variations of a single mailer out to their customer base. Let’s think about that for a moment. Can you imagine sending FOUR HUNDRED different versions of the same mailing to your customer base? When you know your customers well enough you can give them exactly what they want, and keep them coming back.
Three essential ingredients to unlock the power of real-time marketing
- Assemble rich customer information – from multiple sources to create a clear view of the customer. Most often that involves things like: the customer’s transaction history, gaming preference, any stated client preferences, use of casino amenities and restaurants, to name a few.
- Find customer opportunity in data through predictive analytics – employing predictive analytics throughout the marketing process to not only segment customers and build propensity models, but to recalibrate models and adjust them as new information becomes available, using self-learning models to capitalize on emerging consumer trends and needs.
- Implement real-time marketing decision engines – to execute at the speed of marketing today and take advantage of real-time client insight, marketers need real-time capability. This is fundamental in the digital age to convert insight into opportunity and deliver real-time offers down to the device. Incorporate smart decision engines into the marketing infrastructure that are flexible and adaptable and can consume the full range of analytical inputs from models, business rules and triggers. Lastly, ensure the solution can also receive real-time information based on important new insight from customers such as proximity to casino amenities/games which may be a trigger for offer execution.
Final thoughts
In the highly competitive casino environment, the use of real-time marketing during each customer interaction has become a critical piece to marketing success. Today, being able to make those real-time and accurate decisions repeatedly is what will separate the highly successful casinos from those that flounder. As consumers’ expectations for relevancy continue to grow only the analytically savvy marketers will be in a position to leverage the wealth of data available to drive optimal real-time offers.
About the author:
Natalie Osborn is the senior industry consultant for SAS Institute’s Hospitality and Travel practice, and a 20+ year veteran of hospitality and hospitality technology solutions development, specializing in revenue management. Prior to joining SAS, Natalie was the director, product marketing for Minneapolis-based IDeaS Revenue Solutions, where she worked from 2000 to 2011. To learn more about how you can leverage analytics to know your patrons better than the competition visit: http://www.sas.com/en_ca/industry/casinos.html
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