by Sudhir Kale
Five Indomitable Trends for the Casino Industry – 2007 and Beyond.
It is unbelievable how quickly 2006 passed. And what an eventful year it was for the gaming industry. Macau truly blossomed to become the largest gaming destination in the world, Singapore awarded its two licenses to Las Vegas Sands and to Genting, thus ending the year-long suspense, and Harrah’s was courted with a buyout offer worth around $16 billion. Each of these is probably once in a lifetime event or a confluence of events unlikely to be witnessed again. Events of 2006 have irrevocably changed the gaming industry, orbiting it full-throttle into the global arena, where capital, competition, customers, and even employees have assumed a global persona.
The U.S. stance toward online gaming notwithstanding, policymakers the world over seem to have more fully accepted the inevitable and ubiquitous reality of gaming. By the looks of it, it is only a matter of time before Japan, Thailand, India, and possibly other provinces in China will ease gaming regulations to allow fully-fledged land based casinos.
How do these developments impact each of us in coming years? I see five trends underway. None of these are truly new, but their impact on our industry will be like nothing we have witnessed before. The first trend deals with the assertion of customer supremacy. With casino gambling becoming increasingly more ubiquitous and more oligopolistic, customers the world over will become more discriminating and more demanding. The industry will rapidly move to new global standards of excellence in serving customers where being “good” won’t be good enough. Many casino properties, hitherto operating on the “build it and they will come” orientation will experience shocks both along the top- and the bottom-line. Customer centrism will have to be drilled into the ossified corporate culture of many casino properties, including those on reservations or they will fast become endangered species. Customer service will increasingly become the only possible means of sustainable competitive advantage. To better serve their customers, casinos will have to make more investments in customer research and in the managers who will advocate customer intimacy with evangelical zeal.
Second, executives with cross-functional skills will be highly sought after and departmental silos will have to be razed to make way for a new breed of boundary spanners. Departmental labels such as convention, hotel, table games, slots, and F&B will still remain, but market forces will drastically undermine the fiefdom presently associated with these labels. A 360-degree view of the customer and previously unimagined service standards will mandate unprecedented interdepartmental cooperation. This will require the accountant to understand marketing concepts and for the marketing whiz to become balance-sheet literate.
Third, demands on top leadership at casinos will qualitatively change. The mettle of leadership will be increasingly gauged by the value added to customer experience. Decision making at the very top will assume more of a Janusian nature—more intuitive and instinctive on the one hand, and more data- and facts-driven on the other. This will increase the demand for statistics aficionados and “quant jocks” or “propeller heads” (to use Gary Loveman’s favourite term) as well as for corporate shamans whose vision of business transcends the immediate bottom-line. The value of leaders will be assessed on leaders’ values and on how well these values are articulated to employees and the broader community. Customer lifetime value will vie with earnings per share and EBIDTA for a spot on the top management dashboard.
Fourth, retaining excellent staff will assume unparalleled significance, from the frontline personnel all the way to the C-level. New means to engender employee loyalty and commitment will have to be devised in short order if casino companies are to compete globally for human resources. Catering to employees’ spiritual needs will become an important differentiating factor in attracting and retaining quality employees. Internal marketing will rise in ascendency in relation to external marketing, though at an absolute level the importance of both will significantly increase. Employee-retention and customer-retention will be the twin-goals behind most major corporate initiatives and both objectives will increasingly overlap in domain.
Finally, life-long learning at every organizational level will have to be inscribed as a key tenet of casino management. Appreciation of knowledge management in all its facets will rise exponentially. What you learnt in graduate school or at an executive development program three years ago will be of little value in managing your affairs today. Frequent changes in job content and responsibilities will mean incessant retooling and topping up of skills. Casino companies and individual employees will have to jointly carry the mantle of on-going learning. A significant component of this learning will be attaining competency in cross-cultural communication. Already, many of your dealers are from Poland, your customers from Vietnam and China, and your financiers from Europe and the Far East. Not being able to communicate meaningfully with any of these constituencies will increasingly become a grievous career handicap.
I, for one, look forward to what the imminent future will offer. We are blessed to be operating in the gaming industry, an industry with singular glamour, unequalled intrigue, incessant adventure, constant change, and heaps of fun. No wonder casino is the stuff so many movies are made of. Let us hope that through our collective actions, the gaming industry is counted not only among the most profitable but also among the most environmentally conscious, socially responsive, customer-driven, employer-friendly, and charitable of all industries.
Date Posted: 08-Mar-2007
Sudhir Kale, Ph.D., is the founder of GamePlan Consultants, a company that consults and trains for casinos at a global level on casino marketing. He is also Associate Professor of Marketing at Bond University in Australia. Sudhir has published more than fifty articles on the management and marketing aspects of gaming. He has also been a featured speaker at many high profile gaming events such as the Global Gaming Expo and the University of Nevada’s executive development program for senior gaming executives. You can write to Sudhir at firstname.lastname@example.org.