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Optimally Managing the Casino High-End Market
by Sudhir H. Kale

Optimally Managing the Casino High-End Market

By Sudhir H. Kale*
Locating and specifically targeting unique market segments is both a reality and a necessity in today's competitive gaming marketplace. The assumptions of the mass market and the attendant “build it and they will come” orientation no longer hold true for most casinos. Particularly tricky is the segmenting and targeting of the highly sought after high-end players.
Casinos have always bent over backwards in trying to accommodate the needs, preferences, whims, and idiosyncrasies of their high rollers. From lavish gifts to the redesigning of hotel rooms and suites, casinos will do almost anything to cater to the fancies and superstitions of their high-end customers. The reason is simple – high rollers typify the “heavy half” of the casino market, and often contribute substantially to the revenues and profits of a casino property. At many large casinos, while the number of carded players may run into millions, fewer than five thousand customers contribute to more than 30 percent of gaming revenues.

The preferred mode of marketing to high-rollers is one-on-one marketing. It is largely up to the casino host to schmooze with the high rollers so that they keep coming to the casino. The onus of retaining a high-roller thus squarely falls on the host. Human relationship skills of a host and chemistry between a host and the client largely determine the length of the high-end client’s relationship with a casino. Marketing tools to retain the high-end segment typically involve functions and gifts. High rollers are invited to all kinds of functions, from music concerts and boxing matches to wine-tasting gigs and golf tournaments to make them feel important. They are showered with comps and rewards so long as they continue to visit the casino and bet.

Despite this individualized attention, most casinos have no planned strategy in marketing to high-rollers as a group or to grow the size of this group. One-on-one marketing can be very expensive, and may not always yield optimum results. Further, since no attempt is made to understand in depth the preferences and motivations of high rollers, money spent on advertising does little to retain existing high rollers or to attract new ones. A content analysis of most casinos’ advertising reveals that the ads are prone to attract disproportionately large numbers of (mostly first-time) customers who probably would add the least amount of value to the casino’s bottom line.

Effective growth and retention of the high-end segments requires careful segmentation and sound data. These data need to provide decision makers a complete picture of their most valuable customers and establish commonalities across players. With his in mind, I have developed a player information system just for high rollers.

The High-End Player Personality Profile, Patterns, and Preferences (HEP5) is a product that enables casinos to derive maximum revenues and enhance the gaming experience of high-end customers. Unlike player management systems relying on limited information such as theoretical win and demographic data, HEP5 is a total solution for managing interactions with high rollers.

HEP5 software will allow you to store vital data on your high-end players. Typical fields of player knowledge would include:

• Name and Contact details
• Income
• Favorite Game
• Average Bet and Length of Play
• Frequency of Visit
• Potential for Pathological Gambling
• Cumulative Losses (48 hours, one month, three months, one year, total to date)
• Theoretical Losses (48 hours, one month, three months, one year, total to date)
• Comps Taken (48 hours, one month, three months, one year, total to date)
• Comps Balance
• Food and Beverage Preferences
• Accommodation Preferences
• Activities and Interests (e.g. country music, boxing, golf, hiking)
• Media Habits (Newspaper and magazine readership and TV viewership)
• Gambling Motivations (excitement, relaxation, beating the system, etc.)
• MBTI Type (based on the Myers-Briggs Type Indicator)
• Preferred Interaction/Communication Style and Approach (based on MBTI)
• Preferred Host Personality and Communication Style

Advantages of HEP5

HEP5 will provide vital personality and lifestyle data on a casino’s most valuable customers. This intimate customer knowledge will make the task of casino hosts easier as they will have precise guidelines on how to treat each high-end player so as to maximize rapport and loyalty.

HEP5 uses the dimensions of personality derived from the work of Carl Jung, as subsequently modified by Isabel Myers and Kathryn Briggs (MBTI). The MBTI test and associated model has become so famous that today many people refer to personality typing as the "MBTI," but in a rigorous sense this is not true; the MBTI is only one test instrument among several for determining personality types, though it is by far the most widely used.

In a somewhat oversimplified nutshell, personality typing as defined by Myers and Briggs, essentially assumes that much of our personality can be defined by dividing it into four orthogonal (or independent) preference areas or scales: energizing, attending, deciding, and living. Within each scale we have a preference for one of two opposites that define the scale. This makes for a total of 16 different combinations (2x2x2x2), each of which defines one particular and unique personality archetype.

There are several advantages on recording MBTI data on the high-end segment. There is a natural chemistry between individuals who share similar preferences (or personality type). Wherever possible, an individual high roller could be paired with a host having the same personality profile to ensure chemistry and smooth interactions.

Players with the same personality profile could be invited to special functions or be seated at a same table in large functions so that they will experience camaraderie and high satisfaction from the event.

HEP5 provides data on individual as well as segment-wide contribution to revenues so that management can focus on development and retention of segments that make the most contribution to revenues.

For example, management may decide to specifically cultivate those segments where the individual player contribution to revenues is greater than 0.01%. Alternatively, a decision may be made to extend focus to include all top players whose cumulative contribution to revenues is 50% (the heavy half).By uncovering the median demographic and psychographic profile of players belonging to this group, special efforts can be made through advertising and other communication channels and marketing campaigns to attract new or potential customers with similar profiles, while reinforcing the patronage of existing customers.

Conclusion

Understanding the gambling motivations of the most valuable players will provide guidelines in designing advertising appeals to attract the “right” players to a casino and thus enhance the currently low level of effectiveness of most casinos’ advertising strategies. With new casinos opening up in several areas which had thus far been monopolies or duopolies, properties located in previously sheltered markets have to increase their emphasis on the top-end customers to ensure their continued loyalty. Having greater insights into the preferences and psychology of the high-end players will prove highly beneficial for any casino’s player development activities. HEP5 provides an illustration of incorporating vital behavioral data and preference details about high-end players in the marketing information systems of casinos. Whether you use HEP5 or develop a solution in-house, make sure you harness the power of psychographic data to attract and retain your most valued customers.

____________

Date Posted: 24-Feb-2005

*Sudhir Kale, Ph.D., is Associate Professor of Marketing at Bond University and the founder of GamePlan Consultants, a company that offers comprehensive marketing consulting to the casino industry. Services offered by GamePlan include: qualitative and quantitative research on employees and customers to uncover preferences and satisfaction and to reduce churn; complete customer relationship management (CRM) consulting; designing marketing plans and advice on marketing initiatives; training on establishing rapport with customers and cross-cultural communication; and seminars on improving service quality, change management, corporate culture, and using the MBTI in organizations. You can write to Sudhir at skale@gameplanconsultants.net. For more information on GamePlan Consultants, visit http://www.gameplanconsultants.net.

 
 
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