Do You Hear the Flushing? Money Down the Drain

by Martin Baird

I was at a gaming conference recently and an industry marketing consultant talked about a publicly traded gaming company that spends 37 percent of its revenue on marketing. I know of a property in a very competitive market that spends more than $1 million a month on marketing.
Why all this spending? Casinos say they need to be seen to keep guests coming through the door so they can grow. Their message simply must be seen, heard and read on TV, radio, outdoor displays, direct mail and, of course, print ads.

I understand this concept. Unfortunately, much of this money is going right down the toilet. Gaming properties are throwing away precious revenue. The same property that spends millions on marketing balks at investing one or two percent of that marketing budget on training its people. Or on putting together a meaningful reward and recognition program for employees to encourage them to give their guests an outstanding gaming experience. They just can’t find the money.

There’s a better way. How about devoting a sizeable chunk of money to retaining existing guests and spending less on trying to bring new ones in? How about focusing on giving guests a reason to become repeat customers and worrying less about newcomers?

There’s a marketing adage that says it’s 10 times more expensive to get a new customer than it is to keep an existing one. There’s a lot of truth to that. So it makes good fiscal sense to invest in employee guest-service training and a reward and recognition program to reinforce that training so your people are doing everything they can to keep guests happy. Great guest service is critical to success.

If you could reduce your marketing expense and increase play, wouldn’t you be more profitable? If your guests had a better time while they’re at your property, wouldn’t that lead to increased play? Marketing and quality guest service each serve their own purpose and they can work hand in hand. Marketing’s responsibility is to generate trial. However, while it can set the expectations, it can’t control the guest’s experience. If your marketing shows happy, smiling dealers and spectacular food, that is what guests will expect. Now each person who works at the property must be trained to deliver that and more.
So if marketing is spending all this money on getting new people to visit your property, what is human resources investing to help your people have the skills they need to give guests great service? Employees aren’t born with the amazing guest-service gene. New behaviors must be encouraged and that takes training and setting standards.
Here are a few things to think about as you roll out training and reward and recognition programs.

If you want an employee to smile while assisting a guest – or demonstrate any other kind of service-oriented behavior – it helps if they understand why they should do that. It also helps if they know how this new guest-service behavior affects them directly.

Knowing that management wants them to smile is not enough to create change. People need to know how it affects them so they will consider making the behavioral switch. Employees need to know how improving guest service affects their wallet, not the company’s bottom line. After all, people are more interested in themselves than others.
The human tendency to be self-centered makes it a challenge to improve guest service. Employees have to start thinking less about themselves and more about the needs of others. That makes guest-service training a priority because the people working at your property must see the guest as the most important person in your business. Ray Kroc, the famous founder of McDonald’s, put the customer on a pedestal. He knew that for McDonald’s to succeed, it needed to focus on the customer more than the burgers, milk shakes and fries. He was right.
The same is true in gaming. If more attention is placed on the guest, the property will be more successful.
So how do you get marketing and human resources to work together so that one of them doesn’t spend its gigantic budget bringing in new guests only to have them quickly leave because they didn’t win and get the level of service they expected? It takes a team approach. Both sides need to work together. Just getting new customers isn’t enough. You need to generate trial and then get them to stay because of the wonderful service they receive.
If you can’t accomplish that, then you’re just flushing marketing dollars down

Date Posted: 28-Jan-2014

Martin R. Baird is chief executive officer of Robinson & Associates, Inc., a Boise, Idaho-based consulting firm to the global gaming industry that is dedicated to helping casinos improve their guest service so they can compete and generate future growth and profitability. Robinson & Associates is the world leader in casino guest experience measurement, management and improvement. For more information, visit the company’s Web sites at www.casinocustomerservice.com and www.advocatedevelopmentsystem.com or contact the company at 208-991-2037. Robinson & Associates is a member of the Casino Management Association and an associate member of the National Indian Gaming Association.