THE ROI QUESTION: ANSWER IT BY MEASURING GUEST ADVOCATES

By Martin R. Baird

“What gets measured gets done. What gets measured and fed back gets done well. What gets rewarded gets repeated.” – John Earl Jones

Casino managers who want to improve their property’s customer service have lots of questions for people like me who help them reach that goal. But the most frequently asked question is this: what will be my return on investment?
I’ve been a consultant to the gaming industry for many years now and I’ve always hated that question. I could give mountains of anecdotal evidence and show reports on how much guest complaint calls to tribal leaders had declined. But the chief financial officer would always get back to that one issue and say, “Marty, that is very impressive. But what was the ROI?" The import word in that question is “investment.” Too many casino executives view a measurement and improvement program like ours as an expense when, in reality, it's an investment in the casino and its people. I realize what we do is not like bricks and machines that they can show on a balance sheet, but it's still an investment nonetheless.
The challenge has always been measuring the outcome of the investment in improvement. It's difficult to say that quality service created a revenue increase when slots managers claim it was the new mix of machines. Or the CFO could attribute higher revenue to the area’s growing economy. Here’s one of my favorite executive explanations – the weather. It was warm, so business was up. The next quarter, that same person would say business was good because it was cool and rainy. I'm not sure how that works but, then again, I'm not a CFO.
This has all changed with some wonderful research that was published by Harvard University and further studied by the London School of Economics. Researchers found that by tracking customer "advocate" levels, they could arrive at a very high correlation to the future growth of a business. In other words, the higher the level of advocates, the more likely the business was to grow. Now pay close attention to what I say next and re-read it. When I use the term advocate, I’m referring to a very specific and highly studied form of measurement. If you hear that word used as a generic term for guest satisfaction in gaming, please understand that guest advocates and satisfied guests are not the same thing. Advocacy and satisfaction are worlds apart.
This research found that in some industries, the correlation between the measurement of advocates and future growth was as high as 98 percent. In gaming, we have found that it’s lower, but a mid-80 percent correlation from tracking advocacy is better than any other measurement tool available.
In his quote at the top of this column, John Earl Jones, a training and organization development expert, says what gets measured gets done. I totally agree. Unfortunately, if your casino is only measuring guest satisfaction, your hard-working employees are chasing a score that has absolutely no correlation to the future growth of your property.
That brings me to the next line of the quote. Who decides what is getting done well? Is it the CFO who fixates on ROI? Is it the GM who strolls through the casino and sees nothing but smiling employees? Is it a mystery shopping company? Mystery shoppers do serve a very important role. They can identify serious defects in your service delivery. They see with real eyes what your guests see each day. But a mystery shopper doesn’t measure a guest’s advocate level. It's critical to measure what is important to your guests and the next step is feeding that data back to both guests and employees. Much of the resistance to service-improvement programs comes from team members who are not clear on why the improvement is being done. At a casino that’s already successful, it’s hard to get employees to understand that it’s all too easy to fall from the mountaintop. Your property could be "the" casino of choice today and just an option in a few months. People are fickle and what made you the casino of choice could change simply because you stopped providing service that matched guests’ wants and desires.
The final part of John Earl Jones’ quote deals with moving people from an existing pattern of behavior to a more desired behavior that’s repeated again and again. As I mentioned earlier, all employees smile when the GM walks by. Everybody knows that. So how to you get them to repeat that simple, basic behavior with each guest? I know it sounds corny, but guests appreciate smiling employees. It's important to add that this behavior must be sincere or it looks like a bad skit on Saturday Night Live.
It takes a system to move people from how they behave on the job now to how you want them to consistently behave. It’s not enough to just hand out random rewards that create more of an entitlement mentality than the understanding that behaviors have direct consequences. Consequences are both positive ($25 gas cards) and negative ("you don't fit our vision for the future.") If people see themselves as insulated from consequences, the inmates are soon running the asylum. Set expectations and hold people accountable.
I know I’ve covered a lot of territory here, so let’s summarize. If you want your casino to be more successful, what you measure to get there is critical. Credible research shows that guest advocates should be measured. A system of internal improvement that results in desired employee behaviors will create more advocates. Employees must be kept in the loop so they understand why improvement is important. Advocacy has a high, measurable correlation to future growth. And there you have it – an ROI based on proven, definable results.

This article first appeared in Native American Casino.

Date Posted: 03-Sep-2007

Martin R. Baird is author of “Advocate Index™: An Operational Tool” and chief executive officer of Robinson & Associates, Inc., a global customer service consulting firm for the gaming industry. Robinson & Associates helps casinos worldwide determine their Advocate Index, a number that indicates the extent to which properties have guests who are willing to be advocates, and then implements its Advocate Development System to help casinos create more guest advocates. The Advocate Development System uses the proven methodology of Advocate Index in combination with best business practices to chart a course for growth and profitability. More information about the Advocate Development System and Robinson and Associates is available at the company’s Web sites at www.advocatedevelopmentsystem.com and www.casinocustomerservice.com. A copy of “Advocate Index: An Operational Tool” may be obtained by calling 206-774-8856. Robinson & Associates may be reached by phone at 480-991-6420 or by e-mail at mbaird@casinocustomerservice.com. Based in Annapolis, Maryland, Robinson & Associates is a member of the Casino Management Association and an associate member of the National Indian Gaming Association.