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The New Era of Technology in Casino Marketing

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June 12, 2015
Gaming Loyalty
Bill Geoghegan - Bill@LGTconsulting.com

In his 1949 novel “1984,” George Orwell invented the fictional dictator “Big Brother.” Signs throughout Oceania warned “Big Brother is watching you.”

Some accounts vary, but in general, several sources agree that there are six American generations: Pre-Depression (pre 1930), Depression (1930-1945), Baby Boom (1946-1964), Generation X (1964-1976), Generation Y (1977-1994) and Generation Z (after 1994).

Prior to the ‘70s most American adults of the Pre-Depression and early Depression era population followed a similar path in life. For men the path was to join the military or go to college, get married, start a career, have children, work for 30 years, and then retire. Women were either married and stayed home running the household and raising children, or became a teacher, a nurse or a secretary. Of course, there were exceptions, but in general, people were dependable. Companies marketed to specific gender and age groups by advertising on radio and TV and in magazines and newspapers based on the average age and gender of the viewers or readers. Customers paid with cash, and were generally anonymous unless they were repeat patrons recognized by the merchant.
By the early 1980s, everything had changed. Advertisers began using what they called “generational marketing” instead of defining everybody by gender and stage of life. Marketing took into consideration things like demographics and socio-economic factors when targeting their customers. The later Depression-era and Baby Boomers could no longer be depended upon to go neatly through the stages of life. Women entered the workforce in all professions. Many families had two incomes. They paid by credit card, which allowed merchants to identify their repeat customers simply by method of payment.  Computers became ubiquitous, allowing companies to begin analyzing their customers.
By the mid-‘90s, marketers began to realize that generational marketing is not going to be enough to keep up with the shift in culture and attitudes. Advances in technology like analysis of data from credit cards and loyalty programs became the source of what is known as cohort marketing, or marketing to groups of people with similar experiences. With the ability to track data such as past purchasing patterns, it was possible for marketers to pick out specific groups of consumers for targeted advertising. Age groups no longer equate to a stage in life. Couples were waiting until later in life to marry or start a family. Two-income families changed purchasing patterns. Asians, Hispanics and African-Americans have different experiences and different values, and therefore were addressed differently from a marketing perspective.

In today’s world, things are changing rapidly. We are able to capture so much data and analyze it so quickly that marketers can target both current and potential customers with pinpoint accuracy. The “connected generations” are no longer just Generation Y and Z.  Retired post-Depression, Baby Boomers and Generation X are embracing technology. Retirement communities are holding classes in the nuances of computers. These individuals are wielding smartphones, taking selfies and learning to take advantage of what the latest technology has to offer.

One of the most basic concepts in marketing is it is far easier to sell products and services to existing customers than to someone with whom you don’t have a relationship. As a corollary, the second easiest sale is to a person who has already expressed an interest in your product or service.

We often hear terms like Big Data where masses of dissimilar data are analyzed to find common threads. Search engines like Google, Yahoo and Bing can link advertising to products and services for which a consumer has searched. A person who has looked for a hotel in Las Vegas might be offered a list of hotel discounts on a news or blog website completely unassociated with lodging the next time he visits that site.
In the early days, casino marketing was done primarily by hosts, who would develop a contact list of players who would be personally invited to the resort, or the host would be contacted by the player requesting accommodations, etc. Most of these were table game players, and the slot machines were diversions. As slot machines became more popular, casinos began collecting data on slot play based on coin in metering. Players were categorized into player levels based on the amount play in slots or the duration of play and size of their bets at table games. There were relatively few methods of communicating with players and many of them were quite expensive. Advertising on billboards and direct mail campaigns were the primary contact points between a casino and its players. Casino player lists were highly guarded classified information. Sending out direct-mail postcards, letters or flyers was a significant expense and casinos paid dearly for premium signage.
When a player called a casino to make a reservation, a well-trained agent could offer dinner and show reservations, room upgrades and other potential add-ons to maximize the revenue to the casino hotel. Players at various levels were given “comps” based on their category.

The Internet, email and player clubs have changed the way in which casinos are able to market to their customers. As a larger percentage of bookings are made over the Internet, casinos are able to embrace social media and social networking, as well as use emails and text messaging to upsell their players.

Although casino hosts are still the point of contact for high rollers, the largest player clubs, such as Caesars’ Total Rewards and MGM Resorts International’s M life now allow players to accumulate points based on their play, and exchange those points to pay for rooms, meals, shows and merchandise.  M life players are incentivized to visit sister properties with free points for each visit. Linking a social media account can earn credits, as can posting a location-tagged tweet or Instagram photo. Like many loyalty programs in the travel industry, reward points can be earned and spent on airfare, cruises, rental cars, etc.

M life has partnered with Visa in a program that provides special show ticket offers to guests who have opted in. Purchasing tickets to a show might trigger an offer for a restaurant discount, or a retail purchase using the Visa card could generate a special discount at another store in the Aria mall. Offers are delivered via email or text message.

When Harrah’s merged with Caesars in 2005, its Total Rewards program had well over 40 million members, and alone was valued at more than $1 billion. It was merged with Caesars Connection Card program in 2006, and allowed players to earn points at an affiliated location and redeem those points for lodging, food and entertainment at any of nearly 40 properties. Affiliations with stores, travel and transportation companies allow the player to earn and spend points through other channels.

Boyd Gaming recently launched B Connected Mobile which is the first multiproperty loyalty program-based iPhone® app. Card holders can earn “social points” by using various features of the app, and by making room reservations through the app. It also offers notifications such as Offers Watch, which alerts a customer with a new personalized offer from Boyd, and Slot Watch when a new slot machine is installed at his or her favorite property.

The accumulation of data is now ubiquitous. Today, Big Brother follows every website we visit, every subscription, everything we search, view or buy, even our current location. That data can be used by marketers to pinpoint possible sales. Text messages and emails cost virtually nothing to send, and as we get more sophisticated in the exchange of data among partners, expect to be presented with even more timely “opportunities.”

Bill Geoghegan is a consultant in Las Vegas. He can be reached for comment at Bill@LGTconsulting.com.

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