Recent years have seen a dramatic increase in technology, resources and efforts dedicated to marketing in the gaming industry. Increased competition, 24/7 communication feed, constant upgrades of products and services and empowerment by players have generated a major shift in how casinos are operating in modern days. From product and price oriented we are forced to switch to “player oriented” strategies and, while it might sound like an abused cliché, gaming industry is alive and constantly changing because it needs to adapt and respond to human beings (Players, guests,) and quick-pace technology and competition.
There is no time for business strategy to stay still for too long. This means there is no time for the Players’ Club and Marketing strategies to remain passive either.
PRIORITY MARKETING RESPONSIBILITIES IN 2015
With differences among jurisdictions and specific locations, casino industry in general seems to be concentrating its efforts in six big goals: i) Increase traffic; ii) Reduce Churn; iii) Increase average and total bet; iv) Reduce acquisition costs; v) Improve Loyalty and Engagement and vi) improve player development (up-play & cross-consumption). In today’s industry, most of these goals fall over the marketing department and there is no surprise then that marketing sits at C-level and decision making tables.
Five marketing responsibilities have been identified to get top considerations for 2015: a) understanding players, b) marketing technology and social media tools, c) competitor analysis and d) thorough analytics and e) comprehensive and personalized TOTAL service. Aligning your Players’ experience to technology, content, and many other marketing initiatives is no easy task as you must have proactive and performance oriented human capital, keep adequate technology, contact points, multi-channel communication, controls and procedures to drive your operation ahead,
You cannot leave it to random checks nor end-of-year audits anymore. It could be too late. Evaluation of how well marketing strategies and programs are implemented, the degree of implicit and explicit risks and how well the casino works on their mitigation, is the purpose of a Marketing Audit.
As a specialized application of an operational audit a Marketing Audit in the casino industry could be defined as: “a systematic, comprehensive and periodic review of the risks associated with marketing activities used to enhance the player’s experience and increase traffic, volume and revenue by means of products and services offered within specific cultural and technological environments”.
MAIN AUDIT AREAS AND TOOLS
Inside the casino industry, we are so much worried about gaming procedures, cash controls and fraud prevention that we hardly see marketing as a risk area, But the fact that we hardly speak about it does not mean we can ignore it because, once we do, latent risks take significance and become financially costly. We have to remember that modern casino operations have elevated marketing to C-levels handling significant resources, internal and external communications, public relations, players club, issuing complimentary and other forms of reinvestment and, in many places, management of guest services among other functions.
Risk assessment and control oriented marketing audits would normally concentrate its efforts in the following areas:
1. Market and Environment- External: Regulations, gaming culture, operators, competitors evaluation, marketing and distribution channels,
2. Formal and Informal Organization: Corporate, Operational, Gaming and Marketing Structure
3. Company Strategic and Marketing Plans: Understanding Goals and Value proposition
4. Marketing Mix. Internal Environment ; Company Products, Services and Associates within the competitive market structure where is offered
5. Enterprise Management System platform and IT support
6. Marketing and Players’ Club ROI
7. Controls and Procedures
8. Customer Relationship management System (CRM). Usually audited separate but important to consider as determinant.
9. Marketing Programs development, math and operations.
10.Advertising and Promotion, both internal and external.
While, in general, finance audits tend to deal with historical numbers resulting from operations, a Marketing Audit deals with active ongoing activities directly related to day-to-day contact points. As long as you clearly define how marketing is evaluated, your marketing audit will be more directed to risks associated with those measurement areas. Do you evaluate your marketing based on revenue? Number of players? Guests and participants of your promotions and events? Communication and public relations? Limited evaluation if marketing performance could result in larger risks and exposures.
It is also clear that, as described in a previous newsletter, all audits have common areas of interests, In this case, a significant consideration and review of the information technology structure and system is vital since Players’ Club depends so much on it, At the same time, marketing and related expenses have become so significant that any financial audit must perform thorough tests and validations on its budgets and actual expenses.
MOST COMMON RISKSLack of update, control and monitoring lead to augmented operational risks and abuse of resources and systems by internal and external clients. It is always useful to know and be alert about the risks we are exposed to; Marketing is not exempted activity, especially when digital/online marketing is part of the channels and, most of all, with the increased preponderance and abuse of Players’ Clubs.
Risks also tend to happen more commonly at operations were measurement of marketing results are solely based on revenue and volume of traffic without further consideration of how results are obtained and, many times, without fully understanding or evaluating their associated costs and resulting ROI.
The Institute of
Internal Auditors has made available at least 3 important documents analyzing
in great detail associated risks in marketing. As expressed by the Institute of
Internal Auditors “Although marketing and business development functions are low
risk-profile areas, they should not be overlooked….”
From an internal auditor view, four articles introduce excellent material to further understand Marketing Audit Risks. Several of them are clearly detailed by the IIA Gaming Auditorium publications: Casino Fraud: Marketing is not Exempt by Robert Rudloff Jr. (http://www.theiia.org/Gaming/index.cfm?iid=342) and by Ron Ellis who also makes an excellent presentation of Players Club risks at “Hitting the high Points” (http://www.theiia.org/Gaming/index.cfm?iid=233). While these first two publications emphasize player’s club and casino fraud risks, a more generalized publication and very interesting read on marketing audit and casino operations is “Marketing and Advertising: Risk Considerations for Audit Planning” written by Dan Clark at Vol 10, June 2007 published by the IIA (http://www.theiia.org/ITAuditArchive/index.cfm?act=ITAudit.printa&iid=541&aid=2518). A clever and illustrating secondary headline reads; “If promoting your casino is important, then auditing its marketing efforts should be too”. Like most of us, you probably agree that Player Tracking is one of the most important tools available today for slot and marketing management, “Player Tracking Risks and Controls”, a thorough article written by Billy Byrne is also a must-read for those looking to understand the importance of marketing audits (http://www.indiangaming.com/istore/Dec13_Byrne.pdf).
Three important risks need to be considered by a marketing audit: marketing programs a) math and the use of operational resources. So many times ignored with costly negative results, b) Market Risk, or the possibility of marketing strategies and activities to experience difficulties and setbacks due to factors that affect the overall performance of the gaming markets, and c) Brand Image Risks, also called reputational risks.
BENEFITS OF MARKETING AND PLAYERS’ CLUB AUDITS
Proactive and holistic approaches to Operational Audit of your Players’ Club and Marketing Dept. could provide you with answers to several important questions, help you develop and improve information systems, analytic and betterments of the Players’ experience, improve communication and provide you with excellent benchmarking and a clear competitive advantage.
· Allows you to understand how your marketing efforts match and adapt to your company strategic goals and brand definition
· Uncover deficiencies and lack of controls
· Allows understanding of how well your associates understand the company, brand, products and services and how they are promoted
Facilitates comprehension of the necessary technology base and how is performing
· Valuates the Return of Investment (ROI) from resources used at Player Acquisition, Player Maintenance and Player Development
· Allows for Benchmarking and comparison to industry standards
· Promotes “know your players and your competitors” programs
NINE AREAS WITH QUESTIONS YOU SHOULD HAVE ANSWERS FOR
assist us in evaluating our exposure to marketing risks, here are several
questions we could ask ourselves:
· Brand, Products and Goals: Do your associates know your brand, value proposition, products and services so they are capable of marketing them to actual and potential players? How well does your brand value proposition align with your marketing strategies and performance?
· Marketing Plan and Budget: Do you have active marketing plan and budget in place? Is it flexible enough to adapt to a dynamic gaming industry?
· Segregation of Duties. Access control; is segregation of duties adequately in place? Do you review your system access and comps approvals at least weekly? Are controls and procedures in place to limit abuse by internal and external clients? What level of protection does you database has?
· External Environment: How well do you associates know the competition? Do they understand it and value properly or just underestimated by saying “ours is better, we have the most volume of traffic,” Are they aware and understand the dynamics of the industry?
· Management Information System (CEMS): Does your current Casino Management System provide you with business and market analytics or just list-reports? Are you satisfied with the metrics used to evaluate your Players’ Club performance and ROI? How frequently is it updated? Who receives and uses such information?
· Marketing Programs: Are Pre and Post forma and the math behind marketing carefully reviewed?
· Accountability and Measurement; Are your associates in marketing held accountable for the results of their activities?
· Customer Service: How relevant and personalized would you say your communication and marketing strategies are? What do your players think of them? What is the strategy for listening “the voice of player”?
· Communication Channels: How do you project your marketing efforts and keep communication with today´s players? Do you rely on direct contact? Traditional mails? Emails? Newer channels like Facebook, Twitter, Instagram…? Do you have a website? How are these mediums working for your operation and protected are they?
Marketing Audits should be an ongoing and continues activity the same way your gaming is. Make sure you understand what is going on, ask questions, be proactive and, above all, don’t leave it in auto-pilot!!
AGL360CG, SRL is a gaming consulting company addressing its services to the Caribbean and LatAm areas and with strong emphasis on gaming and marketing analytics studies, metric and KPIs development to be used by Management to support sound decisions.
Anibal Garcia, President&Founder, can be reached at firstname.lastname@example.org or by phone at (809)545-4213 / (954) 640-822.
(October 28, 2014) [Español]
One of most widely and frequently used buzz-word today is “players’ experience” and, indeed, providing it must be a significant part of operators’ priorities. While most of us stand behind “customer centric” and “know your player” theories, in general, casinos seem to be getting enough metrics, KPIs and statistical analysis on important aspects of the game like Drop, Win, Hold %, ADW, Coin In, jackpots, discounts and rebates, House Advantage Variances…and many others but not enough on the players who actually produce those metrics.
Truth is, only satisfied players are the key to sustainability and growth for any gaming operation. So, it becomes vital to keep constant observation on a set of key indicators specifically related to the players, their activities, emotions, performance, likes and dislikes.
Here are ten (10) quick and useful KPIs I have assembled to help you transfer your analysis from fix assets based to performance indicators generated by actual living entities.
1. MARKET SHARE. How much is your market share of the industry and segments relevant to you? We all know the importance of traffic to casino operations but a large and constant traffic does not mean much unless it is converted into gaming volume. Therefore, it is important to try to determine and never lose sight of both traffic and gaming volume market shares as well as on its supporting activities.
2. PLAYER’S VALUE, NET WORTH AND PROFITABILITY. It is good to know that Mr. GreyShirt comes in every week and plays hard during several hours. So much that he is considered a “whale” for your market segment. A customer´s LTV is useful for management to determine revenue stream from a player or segment but how much profit is actually brought in by a specific players after deduction of acquisition and total reinvestment related costs is even more significant and necessary to know. Lifetime Worth (LTW) becomes an even stronger KPI.
3. AVERAGE SPEND PER VISITOR AND AVERAGE WIN PER PLAYER. Have you noticed that we keep great statistics per machine, position and table but not so much per visitors and actual players? We can get much more insights and value from similar metrics but using actual visitors and players as denominators. After all, one of our goals is to attract traffic as large as possible and not to have unnecessary machines and table games. Proper segmentation analysis of the resulting metrics is mandatory though.
4. AVERAGE GAME TIME. Sometimes referred as time on device for slot machines. This is a very valuable metric and it has considerable financial implications for the whole gaming operation: resource planning and Yield Management. Even more significant, if we can correlate it with specific player segments, individual games or slot machines, table limits, etc.
5. RETENTION RATES. We all need repeated businesses. If we are not being able to keep our players coming back for more entertainment, more fun and play time we should act on this condition immediately.
6. CONVERSION AND GROWTH RATES. How many visitors from those excellent shows and par ties have turned into actual players? Have our Player’s Database productively increased? It is also worthwhile to look at the opposite metric: Player’s Attrition Rate. How many and how fast are we loosing players? For which reasons? These metrics are better used in conjunction with Retention Rates.
7. PLAYERS’ REFERRAL INDEX. How many players have visited and played, at least once, after being referred to by one of our customers? Do you keep track of that? Do you promote such references? As we all know positive word of mouth is the cheapest marketing tool and is a sign of true loyalty. This metric is widely known as Net Promoter Score (NPS).
8. PLAYER DEVELOPMENT RATE. Have you traced your regular customers to the point of being able to say that Mrs. BlackBag have increased the number of visitations? Or have doubled the amount she spends per visit? If you do not measure player development rate or do not even have a consistent program in place, you might be missing significant opportunities.
9. OVERALL SATISFACTION RATE. Here is a caveat: We all work to improve the player´s experience but we rarely dare to find out just how satisfied our player’s and visitors are. Maybe we are afraid to hear the results? In any case, if we do not have a barometer to show us where we stand and how well our initiatives are performing, we are probably just listening to what we want to hear and not necessarily the truth.
10. BRAND ATTRIBUTES GAP INDEX. We all think our gaming operation is the best and we love to hear it. But what happens when there are discrepancies between what we think our brand is valued for, what we stand for and what players think? Finding out such gap is a very valuable KPI which could assist us in making necessary adjustments to close it.
These KPIs will probably get you started in the right path. But allow me to leave you with two final comments on Player’s Metrics: 1) gaming operations are very dynamic and players even more. You need to keep frequent measurements of KPIs and how they are developing in time. A KPIs is not a static measure. 2) KPIs are powerful tools if they are used as indicators to measure the delivery of the goals. Do not let KPIs become the goal itself or it will severely limit performance improvement.
What other player centric KPIs and metric do you use at your gaming operation?
[September 23, 2014]
It is fair to say that we have grown with an adverse and negative concept about audits. The simple mentioning of the word ‘audit’ triggers in our minds images of dark suited gentlemen with briefcases, who come and ask lots of questions and requested documents with the intention of finding deficiencies, faulty books and records and procedural violations. Dark images of documents, adding machines and pens over desks being thoroughly reviewed, or the always scrutinizing eyes of the men looking at our operations from the corner and talking like if hidden secrets had been found. Finally, the terrifying audit report, the unpaid taxes assessment and the calls from headquarters “What is going on down there?”
These traditional images are good for Hollywood movies and storytelling but nothing close to modern understanding and practicing of the auditing tasks. Today, auditors are considered a business partner and not policemen. As such, casinos can extensively benefit from their services which, too frequently, are only considered as a compliance tool or when required by circumstances. No, audits are not a necessary evil but a development and strategic tool.
DIFERENT TYPES OF AUDITS: NOT ALL AUDITS ARE MADE EQUAL
All audits are independent and systematic studies of relevant data to determine how appropriate the level of compliance is to procedures, standards, budgets, goals or regulations. In general, the most known audit types in the casino industry are Financial Audits and Operational Audits. In recent years, we have expanded our recognition of the importance and value of Marketing Audits, IT Audits, HR or Performance Audits, quality audits, forensic audits, energy audits, environmental audits, etc.
Of course, they overlap and each audit will deal at different levels with the data most properly handled by others. It is common to find on their reports and recommendations frequent and valuable references to and between each type. After all, a casino business has to be assumed as an integrated effort and not the sum of individual departments. Well done financial audit will always refer to internal controls and aspects of the operation and will always have to consider IT Resources, Information access and distribution, etc. Operational audits will not only stop at verifying compliance of internal controls and other external regulations but, as described on its definitions, will have the main objective of optimizing task to make them more efficient, therefore, minimizing costs, optimizing the use of resources (including and most importantly HR) and will definitively touch base with IT Resources and Information flow (Player Tracking, Management Systems, Sots and Table Game Accounting,…). Marketing Audit, maybe the least familiar to many of us but it has acquired great relevance in recent years.
Keeping in mind that they are all interconnected, let’s talk about other types of audits which could be less familiar to many of us. Let´s start with Operational Audits.
OPERATIONAL AUDITS: DEFINITION
The Institute of Internal Auditor (IIA) defines Operational Audit as a systematic process of evaluating an organization's effectiveness, efficiency and economy of operations under management's control and reporting to appropriate persons the results of the evaluation along with recommendations for improvement. They continue describing it as “a more comprehensive form of an internal audit and, although financial data may be used, primary sources of evidence are actual operations procedures and how well they match policies established by the organization. While financial audits tend to be past-oriented and work with results of past periods of activities, operational audits are future-oriented. It tests how efficient and effective gaming operations are, which ultimately boosts revenue and profits”.
External or internal experts may perform the review, based on the needs of the business. This process has some disadvantages, such as potentially high cost, but it also offers advantages, such as new perspectives and increased risk awareness. These professionals are not otherwise associated with the businesses they audit, so they can provide a fairly objective opinion. Stakeholders often prefer using their services to internal auditors to get information because of this lack of bias, but hiring an outsider usually is more expensive.Relying on an employee to perform the job carries the risk that the ending figures or analysis won't be entirely accurate, because an individual sometimes gets a bonus or pay increase based on how good the results are. On the same token, some internal audit departments are not quite as independent as they need to be and constraints on their findings and reports are sometimes self-imposed. Also, management is so close to the operation that could neglect to adequately see what lies behind and improvement areas. Finally, use of internal resources could also be limited by time and availability as a result of their importance to day-to-day operations.
WHY IS IT IMPORTANT TO YOU?
What normally happens is that management gets a reasonable idea of how healthy their gaming operations are based on financial audits, daily, weekly or monthly reports and their casino management system. Financial and operational performance as expressed by reported numbers and KPIs could then signal to specific areas which are not performing or could perform better when compared to budget, guidelines, benchmarks and budgets.
As we know, casinos are a fast pace operation with growing competition and higher demand for “value added service and entertainment” by players. It is normal that, in the heat of a demanding and absorbing routines, casino management would need to turn to independent Operational Audits for further research and explanation of those resulting financial indicators and to get a better and clearer picture. The results not only show controls and procedures weaknesses but also significant areas of improvements.
To summarize benefits of Operational Audits:
ü Provides supporting and expanded documentation of Financial Audits
ü Helps identified weaknesses in the controls and procedures of the operation
ü Signals potential areas for improved efficiency and profitability
ü Helps management to better understand roots of problem areas better than just looking and financial statement and daily reports
ü Provides new and fresh perspectives
Helps to identify areas to minimize use of resources
SIGNIFICANT RISKS, MAIN APPLICABLE AREAS AND TOOLS
It is assumed that most casino operations have extensive documentation regarding controls and procedures but, many times, lack of interest, non-compliance or non-reinforcement, changes in operations, developments and evolution, among other reasons, cause these manuals and guidelines to become “books on shelves”, obsolete and non-applicable. Day to day operations also lead into their own procedures which, depending on the training schedule and management attitude, pass from one employee to another and, at worst circumstances, end up causing major distortion and allowing “weak control areas” abused by both the internal (employee) and external clients(customers). This is very common at small to mid-size operations under jurisdictions which are very poorly regulated and/or single and family owned casinos.
Although each area has specific risks and auditing steps, there are several common objectives for casinos which can be summarized as follow : i) Cash and assets Controls; ii) Adequate surveillance for all transactions; iii) Independent reviews of transactions performed timely ; iv) Review access to all IT systems; v) Ensure personnel has an adequate knowledge of operations; vi) Proper Accounting and Reporting processes and tools; vii) Compliance to jurisdictional regulations and programs; viii) Ensure actual procedures in operation match the Internal Control and Procedures Manuals and satisfactorily comply with appropriate MICS; ix) Human Resources and appropriate segregation of duties; x) Evaluate how well marketing plans and strategies adapt to the casino culture, brand and needs.
We all know “cash is king” in the casino industry but increasing needs for compliance, security and proper management of risk areas has helped expand awareness for operational audits. It comes to no surprise then that the main areas of application for Operation Audits are: Casino Cage Operations, Slots Club and Loyalty Rewards Programs, Table Games Procedures and Slots Operations. There are 3 other departments which have become so significant that special procedures and audit techniques have been developed from the general Operational Audit standards: Marketing, IT/Data and Management Information Systems and Human Resources policies and Procedures. Some professionals have added surveillance as an area of importance to try to answer the question: Who audits surveillance?.
More specifically, here are some areas of interest where Operational Audits and its techniques can be highly beneficial : MICS and Compliance, Cash Handling and Reporting (“follow the money” programs), Game Protection, Operational Analysis and Research (Table Games, Slot Machines, Hotel-Casino relationship, Amenities---), Floor and Revenue Optimization(Inc. Yield Management), Secret Shopper, Market Research and Intelligence (links to Marketing Audits), Hotel-Casino Relations, Entertainment and other Gaming Areas of Support (Lounges, Sport book, Bing Parlors,…).
BORROWED BUT USEFUL TOOLS
Although it is normal and expected to relate operational audits and research with production industries, there is no limitation to apply its techniques and methodology to casinos and gaming operations as a whole since service is to be considered a product and, recently, other non- gaming operations have become very significant to the overall productivity of corporations.
In this area, the casino industry benefits from tools originally created to be used in the manufacturing industry but fully applicable to gaming. To mention the most well-known ones: SIX SIGMA, Theory of Constraints (TOC), Lean (aka Elimination of unnecessary costs and resources), Benchmarking, a technique that allows a manager to compare metrics, such as quality, time, and cost, across an industry and against competitors and Total Quality Management (TQM) which Simply put, it is a management approach to long-term success through customer satisfaction, Operations Research techniques and methods and, of course, ,, . Of course, we could not end this short list of main tools without mentioning the extensive and comprehensive areas of Business Analytics and Intelligence which most of the current Management Systems include as part of their suits.
In essence, it is important that we see audits as development tools and auditors as business partners. It is also important that we look into other forms of auditing beyond the traditional finance and accounting audits, After all, numbers come from somewhere and always signal areas were controls and procedures can be improved.
7 AREAS OF GAMING ANALYTICS
AND BI WHICH SHOULD BE PART OF YOUR 2014 BUDGET AND RESOLUTIONS
Contrary to common perception, Holiday Seasons are not always the best times for the gaming industry even for local gaming operations let alone for many destination resorts. Disposable income seems to go to other sources of entertainment and to the retail industry for family gifts, dinners, parties, fun. It is January. Time to come back to normal and take some time to consider some actions which could help you prepare for 2014.
Every year, an obvious resolution is to get better at providing, organizing and accessing valuable information by relying on useful tools. This includes making sure management team has the right data to assist you in making the right decisions. Your team can also be more efficient when the right information is available at the right time and can be easily visualized leading to more accurate assumptions and taking advantage of opportunities.
Basic numerology for 2014 would make us think that is going to be a good year for gaming. After all, its numbers add up to 7. Yes, your lucky number seven. With a more competitive gaming industry, maximization of volume and profits are a most-attend priority for management. Whichever strategies are used, they will be evaluated based upon the level of maximization and profitability achieved.
But you cannot control or manage what you cannot measure let alone optimize it. While the playing field in the gaming industry has become more intricate and many obstacles in different jurisdictions are being confronted, there is a wide range of opportunities out there. It can be forecasted that analytics and business intelligence will get a much stronger use in the gaming industry in 2014 and will become a significant and most valuable tools. Furthermore, operations could really use information as their competitive advantage.
Let us review 7 significant areas from Gaming Analytics and Business Intelligence and see if there is something missing in your current system or if there is some area which you would like to improve and, like number 7, bring some magic into your operation to reinvent, re-launch or revitalize your brand.
AREA # 1: ROI from my CMS which meets my goals?
It is very important to understand the resources you currently have and maximize its usage. Your CMS is one of them. How much valuable data does it is produce to help you manage and make the right decisions? And, at what cost?. The CMS market has been growing every year but so have its acquisition and operating costs. While there many excellent systems out in the market – mainly from same games manufactures – it is necessary to determine their Return on Investment (ROI) to properly evaluate the one you use. In terms of analytics, here are some important factors which you should look at:
i) How much is the total cost of your CMS? How much operating cost? Maintenance fees?
ii) How much data/information does your company get from it? Will such data/information be actionable? Will it really assist me in taking timely decisions? Or is it just basic and mandatory reporting?;
iii) Have hidden costs been considered? How much additional hardware and IT Human Resources are needed? Is additional training required? At what cost?
iv) How customizable is it? Are changes and upgrades easy to obtain or are they too burocratic, time consuming and expensive?
v) What percentage of your system capability do you use? How much do you really need?
vi) How is data presented to management? Tabular reports? Graphics? Customizable?
vii) What level of analytics does it provide? Or is it just a compendium of past results?
Whatever system you have, make sure your data is properly interpreted and leads into decisions to take actions Use technology to increase efficiency and facilitate the decision making process not just to print nice reports and the pride of being able to say : we use XYZ Casino Management System.
AREA # 2 : Useful and Actionable Metrics and KPIs
Every day your system provides you with regular metrics like Drop, Hold %, Coin In, Par, Win/Loss, F&B Sales,….Usually for the day, M-T-D and Y-TD. Some even comparisons vs. L-Y-T-D, But how productive are they to you? Are these numbers comparable? Do they show any trends? Do they show actions points or do you have to sort through different reports and combine them to get the information you need? Are these metric obsolete? What about hotel relationship and non-gaming revenues if and when applicable?
It is a good time to look into additional insights, metrics and KPIs. Areas like admissions or visitors, pricing of table games (limits) and slot machines (denominations, min and max, etc.), yield management, line item, usage percentages…. They will assist you in expanding your operations as well as obtaining a better audit of your operations.
Preparing a list of metric and KPIs by area of operation could be a valuable project to undertake with your management team. Once you determine what is needed to make the right decisions at the right time, you can go back to your CMS/BI Software and evaluate how many of your requirements are produced and which others are missing.
AREA # 3: Total Reinvestment on Customers, Loyalty Programs and Player’s Club
Make sure you know how much are your total expenses on customers and what part of it can be considered a re-investment of your gross gaming product to keep your good players in-house, create loyalty, keep a good retention % and increase repeated business. You would be surprised to see that your best players might not be getting the best comps.
If you do not have proper market segmentation and clustering analytics you will not be able to deliver personalized customer service and experience and at the right price.
While the above might sound directly from a casino marketing book you would also be surprised how many managers, marketers and casino directors are not creative enough and just copy promotions fromneighbors and do things afraid that, if they do not, players are going to fly out the door to the competition. When reviewing your financials, look deep into this line item.
But that is not enough. Get this information by market segments, by game and, if possible, by players. Recency, Frequency and Monetization are only the necessary bare bones of a good segmentation system. There are many significant areas for your specific market which can assist you in improving your customer service and deriving the maximum return from your strategy.
AREA # 4: Visualization and ‘drill down’ Capabilities
It has been said that a picture is worth thousand words. Visualizations of data can be worth millions of words and numbers. Imagine what a dynamic dashboard with drill down capabilities could do for you and your management.
The more visual your data is presented the easier for you andthe rest of management to better understand relationships and identify patterns and trends. Being capable of drilling down your summarized data up to the point you actually need it will greatly reduce the time you use to read and understand reports which, otherwise, could look empty and nonsensical.
Can your CMS give you drill-down capabilities or do you have to print 3 or 4 different reports to get your answers? How is the data presented: in a simple tabular form with hardly no comparison metrics? Nice graphics only or both? The way data is presented to you and how much detail is available will determine how much valuable information can be derived from it.
AREA # 5: Maximizing available resources with Yield Management.
In general, casinos
face a basic size restriction. Unless some remodeling creates additional space
the gaming floor is generally a well defined one. Therefore, why not maximize
it using analytics and yield management? How many slot machines and table games
do I really need to make the best use of available space while making sure
customers feel good about the environment and service people can do their jobs?
Not because your competition has more machines and/or table games you actually
Maximizing resources and observing the law of diminishing return is significantly important.
Some questions to get you thinking:
i) What about table games limits? Are they properly manage and adapted to your regular and special days of the week clientele?
ii) Do you open the correct amount of games available at a given time of the day or day of the week?
iii) How many hosts/hostesses? How many Supervisors and Floormen?
iv) Do your dealers spend too much time shuffling in card games? Or, are too crowded roulette tables costing you valuable spins and decisions?
v) Do your slot machines and banks take too much space but produce less?
vi) How long does it take a waitress to serve a drink to a valuable customer sitting at the rear end?
Maybe you have been underestimating the value of additional opened tables or downtime is affecting your revenue by not having popular games on the floor at the right time. Or maybe is just the opposite and you are not properly adapting visits and volumes to correctly arrange your working schedule. Yield management can also help you maximize your human resources not only by reducing costs but providing you with a balanced gaming floor and smoother operations benefiting you and your customers.
AREA # 6: Understanding the market and being competitive
You might think you have sufficient data on your customers and operations coming from your current CMS system. But so does the competition. In 2014, you should move from gaming analytics to market analytics or competitive intelligence. Armed with powerful sources of information for intelligence on competitors, industry trends, and markets you should be able to obtain a much better SWOT analysis on yourself and your actual and current market.
After all, gaming markets are not growing as fast as
competition for the customers’ wallet. Even in good economic times it has
become harder with competitors coming from both direct and indirect areas. In
addition, traditional gaming is being affected by generational change and we
have not prepared for it.
By reducing uncertainty, maximizing awareness and keeping you alert, business and Competitive Intelligence should be able to keep you up to date in areas like: competitive prices, promotions, comps and reinvestment techniques, branding, new products…
How about some conjunct and sentiment analysis to find out which attributes your customers really like and how important they are for them?. After all most casinos have the same table games, the same slot machines and provide cash raffles, comps and similar amenities. It is time you know what makes you different? What is your edge?
AREA # 7: Pay More Attention to Social Media, multi-channels and your customers.
Social media has existed much before Facebook and Twitter. We used to call it ‘word of mouth’ and, while it did not travel so fast and it did not reach so much exposure, it has always been your best marketing tool. Do you know what your customers think of your operation when you are not there? What do they say to their friends? Is your referral program working at all? How many of them are really loyal to you or move from one casino to another based on what they get at specific time?.
Lots of data alone does not mean anything. You need context sentiment analysis tied with good segmentation and clustering based on as many variables as possible to help understand better your customers. Data coming from different channels and scenarios should also help you understand better your operations and value proposition as understood by your customers.
Some final words of advice: Do not fall for the trap of buzzwords like Real Time Data or Big Data. Do not fall into the Internet-Speed-Syndrome which has made us believe and think everything should occur as fast as in the internet: We do wire transfers, hear music, shop and read almost instantly online, but the real world is something else and, unlike in the production industry, the brick and mortar gaming industry still needs to process information and pass it thru some decision making levels. You need Insightful Right Time Data easy to correlate and visualize and only analytics and BI can give you that. Take ‘gut feeling and voodoo’ out of your gaming equation!! Taking this path could represent thousands of dollars in savings and much less stress
How can we help you evaluate, implement and develop some of these areas?
AGL360CG, SRL is a consulting firm dedicated to provide advanced techniques and tools to the gaming and leisure industry so that Management uses their time to provide customer service and warrant a positive total experience to their visitors instead of spending time to produce data which, most of the time, does not get even looked at. Our core services concentrate on business analytics and intelligence, operational and financial audits, design of dashboards and providing market analysis and research. Useful and applicable to your individual operations but with a clear view of the total gaming and leisure market in which you operate in.
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