Demystifying Casino Marketing and Customer Service
Demystifying Casino Marketing and Customer Service
Sudhir H. Kalé, Ph.D.Bond University, Australia
sudhir_kale@gameplanconsulta
Sudhir H. Kalé, Ph.D.Bond University, Australia
sudhir_kale@gameplanconsulta
©Sudhir Kale, 2004
“There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.”-Sam Walton
©Sudhir Kale, 2004
INTEGRATING STRATEGY
Organizational Capital
Information Capital
Customer Value Proposition
Culture Leadership Teamwork Alignment
Human CapitalLearning andGrowthPerspective
InternalPerspective
OperationsManagementProcesses
CustomerManagementProcesses
InnovationProcesses
Regulatory andSocial Processes
Product/ServiceAttributes Relationship Image
CustomerPerspective
Improve Cost Structure
Increase AssetUtilization
Expand RevenueOpportunities
Enhance Customer Value
FinancialPerspective
Long-TermStakeholder ValueProductivity
StrategyGrowthStrategy
©Sudhir Kale, 2004
SESSION AGENDA
• Who are my customers?• Segmentation and targeting• Lifetime value• Determinants of customer experience• Internal marketing and customer experience• SERV-QUAL model• Conclusion
©Sudhir Kale, 2004
• Games played
• Amount wagered
• Ethnicity
• Location
• Demographics and Psychographics
WHO ARE YOUR CUSTOMERS?WHO ARE YOUR CUSTOMERS?
Location
Customer
Characteristics
Customer Behavior
©Sudhir Kale, 2004
HOW ARE YOU TARGETING? ALL CUSTOMERS ARE NOT CREATED EQUAL!
HOW ARE YOU TARGETING? ALL CUSTOMERS ARE NOT CREATED EQUAL!
Considerations for targeting:• Proximity• Profitability• Competitive Advantage• Numbers
©Sudhir Kale, 2004
APPROPRIATE BASIS FOR TARGETINGAPPROPRIATE BASIS FOR TARGETING
• Customer lifetime value (LTV) is the estimated profitability of a customer over the course of his or her entire relationship with a company.
• A study by Deloitte Consulting (as cited in Fredericks, 2001) shows that companies who understand customer value are 60% more profitable than those that do not.
©Sudhir Kale, 2004
CUSTOMER LIFETIME VALUECUSTOMER LIFETIME VALUE
RecurringRevenues
Recurring Costs
NetMargin
Lifespanof a
Customer
CumulatedMargin
Acquisition Costs
CustomerLifetimeValue
CLV = (RR – RC)Y – ACP = [(RR – RC) × Y – AC] × C
©Sudhir Kale, 2004
WHAT TO KNOW ABOUT YOUR CUSTOMERS?
• Current Value: How valuable is this customer to the organization right now?
• Share-of-Customer: How much of the customer’s gaming activity with your organization?
• Future Value: How valuable is this customer likely to become in the future?
• Expectations: What are this customer’s service expectations?• Attrition Risk: How likely is this customer to leave?• Channel Preferences: How does this customer prefer to be
communicated with?
©Sudhir Kale, 2004
MARKETING METRICS DECOMPOSITION
Profit andROI
Metrics
CustomerValueManagement
MarketingTeam andCampaigns
Customer ROI
CustomerSatisfaction
Effectiveness
EfficiencyandProductivity
CP/CLV
CustomerBase growth
$ RevenuePer
Campaign
# ofCampaigns
$ Cost perCommunication
©Sudhir Kale, 2004
INTERRELATIONSHIPS IN REVENUE FLOWS
Retail
Casino
Shows/ Entertainment
Restaurant and Bars
HotelConvention
©Sudhir Kale, 2004
CASINO EXPERIENCE
CASINO
SLOTS TABLES HOSTS
F&BCOIN CAGE
SHIFT MANAGERS AND SUPERVISORY STAFF
MARKETING ADVERTISING SERVICESCAPEH
R DEPA
RTMEN
T
©Sudhir Kale, 2004
RELATIONSHIP LEVELS ACROSS CUSTOMERSRELATIONSHIP LEVELS ACROSS CUSTOMERS
Partnership
Proactive
Accountable
Accountable
Reactive
Basic
Accountable Reactive Basic
Profit Margins
Number of Customers
Many
Medium
Few
High Medium Low
©Sudhir Kale, 2004
CUSTOMER LOYALTY AND RETENTIONCUSTOMER LOYALTY AND RETENTION
Number Of Customers
Defection Ambivalence Loyalty
Outraged Dissatisfied Satisfied Delighted
75% of defecting customers report satisfaction with vendor!
©Sudhir Kale, 2004
WHAT’S REQUIRED TO RETAIN AND GROW TARGETED CUSTOMER BASE?WHAT’S REQUIRED TO RETAIN AND GROW TARGETED CUSTOMER BASE?
• Organizational Orientation• Configuration• Information
©Sudhir Kale, 2004
ORIENTATIONORIENTATION
• Making customer retention a priority• Openness to sharing information• Emphasis on internal marketing• Giving employees wide latitude to satisfy
customers• Different customers treated differently on
the basis of their lifetime value
©Sudhir Kale, 2004
CONFIGURATIONCONFIGURATION
• Structure of the organization• Its processes• Incentives for building relationships
©Sudhir Kale, 2004
INFORMATIONINFORMATION
• Customer information that is in-depth, current, relevant, and available in all parts of the company.
• Information provides inputs for campaign management and for designing customer experience.
©Sudhir Kale, 2004
CUSTOMER INFORMATIONCUSTOMER INFORMATION
• Strategic Intent: What information is required for the business to survive and grow in a customer-centric fashion?
• Strategic Understanding: What needs to be done to make use of the data/information once captured?
• Standards: Ensuring consistency across the organization as to what a customer is and what s/he represents.
• Systems Architecture: Ensuring that robust and scaleable business systems are put in place.
• Statistics: Using the right tools to turn masses of data into actionable customer management information so that customer knowledge is uncovered and used directly by those that can actually use it.
• Smart People: Using smart people to interpret, innovate, and action the knowledge.
©Sudhir Kale, 2004
INTEGRATED FOCUSINTEGRATED FOCUS
Information
ConfigurationOrientation
Customer Experience
©Sudhir Kale, 2004
INTERNAL MARKETINGINTERNAL MARKETING
“…Above all, employees will be provided the same concern, respect, and caring attitude within the organization that they are expected to share with every Southwest customer.”-- from Southwest Airlines’ mission statement
©Sudhir Kale, 2004
ORIENTATION AND INTERNAL MARKETINGORIENTATION AND INTERNAL MARKETING
• Help employees make a powerful emotional connection to the brand and to the services you sell.
• Help them understand what you have promised your customers.
• Make them believe in the brand and the company.• Make employees feel unified and inspired by a
common sense of purpose and identity.
©Sudhir Kale, 2004
INTERFACING PERSONNEL TRAININGINTERFACING PERSONNEL TRAINING
• Comprehending and buying into the customer promise.
• Using available customer information.• Relating to customers based on customer value,
personality, preferred interaction style, and culture.
• Ensuring that processes are internalized and that behaviors are in accordance with the established metrics.
• Ensuring consistency in customer experience across touch-points.
©Sudhir Kale, 2004
INTERNAL AND EXTERNAL MARKETINGINTERNAL AND EXTERNAL MARKETING
HR PracticesEmployment SecurityExtensive TrainingGenerous Rewards
Sharing Information
Employee Empowerment
Reduced Status Distinctions
External ServiceQuality
External CustomerSatisfaction
External CustomerLoyalty
Internal Customer
Internal Customer Loyalty
Job Satisfaction
Trust inManagement
Internal Customer Behavior
Extra-RoleBehaviorsDirected at External Customers
++ +
++
Internal Marketing External Marketing
Source: Bansal, Mendelson, and Sharma (2001), “The impact of internal marketing on external marketing outcomes,” Journal of Quality Management, 6, 61-76.
©Sudhir Kale, 2004
Internal MarketingKnowing internal customerCreating common visionEmpowermentTrainingIncentives and retention mechanisms
BENEFITS OF INTERNAL MARKETINGBENEFITS OF INTERNAL MARKETING
Satisfied, motivated, well-trained workforce
Superiorcustomerservice
Reducedabsenteeism,less turnover
High customer satisfaction
Increased patron spend More repeat customers
Positiveword-of-mouth communication
New customers
Increased Profitability
©Sudhir Kale, 2004
EMPLOYEE-CUSTOMER RELATIONSHIPEMPLOYEE-CUSTOMER RELATIONSHIP
The way your employees feelis ultimately the wayyour customers are going to feel.
©Sudhir Kale, 2004
HIGH TURNOVER/POOR SERVICE?HIGH TURNOVER/POOR SERVICE?
• Think Value• Think Image• Think Skills• Think Training (attitudes, roles, and skills
development)• Think Empowerment• Think Relationships• Think Innovation• Think Satisfaction• Think Loss• Think Communication
©Sudhir Kale, 2004
INTERNAL MARKETING: HARD EVIDENCEINTERNAL MARKETING: HARD EVIDENCE
• Chick-fil-A found 78% of its restaurants with above-average customer satisfaction scores also reported above-average employee satisfaction.
• Operating divisions of waste management with highest customer satisfaction scores also ranked highest on employee satisfaction and were more profitable than divisions with lowest satisfaction scores.
• Taco Bell found that 20% of its stores with the lowest turnover had double the sales and 55% higher profits than 20% of stores with highest employee turnover.
©Sudhir Kale, 2004
CUSTOMER EVALUATION OF YOUR SERVICECUSTOMER EVALUATION OF YOUR SERVICE
PerceivedService
PerceivedService
Expected Service
CUSTOMER
COMPANY
CustomerGap
GAP 2
GAP 3
External Communications
to CustomersGAP 4Service Delivery
Customer-Driven Service Designs and Standards
Company Perceptions of Consumer Expectations
GAP 1
©Sudhir Kale, 2004
“CULTiVATE” PROGRAM
• Week long fact-finding, analysis and training program
• Two weeks of preparation• Focuses on Customer Understanding, Life-Time
Value Analysis, Training and Empowerment options of a casino.
• Costs approximately USD27K plus expenses.• Report containing strategies to yield 50 times ROI
for large casinos.
©Sudhir Kale, 2004
SUMMATION: KEYS TO SUPERIOR CUSTOMER-RELATING CAPABILITYSUMMATION: KEYS TO SUPERIOR CUSTOMER-RELATING CAPABILITY
• Target markets set the tone for customer strategy.• Targeting should be based on lifetime value.• Determine the experiential needs and desired
rewards across targeted segments.• Invest heavily in internal marketing, especially
training, to provide desired customer experience that is consistent across touch-points.
• Design the right campaign and deliver the right service experience to the right customer at the right time.
• Conduct on-going research to monitor satisfaction, patronage behaviors, and profitability of targeted segments.
©Sudhir Kale, 2004
…it will not suffice to have customers that are merely satisfied. Satisfied customers switch, for no good reason, just to try something else. Why not? Profit and growth come from customers that can boast about your product or service – the loyal customer. He requires no advertising or other persuasion and he brings a friend with him.”--W. Edwards Deming
©Sudhir Kale, 2004
WORDS TO LIVE BY…WORDS TO LIVE BY…
“If you’re not serving the customer, you’d better be serving someone who is.”
- Karl Albrecht and Ron Zemke (2001), Service America
©Sudhir Kale, 2004
Time for ...Time for ...
©Sudhir Kale, 2004
Sudhir Kale’s Gaming Publications
Refereed Journal Articles“The Mathematics and Marketing of Dead Chip Programs: Finding and Keeping the Edge,”
International Gambling Studies, 4, 1 (June) 2004, 33-45, with Robert Hannum.“CRM in Gaming: It’s No Crapshoot,” UNLV Gaming Research & Review Journal, 7 (2), 2003, 43-54.“Know When to Hold Them: Applying the Customer Lifetime Value Concept to Casino Table
Gaming,” International Gambling Studies, 3 (1), 2003, 89-101, with Lisa Watson.
Gaming Related Trade Publications“Learning from CRM Failure” Casino Journal, 16 (10), October 2003, 47, 63.“A Few Kind Words About Gam(bl)ers: Desires and Motivations,” Native American Casino, 3 (10),
October 2003, 36-37.“Bogie and Becall: Casinos and the CRM Craze,” Native American Casino, September 2003, 3 (9),
36-37.“CRM: The Dream Lives On…” Global Gaming Business, 15 (2), September 2003, 98-100.“What’s in a Name? Turning Up the Branding Iron,” Global Gaming Business, 2(12), June 15, 2003,
35.“Betting on Globalization,” Global Gaming Business, 1 (12), December 15, 2002, 16-18.“A Cluster of Satisfactions,” Native American Casino, December 2002, 38-39.“Deal Yourself a Good Hand,” Native American Casino, September 2002, 58-60.“Customer Relationship Marketing: Nine Service ‘Truths’ You Need to Make Your Own,” Global
Gaming Business, 1 (6), September 15, 2002, 60-64.“Winning with Effective E-Gaming Websites,” E-gaming Review, Vol. 1, September 2002, 46-47.
©Sudhir Kale, 2004
Gaming-Related Web Publications
“Doing Good By Customers,” article published on www.urbino.net, posted on 14 June, 2001.“Lifetime Value of a Casino Customer,” article published on www.urbino.net, posted on 25 July, 2001.“Communicating with Asian Customers: It’s a Question of Context,” article published on www.urbino.net, posted on September 15, 2001.“Communicating with Asian Customers: It’s a Matter of Context,” article published on www.igamingnews.com, posted on October 11, 2001 (above article reprinted at editor’s request).“The Casino Executive’s Clothes,” article published on www.urbino.net, posted on October 29, 2001.“Spirituality in Gaming? You Bet!” article published on www.urbino.net, posted on January 2, 2002.“Revisiting the Customer Lifetime Value Concept,” article published on www.urbino.net, posted on January 28, 2002.“Want Your Online Gaming Venture to Prosper? Put 'Trust' in it to Grow” article published on www.igamingnews.com,posted on March 5, 2002.“Internal Marketing: An Unbeatable Deal,” article published on www.egamingpro.com, posted on March 25, 2002.“Customer Service: Differentiation On the Supplementary Aspects,” article posted on www.urbino.net, posted on April 7, 2002.“On Creating and Supporting Effective E-Gaming Web Sites,” article published on www.igamingnews.com, posted on April 12, 2002.“Performance Index of Gaming Sites (PIGS)” article published on www.egamingpro.com, posted on April 12, 2002.“Terrible Customer Service? Oui Monsieur,” article published on www.egamingpro.com, posted on July 11, 2002.“Deal Yourself a Good Hand,” article published on www.urbino.net, posted August 2, 2002.“4P Framework for Casino Success,” article published on www.urbino.net, posted on 1 January, 2003.“Gambling Industry’s Hard Bargain with Academics,” article published on www.urbino.net, posted on May 25, 2003.“A Few Kind Words About Gam(bl)ers,” article published on www.egamingpro.com, posted on July 2, 2003.
