The Evolution of Customer Analytics Marketing in the Gaming Industry Continued
The Evolution of Customer Analytics Marketing in the Gaming Industry Continued
Casino’s in this stage have already successfully created customer segments based on actual customer profitability. Casinos in stage three are adding the power of prediction to their marketing strategies, i.e., forecasting future customer profitability based on data from their CMS systems, player card, and other data like gender, age, and distance from the casino. A forecasting model predicts future/potential profitability for each and every casino customer as well as the likelihood to attrite. These predictions are then used to segment customers into as many segments as is deemed practical for marketing purposes. For example:
Potential Diamond
Potential Platinum
Potential Gold
Potential Silver
Potential Bronze
Specific promotions and comps are aligned to keep high value customers loyal, and to upwardly migrate low value customers that possess high potential.
Stage 4: Improve Customer Forecasts and Segmentations Based on a 360o View of the Customer
Cutting-edge casinos like Harrah’s are better able to assess current customer and predicted customer value by adding new and important data. A 360o view of the customer can be created by integrating data from Lodging, Food and Beverage, Meetings, the Call Center, the web and customer surveys. Once the 360o view is developed, new analytical techniques can be used to increase customer insight and deploy even more sophisticated segmentation strategies. These analytical techniques include traditional data mining using additional data, text mining (of unstructured data from call centers and the web), and Web Mining of customer website behavior.
The improvement in forecast accuracy from additional data can be very significant. Web data can deliver 20% better forecasts; Attitudinal data can increase forecast accuracy by 30%; and, unstructuered text data can increase forecast accuracy by as much as 40%.
Stage 5: Optimize and Operationalize Campaigns, and Offers Across Channels
Many casinos today are achieving increased marketing productivity by utilizing campaign management applications to automate labor intensive/manual customer segmentation and marketing activities. The most advanced casinos create, optimize and operationalize their marketing campaigns over time and channels based on:
Current and predicted customer value and behavior
Contact optimization based on business rules, and in some cases mathematical optimization algorithms
Real-time offers based on awareness of customer location and activity in the casino property
The goal here is to use all data that is available to develop models and an optimal contact strategy that meets the needs of the customers and the casino – a win-win situation.
Marketing strategies associated with current and predicted value were already covered in earlier stages, above. We will now turn our attention to optimization and real-time offer management.
Optimization
Optimization is a technology for creating an optimal contact strategy across campaigns over a given timeframe. It is based on a number of factors:
Customer communication channel preferences
Stated customer interests based on survey or web-form data
Value of an offer/comp to the casino
Channel capacity
The probability of customer response to specific offers/comps
Customer contact frequency constraints (to minimize contact fatigue)
Contact optimization approaches can be based on rules or by mathematically driven optimization algorithms. While both approaches are valid, it is difficult to understand and explain how optimization algorithms actually come up with their contact strategies. Business rules are easier to understand and explain, and are often a good first step in getting acquainted with contact optimization.
Here is an example of business rules used for developing an optimal contact strategy, “Over the next quarter’s planned campaigns, let’s only communicate with customers that have a 70% or greater likelihood to respond to various offers, while taking into account:
The maximum number of communications per customer is four.
Only extend one offer to each customer over this time period – the one with the greatest return for the casino.
Direct mail channel capacity is1MM pieces.
Without optimization, the casino may send out 2.5MM offers (increasing costs and extending the campaign schedule due to capacity constraints), while communicating with some customers ten times with conflicting, lesser value offers. This is not good for customer loyalty or casino/property profitability.
Real-time Offers Based on Awareness of Customer Activity in the Casino
Some leading casinos realize that appropriate offers in real-time can keep customers in their hotel property. Imagine making a real-time 50% off spa-treatment offer to a woman that just lost $300 at Baccarat. It makes her feel better and increases her property spend and loyalty.
Harrah’s uses its Total Rewards Program to track customer behavior in real-time. A guest celebrating her birthday might insert her loyalty card in a slot machine and be surprised by a promotions manager bearing a birthday card and a cookie .
The key is to know where the customers are in the property (based on use of the customers loyalty card), and tying that to real-time offers that are developed dynamically or are pre-determined via the utilization of campaign management applications. Offer integration may be data-based for pre-determined offers, or real-time via web services for dynamic offer creation. Increased profitability, customer loyalty and share-of-wallet will result by getting the right offer to the right customer at the right time.
In summary, optimization is a process where customer preferences, customer value, and casino/corporate goals and constraints are managed to create an optimal contact strategy that increases the return on marketing investment. More specifically, optimization requires the identification of a goal (e.g., maximizing profits), as well as the identification of constraints (e.g., marketing budget, channel capacity, maximum number of contacts per individual per month, etc). Optimal contact strategies are then typically based on the development of and prioritization of business rules, or via linear or non-linear optimization algorithms.
Summary
The use of additional customer data, data mining, sophisticated segmentation schemes and contact optimization can lead to increased customer satisfaction, loyalty and spend in the casino. These benefits can even extend beyond the casino. Marketing strategies based on a 360o view of the customer can benefit the property (including Lodging, Spa, Meetings, etc.) as well as the enterprise in the case of a multi-property entity.
Casino’s not utilizing these strategies will fall behind and realize less and less share of wallet.
The Evolution of Customer Analytics Marketing in the Gaming Industry Continued - To learn more about this author, visit Jim Stafford's Website.
Like this article? Share it with your friends
Stage 3: Predict Customer Value and Behavior to Align Offers -
Casino’s in this stage have already successfully created customer segments based on actual customer profitability. Casinos in stage three are adding the power of prediction to their marketing strategies, i.e., forecasting future customer profitability based on data from their CMS systems, player card, and other data like gender, age, and distance from the casino. A forecasting model predicts future/potential profitability for each and every casino customer as well as the likelihood to attrite. These predictions are then used to segment customers into as many segments as is deemed practical for marketing purposes. For example:
Potential Diamond
Potential Platinum
Potential Gold
Potential Silver
Potential Bronze
Specific promotions and comps are aligned to keep high value customers loyal, and to upwardly migrate low value customers that possess high potential.
Stage 4: Improve Customer Forecasts and Segmentations Based on a 360o View of the Customer
Cutting-edge casinos like Harrah’s are better able to assess current customer and predicted customer value by adding new and important data. A 360o view of the customer can be created by integrating data from Lodging, Food and Beverage, Meetings, the Call Center, the web and customer surveys. Once the 360o view is developed, new analytical techniques can be used to increase customer insight and deploy even more sophisticated segmentation strategies. These analytical techniques include traditional data mining using additional data, text mining (of unstructured data from call centers and the web), and Web Mining of customer website behavior.
The improvement in forecast accuracy from additional data can be very significant. Web data can deliver 20% better forecasts; Attitudinal data can increase forecast accuracy by 30%; and, unstructuered text data can increase forecast accuracy by as much as 40%.
Stage 5: Optimize and Operationalize Campaigns, and Offers Across Channels
Many casinos today are achieving increased marketing productivity by utilizing campaign management applications to automate labor intensive/manual customer segmentation and marketing activities. The most advanced casinos create, optimize and operationalize their marketing campaigns over time and channels based on:
Current and predicted customer value and behavior
Contact optimization based on business rules, and in some cases mathematical optimization algorithms
Real-time offers based on awareness of customer location and activity in the casino property
The goal here is to use all data that is available to develop models and an optimal contact strategy that meets the needs of the customers and the casino – a win-win situation.
Marketing strategies associated with current and predicted value were already covered in earlier stages, above. We will now turn our attention to optimization and real-time offer management.
Optimization
Optimization is a technology for creating an optimal contact strategy across campaigns over a given timeframe. It is based on a number of factors:
Customer communication channel preferences
Stated customer interests based on survey or web-form data
Value of an offer/comp to the casino
Channel capacity
The probability of customer response to specific offers/comps
Customer contact frequency constraints (to minimize contact fatigue)
Contact optimization approaches can be based on rules or by mathematically driven optimization algorithms. While both approaches are valid, it is difficult to understand and explain how optimization algorithms actually come up with their contact strategies. Business rules are easier to understand and explain, and are often a good first step in getting acquainted with contact optimization.
Here is an example of business rules used for developing an optimal contact strategy, “Over the next quarter’s planned campaigns, let’s only communicate with customers that have a 70% or greater likelihood to respond to various offers, while taking into account:
The maximum number of communications per customer is four.
Only extend one offer to each customer over this time period – the one with the greatest return for the casino.
Direct mail channel capacity is1MM pieces.
Without optimization, the casino may send out 2.5MM offers (increasing costs and extending the campaign schedule due to capacity constraints), while communicating with some customers ten times with conflicting, lesser value offers. This is not good for customer loyalty or casino/property profitability.
Real-time Offers Based on Awareness of Customer Activity in the Casino
Some leading casinos realize that appropriate offers in real-time can keep customers in their hotel property. Imagine making a real-time 50% off spa-treatment offer to a woman that just lost $300 at Baccarat. It makes her feel better and increases her property spend and loyalty.
Harrah’s uses its Total Rewards Program to track customer behavior in real-time. A guest celebrating her birthday might insert her loyalty card in a slot machine and be surprised by a promotions manager bearing a birthday card and a cookie .
The key is to know where the customers are in the property (based on use of the customers loyalty card), and tying that to real-time offers that are developed dynamically or are pre-determined via the utilization of campaign management applications. Offer integration may be data-based for pre-determined offers, or real-time via web services for dynamic offer creation. Increased profitability, customer loyalty and share-of-wallet will result by getting the right offer to the right customer at the right time.
In summary, optimization is a process where customer preferences, customer value, and casino/corporate goals and constraints are managed to create an optimal contact strategy that increases the return on marketing investment. More specifically, optimization requires the identification of a goal (e.g., maximizing profits), as well as the identification of constraints (e.g., marketing budget, channel capacity, maximum number of contacts per individual per month, etc). Optimal contact strategies are then typically based on the development of and prioritization of business rules, or via linear or non-linear optimization algorithms.
Summary
The use of additional customer data, data mining, sophisticated segmentation schemes and contact optimization can lead to increased customer satisfaction, loyalty and spend in the casino. These benefits can even extend beyond the casino. Marketing strategies based on a 360o view of the customer can benefit the property (including Lodging, Spa, Meetings, etc.) as well as the enterprise in the case of a multi-property entity.
Casino’s not utilizing these strategies will fall behind and realize less and less share of wallet.
The Evolution of Customer Analytics Marketing in the Gaming Industry Continued - To learn more about this author, visit Jim Stafford's Website.
Like this article? Share it with your friends
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David AchesonDavid Acheson is the founder of DCJA Consultancy. DCJA Consultancy is a management consultancy business specialising in B2B sales consultancy. They offer bespoke and packaged sales consultancy including Sales Optimisation Review, Interim Sales Management, Sales & Marketing Review, 1:1 Sales & Management Staff Analysis, Management Training, Solution Sales Training, Creation of New Pay Plan, KPI's, run Customer Feedback Campaigns, assist with Recruitment, Coaching, Appraisals and set up Strategic Marketing Campaigns. David spent his early career in accountancy and then moved into sales in 1982, working in Office Equipment, IT, Advertising, Training, Outsourcing and Consultancy. He has held many Senior Positions in SMBs and Global Organisations including Head of Sales Operations & Head of Business Development. His knowledge, skills and great experience of the Sales Industry has led to David making keynote speeches and running educational sessions to key businesses through organisations including The Chamber of Commerce and Business Link. - Visit David Acheson's Website |
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Dave KurlanDave Kurlan is the founder and CEO of Objective Management Group, Inc., the industry leader in sales assessments and sales force evaluations, and the CEO of David Kurlan & Associates, Inc., a consulting firm specializing in sales force development. Dave has been a top rated speaker at Inc. Magazine's Conference on Growing the Company, the Sales & Marketing Management Conference and the Gazelles Sales & Marketing Summit. He has been featured on radio and TV, including World Business Review with General Norman Schwarzkopf, in Inc. Magazine, Selling Power Magazine, Sales & Marketing Management Magazine and Incentive Magazine. He is the author of Mindless Selling and Baseline Selling – How to Become a Sales Superstar by Using What You Already Know about the Game of Baseball. He created and wrote STAR, a proprietary recruiting process for hiring great salespeople, and he writes Understanding the Sales Force, a popular business Blog and is a contributing author to The Death of 20th Century Selling and 101 Great Ways to Improve Your Life, Volume 2. - Visit Dave Kurlan's Website |
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Linda RichardsonLinda Richardson is the Founder and Executive Chairwoman of Richardson, a global sales training and performance improvement company. As a recognized leader in the industry, she has won the coveted Stevie Award for Lifetime Achievement in Sales Excellence and she was identified by Training Industry, Inc. as one of the “Top 20 Most Influential Training Professionals.” Ms. Richardson is credited with the movement to Consultative Selling and is the author of ten books on selling and sales management, including Sales Coaching — Making the Great Leap from Sales Manager to Sales Coach, and Stop Telling, Start Selling. She teaches sales and management at the Wharton Graduate School of the University of Pennsylvania and the Wharton Executive Development Center. Linda is a frequent speaker at industry and client conferences, has been published extensively in industry and training journals, and has been featured in numerous publications, including The Wall Street Journal, Forbes, Nation’s Business, Selling Power, Success, and The Conference Board Magazine. Learn more about Richardson's sales training and performance improvement solutions at http://www.richardson.com web - Visit Linda Richardson's Website |
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John PowerJohn Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co - Visit John Power's Website |
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Jeff FosterWebBizIdeas.com is a Minneapolis website design company founded to help people start an internet business by providing them with website, business, and internet resources that help foster the growth of successful online businesses and develop innovative Internet business ideas. We specialize in internet consulting & internet marketing. - Visit Jeff Foster's Website |
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Stephanie RobeyStephanie Robey is President and CoFounder of Pivot Positive, LLC - an Internet marketing business focused on helping people start work at home ventures. Previously, she was employed at The Search Agency with over 20 years experience in graphic design and 10 years experience in online marketing. She was responsible for launching the Conversion Path Optimization (CPO) unit where she and her team have conducted hundreds of optimization tests for online companies across multiple verticals. She is a successful entrepreneur having started and sold 2 companies and remains on the board of directors of the third, PhotoSpin.com Stephanie began her career in the direct marketing realm creating and producing direct mail for many of the major cable television companies and directly attributes her understanding of Internet marketing to those early offline experiences. Stephanie is a graduate of San Diego State University with a BFA in Graphic Arts and also holds an Executive MBA from the Graziadio School of Business and Management at Pepperdine University. Read Steph's Blog Meet Steph and Dave Sign up for our Free 7-Day BootCamp: Self Employed & Rich - Visit Stephanie Robey's Website |
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Joe DagerJoe Dager is President of Business901, a progressive coaching company providing no-nonsense direction in areas such as Lean Six Sigma Marketing and organized referral marketing. What others say: In the past 20 years, Joe and I have collaborated on many difficult issues. Joe’s ability to combine his expertise with “out of the box” thinking is unsurpassed. He has always delivered quickly, cost effectively and with ingenuity. A brilliant mind that is always a pleasure to work with.” - James R. If you want to learn more about Business901, start a conversation with us. We can be found @ Web/Blog: Business901.com Web/Blog: FundingYourNonprofit.com LinkedIn Profile Follow me on Twitter - Visit Joe Dager's Website |
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Jay Kubassek(Jay's Full Bio: EvanCarmichael.com/jaykubassek) In five years, Canadian-born entrepreneur Jay Kubassek went from selling mufflers at a Midas franchise to revolutionizing Internet marketing with the 2004 launch of CarbonCopyPRO, a online marketing education company, now worth over $20 million with customers in over 160 countries.
As an independent film producer, his upstart film fund Aliquot Films is currently producing a films with Spike Lee and Abel Fererra (starring Ethan Hawke and Dennis Hopper.)
Jay's entrepreneurial spirit is irrepressible. He’s the owner of five companies, a professional speaker and trainer, international real estate developer/investor, extreme sport enthusiast and emerging philanthropist. Jay resides in NYC with his wife Jamie, son Milo and dog Cooper. Visit Jay's official website: www.JayKubassek.com - Visit Jay Kubassek's Website |
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