Presentation about the latest developments in casino marketing.

2. Casino Marketing
Excerpts from Chapter Three

3. Predictive Analytics for the Gaming Industry
“However beautiful the strategy, you should occasionally
look at the results.”
~Winston Churchill

4. Casino Marketing
Often referred to as the heartbeat of a casino's operations,
marketing affects almost every single function at a modern casino
property yet it is often taken for granted. Casino marketing
involves not only providing the right offer to the right patron at the
right time, but also includes retaining existing patrons, as well as
acquiring new ones. To perform these marketing tasks, the casino
marketer needs to not only fully understand the patrons in its
database but also figure out how to get new patrons onto its
property and into its databases as well.

5. To both allocate resources properly and attract and retain the most
profitable customer segments, the casino marketing department needs to
understand which segments “pay the bills.” Some of the questions they
must ask are:
-- Who are the casino's current customers?
-- Which customer segments contribute the most or the least to the
property’s revenue?
-- Does it make more sense to design promotions that attract player
segments with low theoretical win levels but high frequency of visitation, or
should the casino allocate promotional dollars to player segments with
higher theoretical win rates but less frequent visitations?
-- Where do the casino’s customers live?
-- What is the overall contribution of each zip code, country or province?

6. Market Segmentation
In their article How a professional casino consultant can
help ‘optimize’ your casino’s marketing, Steve Karoul and
Dean Macomber advise casino marketers to think of their
potential market as a series of interconnecting circles of
differing categories within which there is an endless
variety of options. They state that the segments can
include, but are not limited to, the following:
• Geographic
• Demographic
• Psychological
• Cultural
• Age
• Activities

7. When broken down this way, one person would obviously
be included in many different categories and each
segment could be broken down into smaller segments.
For geography, there would be three segments; Nearby or
“convenience” gaming customers, to whom distance
matters a lot; Middle distances or “excursion” gaming
customers, to whom distance is somewhat of an issue;
and Large distances or the “destination” gaming
customers, to whom distance matters little (Karoul and
Macomber).

8. When creating their marketing strategies, casino
operators must think in terms of the Market Cycle of
Demand Creation, which contains the following three
phases:
• Awareness,
• Trial offer, and
• Repeated visitation.

9. For starters, consumers must know that the product – the
casino – exists. Once patrons arrive, they must be turned
into loyal customers who will repeatedly return so
attempts must be made to have then enroll into a player
club. Once enrolled, the casino marketers can track the
patron's spend very accurately. Armed with this important
information, a casino marketer can determine the patron's
likes and dislikes and then target market to them
specifically. At this point, casino marketers should develop
a range of programs and offers that will generate
repeated visitations (Karoul and Macomber).

10. Marketing campaigns are where the rubber meets
the road. Whether the campaigns are monthly direct
mails campaigns, birthday or other promotions, a
marketing automation tool can provide a user-
friendly mechanism for assigning the data-specific
requirements to identify customer segments.

11. Once the marketing campaign criteria are established, all
future campaigns can be assured of having the same
criteria. Scheduling campaigns will allow the marketing
team to set-up recurring campaigns weeks in advance
versus setting up individual campaigns one at a time. The
goal is to automate routine processes into regularly
scheduled jobs. The main advantage of an automation
tool is that every campaign, communication and response
can be attributed to a specific event.

12. Customer-focused marketing campaigns
By taking advantage of the more powerful, statistically based
segmentation methods, customers can be segmented not only by
dollar value, but also on all known information, which can include
behavioral information gleaned from a customer’s resort activities,
as well as his or her simple patron demographic information. This
more detailed segmentation allows for more targeted and
customer-focused marketing campaigns.

13. Predictive Analytics can help to:
– Identify the casino's most valuable patrons.
– Predict a patron's future worth and/or his or her future behavior.
– Plan the timing and placement of advertising campaigns.
– Create personalized advertisements.
– Define which market segments are growing most rapidly.
– Segment patrons into groups based on their behaviors and then
create marketing campaigns to exploit those behaviors.

14. Predictive Analytics can help to:
– Determine a patron's level of gambling skill.
– Identify patrons who come together.
– Identify the likelihood a patron will respond to an offer.
– Identify the offer(s) to which patrons are most likely to respond
to.
– Predict when a patron is likely to return.

15. Predictive Analytics
In their article “Knowing What to Sell, When, and to Whom,”
authors V. Kumar, R. Venkatesan, and W. Reinartz (2006)
showed how, by simply understanding and tweaking behavioral
patterns, they could increase the hit rate for offers and
promotions to consumers, which then had an immediate – and
substantial – impact on revenues.
By applying statistical models based on the work of Nobel prize-
winning economist Daniel McFadden, researchers accurately
predicted not only a specific person’s purchasing habits, but also
the specific time of the purchase to an accuracy of 80%
(Venkatesan and Reinartz, 2006).

16. Predictive Analytics
The potential to market to an individual when he or she is
primed to accept the advertising is advantageous for both
parties involved; marketers don’t waste time advertising to
consumers when they aren’t primed to accept the
advertisements, but do market to consumers when and
where they might want to use the advertisements.

17. Manipulating Customer Behavior
Successful marketing is about reaching a consumer with an
interesting offer when he or she is primed to accept it.
Knowing what might interest a patron is half the battle to making
a sale and this is where customer intelligence and predictive
analytics comes in.
Customer analytics has evolved from simply reporting customer
behavior to segmenting customers based on their profitability to
predicting that profitability, to improving those predictions, to
actually manipulating customer behavior with target-specific
promotional offers and marketing campaigns.

18. Campaign Effectiveness: Capturing Response Data
To truly understand the success or failure of a marketing
campaign, casino and hotel operators must have an
effective response tracking system. Costs and revenues
can be combined with promotional contact and response
information, which will provide a complete picture of
response rates and ROI. Because this information is
stored at the individual customer level, various levels of
modeling, segmentation and analysis can be performed
for strategic targeting of a campaign.

19. Predictive Analytics – Regression Analysis:
Regression analysis is the process of predicting the continuous
dependent variable from a number of independent variables. It
attempts to find a function which models the data with the least
error. Regression analysis can be used on data which is either
continuous or dichotomous, but cannot be used to determine a
causal relationship. Regression analysis focuses on establishing
a mathematical equation as a model to represent the interactions
between the different variables under consideration. Regression
models are particularly effective to find patron worth because the
model can be used to score historical data to predict an unknown
outcome.

20. Example of a campaign illustrating desired capabilities

21. Predictive Analytics in the Casino
and Gaming Industry
Other chapters include:
• Customer Relationship Management
• Predictive Analytics
• Mobile-izing your Marketing
• Social Media
• Table Games Revenue Management
• The Asian Gambler
• Compliance
• A Winning Solution
Book is available at
Amazon.com

22. Predictive Analytics in the Casino
and Gaming Industry
References:
Karoul, Steve & Macomber, Dean. How a Professional Casino Consultant Can Help
‘Optimize’ Your Casino Marketing Plan. http://euroasiacasino.com.
Kumar, V., Raj Venkatesan and Werner Reinartz (2006). “Knowing what to sell when
and to whom,” Harvard Business Review, 84 (3), 131.