Casino Gaming Database Marketing Strategies
August 19, 2011 by Stics·
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No Change in Database Marketing Strategies
Another fact we learned from our casino marketing survey was that most casino properties stuck with their existing db marketing strategies, even with the downturn. Basically, we found that:
- Despite the status of the business, almost 40% (39.1%) of properties are not changing their db marketing strategies.
- About a fourth of the industry is simply adjusting their marketing budget. More properties are increasing spending (17.4%) than decreasing (8.7%) marketing spending as a response to the situation.
- Another quarter (26.1%) are mailing different individuals with the same budget.
- Another 8% of properties are dealing with industry situation by buying new machines.
Strategies for db Marketing
The survey revealed that the gaming industry moved toward more tiering.
- 27% used Three-tiered database
- 42% mail 4- 12 tiers
- 12% mail at least 25 tiers
- 19% did not use or not known
Opportunity to improve mailing sophistication
Stics believes there is a lot of opportunity to database market more effectively. Based on the survey results, campaign effectiveness can be improved by:
- Trying new things (because 40% were mailing same)
- More complexity (because 69% were mailing fewer than 12 tiers)
- More Sophistication (only 23% using predictive analytics)
At a high level we know that loyal customers do come back, they just don’t spend as much. The problem is knowing which customer are likely to have more money to spend and how to bring back less frequent customers. Stics can help with that. Stics can unlock the power of your current database to maximize profitability and marketing effectiveness. For more information, call us today. We are here to help.
Casino Gaming Pain Points
July 1, 2011 by admin·
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Reduced Revenues from Same Number of Players the No. 1 Pain Point
Casino businesses have diverse pain points, so we narrowed them down to find out which is the biggest source of pain last year. According to our survey, these were the pain points of businesses last year:
- Increase spend of players already coming (28%)
- Get new customers to make up for the deficit in current play (24%)
- Get players to play more since spending less (20%)
- Add other form of spending to mix (12%)—stays, events, food, etc.
- 4% changing reinvestment
With 57% of our respondents in their positions for less than 2 years, companies seem to be making investments in marketing talents to improve results. However, it appears that getting the same number of players to spend more is the top source of pain by their marketing people.
Stics, as your predictive analytics partner, can help you find your pain points and determine effective marketing solutions that can achieve 10x ROI fast.
If you would like to learn more, call us today. We are here to help.
Casino Gaming Business Performance
June 10, 2011 by Stics·
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More Up’s than Downs for Casino Gaming
We wanted to know how much the overall business performance in the casino gaming industry has changed in the previous year and our survey reveals that there actually has been more “up’s” than “down’s” as compared to the previous year.
More companies have improved in their performance than those who experienced decline; even so, most businesses yielded flat in their performance. This is vis-à-vis last year; so bottom hit for some.
- Things are better in places than expected (30.8% of businesses are up)
- More are up than down (30.8 up and 23.1 down)
- No improvement for bulk (61.6%) though (38.5% flat plus 23.1% down)
Stics offers predictive analytics to help you derive insights from your current data, make better informed decisions, and ultimately, improve your business performance. Call us if you would like to learn more. We are here to help.
Casinos & Hospitality Industry Stays Focused on Revenue
May 27, 2011 by Stics·
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Revenue the Primary Measure of Casino Success
When we asked what are the key metrics used to measure marketing ROI, we found that revenue remained to be the main driver of business assessment in the industry. We also noted:
- About one third of participants use profit
- Most (65.4%) examine gross revenue
- Less than half (46.2%) examine EBITDA suggesting profitability maybe difficult to monitor
- And 34% of the time some additional other variable was also considered
If you are looking to increase revenue and profit at your property, contact Stics. We have solutions that generate millions of dollars each month. Call us if you would like to learn more. We are here to help.
Report Marks Indian Gaming Revenue Decline
March 25, 2011 by Stics·
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Indian Gaming Still the Recessionary Winner
Indian gaming began its widespread popularity in the States during the late 1980’s and its growth rapidly escalated. Despite the trend, even Indian gaming could not completely escape the impact of the recession, reporting an overall revenue decline of 1% in 2009, as reported in Casino City Press.
Casino City’s latest Indian Gaming Industry Report reveals national Indian gaming revenue declined 1% to $26.4 billion, from $26.7 billion the previous year. This marks it the first year of decline in Indian gaming history. According to the report, the overall slowdown was due to the economy and other factors including, public policies restricting the supply of gaming.
The performance of Indian gaming varied widely across states, California and Oklahoma were the top two states accounting for 38% of the total national Indian gaming revenue.
The overall decline in Indian gaming was much less serious than the commercial casino of the nationwide gaming industry.
Why Did the Indian Gaming Community Do So Well in the Economic Downturn?
Stics believes there are two major factors that contributed to the relative resilience of Indian Casinos over the past few years― and they both relate to location.
High Percentage of Local Gamers
If a property has a higher percentage of local gamers, its resilience in an economic downturn will be greater. Generally speaking:
- In a recession, people travel less.
- If gambling is a preferred form of entertainment, the destination gamble will reduce expenses by gambling closer to home.
- The percentage of gross gaming revenue from local gamers is higher for Native American properties than destination cities.
Less Competition
Native American properties often, but not uniformly, enjoy less competition. This is due to:
- Unique or remote locations
- A scarcity of nearby gaming alternatives
This encourages customer visit stability, as gamblers come back to nearby casinos more consistently over time. Because of this local access, gambling can become a recurring part of the local entertainment budget.
Casino Marketing Trends
September 3, 2010 by Stics·
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Casino Marketing Survey
Earlier this year, Stics conducted a preliminary research project to gauge the state of the U.S. gaming industry, from a marketing perspective. We contacted both senior level business executives as well as high to mid-level marketing department professionals to learn more about their challenges and perceptions.
Listed below is a high level summary of some of the more interesting observations.
Top 5 Casino Marketing Observations
- Respondents felt their casino marketing efforts were performing well – despite the down economy.
- Direct mail volume of was up by 10 – 20%.
- Marketers put more value on the website and online programs while business leaders didn’t see value in the websites as compared to direct mail and analysis.
- Business leaders are “likely” to “very likely” to invest in new marketing technologies but marketing teams were “very unlikely” to “unlikely” to invest.
- Marketers were concerned about expenses.
While it is obvious that the economy has taken its toll on casino marketers and the gaming industry as a whole, Stics believes that today’s casino marketers are being asked to do more with less. As a result, they are executing on a large number of campaigns to a wider audience. This presents them with the new challenge of how to profitably reach this wider audience.
Stics is currently conducting a more comprehensive study as a follow up to our preliminary findings. We will keep you posted on other interesting facts when they become available.
Stics helps casino marketers reach a wider, more profitable audience through the efficient and effective use of predictive modeling. If you have any questions about predictive analytics for casino marketing, please give us a call. We look forward to speaking with you.
Probabilities and Statistics Pay-Off for Marketers
August 20, 2010 by Stics·
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Conditioning Probabilities
When observing our customers, sometimes evidence can look pretty persuasive and sometimes it can be down-right compelling. And yet, without proper attention to underlying statistical properties in the customer data, you might form an entirely false impression of your customers. It is not uncommon for marketers to ask this question, at least once in their career.
“How did I make such a wrong conclusion from such compelling evidence”?
The answer lies in its numerical underpinnings, what statisticians call “conditioning”. Conditioning can cause you to reach the wrong conclusions and send lots of marketing dollars down the rabbit hole and take you to the Mad Hatters Tea Party.
The unhappy results of conditional probabilities exist in all facets of animal and human behavior. These are typically complex scenarios of layered assumptions, so I am using this simple example, of one type of casino player, to demonstrate how the application of incorrect assumptions can lead to lost revenue and profitability.
Casino Gambler Example
Let’s assume one percent of the casino gamers who played at your property were cheaters. That percentage might be high (Cheaters = 1%), but this is an example after all. Let’s also assume that when a player is a cheater, he or she will decline to fill out a loyalty Rewards Club card application about ninety nine percent of the time. (If cheater, 99% decline application.)
Now comes the interesting part. Let’s say that you see a suspicious player, approach him or her, ask the player to fill out a rewards application, and the player declines. What are the chances that that player is a cheater?
Intuition vs. Reality
Intuition would suggest a high likelihood of cheating. But the reality is different. There is only about a one in thirty-three percent chance that this individual casino player is a cheater. So consider the statistical probabilities before you decide that the player is not worthy of a revenue generating comp or a coupon.
Here’s a table that describes the situation exactly. You have total players showing up in green. In red are the 1% or 100 are cheaters. 99 of those 100 cheaters were not willing to fill out an application, so your test was very good.
Wrong Assumptions Equal Lost Profit
So here is the big question. If someone refuses to fill out an application (the red boxed group), should you refuse to serve them or market to them? The answer is No for the following reasons.
- First, there is only roughly a 1 in 33 chance (more precisely 99 of 3,399) that the player is a cheater.
- Second, there is a 3,330 out of 3,399 chance that they are a good player who will be profitable.
- And finally, these 3,300 players are likely to be even more profitable than reward applicants.Even when making generalizations about customers, it is essential to understand the effect of your assumptions on your conclusions. Especially when formulating policy, it really pays to know your probabilities and statistics.
If you found this interesting or want to learn more about the power of statistics for marketing, feel free to contact Stics. We are happy to help.
How to Tell What Your Customers Want
August 1, 2010 by Stics·
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Past Behaviors: Misleading Facts
When we make guesses about the future, we usually go off past behaviors. But people change their minds frequently. So even if you know what your customers bought in the past, you cannot necessarily predict what they will buy in the future ― from their past behavior alone.
To illustrate that point, let’s look at Bob, Carol, Ted and Alice. We want to know if we should be marketing SUV’s to these people. From our customer records, we know they bought an SUV in the past.
As you can see from the chart, the traditional SQL (Structured Query Language) a
nswer correlates their past behavior with a recommendation to market to these people. But this approach falls short compared to the deeper statistical answer, because it only evaluates a limited set of the available data.
- For Bob, both the SQL and statistical answers are in agreement, telling us that he is worth marketing to because he is an SUV buyer.
- For Carol, the two answers lead to opposite conclusions. Perhaps she no longer needs one because her kids are grown. Maybe it’s something else that changed?
- Both Ted and Alice have some chance of buying an SUV having never done so previously.
- But Alice has a much higher probability of buying one. Perhaps she is starting a family or taken up a new sport that an SUV would be good for. Without statistical analysis, we would not know that Alice is worth marketing to.
Predicting the Future
The better way to make predictions about future behavior is to use a statistical model. A statistical model can take many complex inputs and produce outputs, like the probability of someone buying an SUV in the future.
The important difference here is that statistical models can respond to all the details within your data. This is superior compared to using generalities or segments of your data, like the “previously purchased” example shown above. By using statistical models rather than a traditional SQL approach, your will gain a better view of your customers and better refine your marketing efforts with increased accuracy and profitability.
This is one of the reasons why Stics statistical models improve marketing performance above other methods. Stics can provide customized statistical insight about your customers – and use less time than traditional segmentation models take to make. Plus, Stics has years of experience and the technological tools to quickly and reliably give you the information you need.
How Averages Can Be Dangerous
We use averages in our business life all the time, and they are usually pretty straightforward. However, when it comes to making business decisions involving customer data, averages can be misleading.
Let’s say that we had a sample of 100 gamblers from your customer re wards system. From your current database analysis tool you can learn that their average income is $55K per year. So from that information, you might assume your typical customer has an income of $55K and act on that assumption, by building a marketing campaign targeting customers with an income of $55K. When you imagine averages, you probably think about a curve like this:
The problem is there are other kinds of curves with the same average as the one above, but they have wildly different distributions and implications for your marketing campaign. For example this chart shows a flat or what statisticians call a uniform distribution which would be bad news for your marketing campaign.
If you are an optimist about your gambling population, you might think you have a narrowly grouped base around $55K like this chart.
And if you are unlucky, some day you might experience this unfortunate distribution and none of them have an income of $55K as seen in this troth shaped bi-modal chart.
The important thing to note here is that all these graphs have the same averages, so if you were relying on averages alone to make decisions for your business, your success would be at risk. With misleading data, you may be spending thousands of dollars marketing to unprofitable customers and overlooking potentially valuable ones.
Distributions Matter
Averages don’t matter as much as the distribution around the averages, when it comes to finding ideal customers. Distributions give you a fuller picture of where your customers are and just as importantly― where they are not.
The way to the right people is to use more information, specifically, to use all of the distribution and not just the average. Predictive analytics is the clear winner for making more profitable decisions, because it uses all of the information in the distribution. Predictive analytics is a more complex way of looking at potential consumers, taking into account their past behavior and predicting whether or not they would be receptive to the product or service you have to offer.
To use predictive analytics, you could start studying distributions, send your staff to statistics classes or start benefiting immediately from Stics. The professionals at Stics have made it easy for people who aren’t knowledgeable about statistics to get the important information they need for their company. Stics has predictive models that can give you valuable information about your customer information― which will lead to more profitable marketing campaigns.
Why Data Segmentation Is Not Enough
People Are More Complicated Than Their Data Segmentation Parameters
When evaluating customer wants and needs, there are many ways of looking at data from the sublime to ridiculous. Commonly accepted ways of looking at customer data include generating a “gut feel” from experience, sampling at random,looking at exceptions, reviewing periodic totals, and SQL selection. SQL, the most common tool used by database marketers, stands for Structured Query Language, but what it boils down to is averages or data segmentation. It gives you general information about groups of people, often by age or income.
Let’s say, for instance, that you want to find people that fit a certain category, such as empty-nesters. To use data segmentation to find these people, you might search for people in the 50 – 60 year age range and within a certain income bracket. SQL would look at your data to find the people who fit both of these parameters.
The problem with SQL is that you’re potentially overlooking the right people. In this example, your data segment would be missing all of the empty nesters who are under 50 as well as those who fall outside your chosen income range. SQL is just a fancy way to put people into buckets. The problem is, not everyone you seek is in the obvious bucket.
People are more complicated than just their income or age, but when analyzing populations, you can become trapped by these segmentation tools and rules.
Where Your Customers Really Are
The truth is that you’re not really looking for empty-nesters within certain parameters (shown in brown on the chart) or even empty-nesters in general. You are looking for people who will be receptive to what you have to offer (shown in yellow on the chart).
To find these potential customers, you need to stop relying on buckets and start looking at the bigger picture. And to do that, you need statistics. Statistics can help you find the best people that correspond to your potential customer base.
Predictive Analytics: Better than Buckets
The most effective form of selection would be to use the most information and use it optimally. With this light, predictive analytics can be seen as the clear winner for selecting target prospects or customers.
Predicative analytics looks at the bigger picture of marketing. It has the capability to consider all kinds of factors, rather than just one of two. It also looks at patterns in behavior, and makes predictions about future behaviors. This lets you more accurately pinpoint your potential customers, as well as stop marketing to people who are not interested in what you have to offer.
That sounds like a much more effective way to do business, right? The problem is that you can’t do it by yourself. Predictive analytics is a science, and it can take years to develop accurate predictive models. You don’t want to make the top 10 mistakes a novice with predictive analytics would make. That’s why turning to a reputable predictive analytics provider can save you time and money.
At Stics, we have spent year’s fine tuning our software and processes so our customers get extremely accurate predictions. We can take your data and give you insightful information about potential customers and the effectiveness of future marketing campaigns. With Stics predictive analytics solutions you can make your business more efficient and cost-effective.
