In the changing world of casino gaming and hospitality, a flexible, enterprise-wide CRM system helps drive effective marketing.
There really isn’t a “typical” guest in a modern casino property anymore. Some are there for dining, some for entertainment, some for shopping and some, of course, for the gaming. Most casino patrons’ preferences are changing. This poses a unique challenge for casino marketing management.
In an effort to improve the overall customer experience, customer tracking and loyalty systems in a diverse environment like a casino have to aggregate employee contact with customers throughout the casino property. The casino has to offer an appropriate level of service to each type of customer. One major hurdle is that most gaming systems don’t interface with any non-gaming systems used in the hotel.
Harrah’s casino in Las Vegas famously pioneered business intelligence (BI) and customer relationship management (CRM) systems for the gaming industry, but it took nearly a decade and an investment of more than $100 million. The goal, especially for local and regional casinos, is to use analytics and CRM to drive profitability more efficiently and at a far lower cost.
Marketing strategies aimed at retaining current customers and driving new ones rely on the casino’s knowledge of both gaming and non-gaming customer spending patterns and preferences. It’s not enough to understand only a customer’s gambling patterns. That customer spending on non-gaming amenities is an increasingly important revenue stream for a casino property. Las Vegas, for example, now derives 35 percent of its revenues from gaming and 65 percent from non-gaming sources. Outstanding gaming floor experience alone might not get the customer to return. Non-gaming amenities, from spas and fine dining to shows and retail, are a growing profit center and target customers who don’t gamble—and can be a significant driver even for those who do.
Although there’s more than one type of customer who visits a casino, most still allocate a disproportionate amount of marketing dollars to the top 10 percent to 20 percent of the gaming customers. While casinos do have to carefully manage this revenue base, it’s also imperative to reward the non-gaming customers and understand their preferences and their contribution to the value equation.
Customer demographics play a key role in understanding that spending potential. Rewards that reflect what a customer wants have a much greater perceived value. The casino also has to weigh the cost of attracting and retaining each customer type versus the revenue they generate.
Average players need the same level of attention as the high rollers to move them up to the higher tier of players clubs. When the average player feels like a high roller, he’ll return more often and spend more. This high-touch service is effective, but costly. For it to make economic sense, it must be delivered to an average player at a much lower cost.
This is a massive challenge facing modern casino management—reducing the cost of managing top-tier gaming customers, while broadening the customer base to reduce risk of revenue erosion when top-tier customers leave. This combination requires flexible CRM technology backed by cutting-edge business processes.
A casino or any multifaceted environment will be slower to meet customer needs or meet them at a much higher cost if its CRM platform is not easily adaptable. Developing new automated processes is time-consuming and complex. It results in costly and manual high-touch marketing tasks. Marketing strategy can’t rely on a set of static or rigid processes that limit innovation and the ability to quickly and cost-effectively adjust to change. That can also restrict leveraging customer information, which is dynamic in origin and content.
A CRM system must provide both robust out-of-the-box processes customized for a casino/hotel and the flexibility to change as customer preferences evolve. Only then will it become an important source of competitive advantage to attract new customers and create brand loyalty.
The central advantage of Microsoft Dynamics CRM is that while it includes out-of-the-box capabilities, it also offers the flexibility to adopt new customer outreach tactics quickly. It enables cost-effective implementation of constantly changing marketing strategies to support a customer-centric business strategy.
Most CRM systems come with highly standardized business processes that work well for static business functions such as payroll processing. Their cost benefits are quickly diluted, especially in a dynamic environment like a casino. They’re inflexible, expensive and often become a liability. They often prevent casino marketing departments from adopting more effective customer outreach strategies.
In the current competitive landscape, a casino can’t afford to spend tens of millions of dollars as Harrah’s did over the course of a decade to build and reengineer loyalty and BI systems. Adapting technology to the business has to occur quickly, cost-effectively and continuously for the marketing plans to remain a relevant source of competitive edge for the casino.
If a loyalty- or player-tracking tool alone could drive profits, every business would be equally competitive. So what are the other sources of competitive advantage? What does the casino know about its customer? This is both “identified” and “unidentified” customer knowledge. The “unidentified knowledge” is what a business already knows about its customer, without being fully aware of the power of that knowledge because it’s often labeled as “common or obvious knowledge.”
While that type of customer knowledge is nothing new, it’s not likely being systematically exploited to build customer relationships. This knowledge typically rests with an individual casino employee, instead of a database. For example, your pit boss might know Jack has two kids and he coaches a Little League baseball team. The “identified knowledge” of the customer is information about the customer, such as an anniversary date, that’s stored in the database. Marketing can exploit this knowledge if it’s systematically used in building the customer’s profile.
Customer information is dynamic, and an effective marketing strategy has to be able to link and draw from multiple sources of customer information to get to know the customer better than the competition. Non-gaming amenities on the property are now as important a source of revenue as the gaming floor revenue in many casinos. Capturing data from the gaming tables and from the spa is required to understand customers’ taste. This is needed to determine promotions customers will want and the property can afford. The CRM platform needs to aggregate data residing in multiple silos such as the casino management system, food and beverage system, reward system, and hotel reservation system.
Getting all the data on one customer in one place is the first step to developing a 360-degree view of the customer. How is data on customer spending at the spa related to customer spending in the casino? How can marketing use this relationship in developing the customer’s profile? How is this knowledge meaningful in developing customer loyalty? These are some of the basic questions that a casino will be able to answer by aggregating data sitting in multiple “silo-ed” systems.
Integrating with the property management system and rendering information on the concierge’s mobile device can help hotel staff to greet a frequent customer by name at the hotel entrance. This might be an exchange that lasts only a few seconds, but it goes a long way toward creating a more personal experience. Casinos—or any organization for that matter—can cost-effectively create a higher level of personal treatment by integrating and rendering data from multiple systems.
Marketing strategies are as powerful as the speed at which you can analyze data from multiple systems. For example, real-time data integration with the player-tracking system might allow a customer who gets hungry while playing blackjack to instantly use reward points to purchase a meal at the buffet. In other situations, the pit boss might want to know when a high roller’s player card is swiped on the floor.
Similarly, real-time data integration can permit knowing that a customer likes to play golf when making a room reservation, and offering a pro shop coupon in the room confirmation e-mail. These processes—which depend on how quickly relevant information on a customer can be pulled to offer a promotion the customer cares about—can, without human intervention, make the interaction with the customer personal and go toward increasing brand loyalty.
Microsoft Dynamics CRM is designed to work seamlessly with other systems. It natively integrates with any application that can expose and consume Web services. For applications that can’t expose or consume Web services, Microsoft BizTalk provides multiple integration points. Microsoft BizTalk has a comprehensive list of adaptors that make integration both less expensive and less time-consuming. This addresses a major hurdle casinos face in implementing an effective CRM technology: aggregating data from multiple gaming and non-gaming platforms. Data integration services are built in to the BI platform.
Dynamics CRM also provides extended capabilities such as the ability to analyze the revenue potential of gaming and non-gaming customers and the associated marketing costs. SharePoint integration with Microsoft SQL Server lets you store, share and search for information, as well as customize dashboards with visual data decomposition or drill-down capabilities.
Microsoft’s BI strategy relies on the basic premise that powerful analytical capabilities must be combined with equally powerful yet ubiquitous and familiar collaboration tools such as SharePoint and Excel to share data intelligence externally and internally. It’s also important that these tools be easy to learn and intuitive. Data visualization tools such as Office have given users self-serve capability in data analytics. The ability to analyze millions of rows of data inside Excel without DBA involvement is game-changing. This means more extensive and widespread use of data analytics as a tool for decision making across the enterprise.
Nearly 10 years ago, I ordered lemonade without ice at an upscale restaurant because it was a particularly cold day and icy lemonade was just not as appealing. The restaurant charged me two dollars extra because more lemons had to be squeezed in a glass without ice. Today, this incident would be instantly posted on Facebook to hundreds of friends, likely from the table itself with a picture of the leftover iceless lemonade and my thoughts on the whole matter.
Internal customer data housed in casino management systems, databases or personal knowledge of casino employees is as valuable as external data in social media sites. What’s the value of a posting on Facebook stating that someone is having a nice time at a certain casino? Generations X and Y post on Facebook or blog frequently. About 82 percent of Facebook users in the age group 18 to 24 check Facebook more than once a day.
As they get older, they’re likely to stick with the habit, because it’s how they’ve learned to be social. More than 70 percent of the age groups 24 to 34 and 35 to 44 check Facebook more than once a day. The fastest-growing segment of Facebook users, according to The Neilsen Company, is the 35- to 40-year-old age group. This is also the most important demographic for casinos.
Social media sites have the potential to compound, many times over, both the bad and good experiences. Unlike 10 years ago, a customer today is able to quickly spread the word about an “experience.” Every experience matters and has a potential impact on the bottom line.
Content is distributed in many social networks such as Twitter, Facebook and YouTube. It doesn’t follow any set standard. Casinos realize the power of social networks and social media marketing, but understanding how to harness that power to their advantage is complex.
A marketing function like scanning Twitter accounts for a city name and words such as “upcoming trips” can correlate to other external data sources such as an upcoming conference in the neighboring town. This can pinpoint a potential source of new customers for the casino within a 10-to-20 mile radius. Mapping this data in Bing maps will show visually where the people attending a conference are likely to stay. This information can help determine how busy the casino is expected to be during those days of the week, which helps assess the opportunity cost of any promotional offer it might want to plan.
By itself, a technology such as SharePoint doesn’t address the complexity inherent in developing digital marketing plans. It can, however, help a casino be nimble and cost-effective in implementing its social media strategy. SharePoint has social media connectors as well as predefined components to easily launch social sites, wikis and blogs.
Dynamics CRM and SharePoint are highly complementary and can deliver an unparalleled level of insight about customer preferences and characteristics to the casino. The interoperation of Dynamics CRM, SharePoint and SQL Server exposes internal and external customer data to the CRM system and BI tools for understanding and building marketing campaigns that customers value.
Casinos can use social media in other innovative ways to better engage customers. They can provide social sites and other forums such as blogs to share experiences and interests. One avenue is to link individuals with like interests via a social network at the casino/hotel property itself. Social data can have powerful uses in being able to connect people with similar gaming preferences or interests. For example, a casino can offer free club rentals or perhaps free samples of the latest model of Titleist to a group of friends interested in golf.
By using social data, the casino can target promotion dollars to create a group social experience such as a golf outing that is, to the group, significantly more fun than a set of separate promotions, even if the dollar value of individual promotions is greater. Using social data can help exploit the notion that the perceived value of a promotion does not always directly correlate to its monetary value.
Analyzing social data on how customers interact with one another on social networks will help the casino/hotel target promotions to networks or a group of friends at the same time. Tracking this group social experience is important to understanding the ROI and designing similar social experiences to attract the group back to the casino.
An effective BI strategy must be able to assimilate data from external sources, including the Internet, and correlate it with data in internal systems to draw intelligent conclusions about a customer’s spending pattern, tastes and level of satisfaction. Social media marketing strategies that use social data rely heavily on being able to cost effectively analyze large volumes of unstructured data.
Similarly, predictive analysis can provide valuable insight into customers’ behavior by observing customer preferences over a long period of time and by finding relevant data from external sources. A major challenge in making sense out of external data is that it resides in no one format and is largely unstructured. Valuable data might reside on YouTube or in pictures, RSS feeds or legacy systems. Moreover the volume of data can be in petabytes (1 quadrillion bytes), and it’s costly to create and maintain an on-premises infrastructure for big data analysis.
Hadoop is an open source platform for analyzing big data workloads in a distributed environment. Microsoft makes Hadoop available on both Windows Server and as a service on Windows Azure. Big data as a service on Windows Azure is a highly cost-effective way to implement a Hadoop platform. You can then use other Windows Azure platform tools such as Bing maps for geospatial analysis, SQL Server and SharePoint. This can help casinos visualize extremely large data sets from diverse sources. These powerful data aggregation and analysis tools give casinos contextual data to develop a deeper understanding of customers’ preferences and habits.
The ultimate goal is real-time analysis of large volumes of structured and unstructured data to offer promotions while a customer is on the property or engaged in a specific activity. For example, correlating information on visiting customers who are inclined to see shows and the number of unsold tickets to a local show to offer last-minute deeply discounted promotions can help fill the seats for an event whose fixed cost has already been incurred. Smartphone usage, the explosion of social media and cloud computing are sources of potential contextual information on customers that Dynamics CRM can use strategically to grow revenues.
Many states are contemplating legislation to build casinos or regulate online gambling as a source of tax revenue. There’s also a cultural shift, partly because of the prevalence and popularity of non-gaming amenities on the casino properties: Gaming has become more accepted in society as one of the mainstream sources of entertainment. It’s certain that, over the next few years, gaming platforms will extend to the Internet, mobile devices and TV.
Traditional gaming floors in the brick-and-mortar casinos with standalone slot machines and poker tables are also modernizing to server-based, networked gaming floors. In-room gaming is also being extended, so the traditional boundary of the gaming floor is evaporating.
The Dynamics CRM platform can seamlessly interface with increasingly diverse gaming platforms and channels to access them. The platform’s open architecture gives developers the choice to build Web applications on other programming languages. It also includes support for open source languages such as PHP.
Security and privacy are important considerations in future multichannel and multiplatform gaming architectures. Security and privacy controls are built in to each component, from the infrastructure layer to the application layer. Security is maintained, enhanced and regularly tested.
The Windows Azure platform provides on-demand compute and storage services to host, scale, build and manage next-generation gaming applications. On-demand provisioning of storage and compute capacity will influence Web-based gaming application designs because of a high degree of variability between peak and non-peak usage of online gaming platforms. Windows Azure delivers both high availability and dynamic scaling, where customers pay for consumption.
Integrating customer interactions with the property at different points during the customer’s stay and integrating casino CRM platforms with new-age gaming platforms will lead to a rich and impactful relationship between a casino and its customers. Actionable analytics that draw insight from social and contextual data help create memorable customer experiences and emotional attachment to the brand.