Leading casinos create competitive advantage by integrating predictive analytics into their marketing processes and business systems. Predictive Analytics allows casinos to accurately predict the future behavior and value of their customers to drive intelligent marketing and sales activities. Today, leading casinos are going even farther by utilizing new data and optimization techniques to increase marketing ROI and customer loyalty.
There has been significant growth in the use of analytics to increase customer and casino profitability over the last two decades. The benefits of creating customer segments based on profitability, and aligning appropriate marketing offers is well know and practiced today. As competition has increased, casinos are working even harder to increase their share of each customer’s wallet. In an effort to create and sustain a competitive advantage, cutting edge casinos have moved into the realm of “predicting” customer value and behavior to proactively manage customer relationships in an optimal manner. For instance, leading casinos predict which low to medium value customers are likely to become high rollers. These “high potential” customers are then targeted with more costly and attractive promotions and comps in efforts to migrate these customers to more profitable segments.
While predictive analytics is seen as a competitive differentiator, some casinos realize there are still relatively untapped assets and technologies available to keep them ahead of the curve. The use of customer data from disparate systems and optimization techniques are the tools of leading casinos today.
Casinos are realizing more and more profits from non-gaming activities like events, lodging and restaurants. The ability to integrate and utilize these data represents significant untapped potential to increase customer loyalty and profitability across the entire enterprise. More recently, a subset of the most advanced casinos are now starting to utilize technology to optimize their customer relationships and profitability.
The evolutionary path of analytics in the gaming industry includes the following stages:
1) Business Intelligence – Basis customer profiling and reporting. Manually driven.
2) Segmentation of customers based on profitability. Drives differing messaging and offers.
3) Prediction of future customer value which drives campaigns to reap full customer value.
4) Improve predictions based on 360 degree view of customer from all casino systems, e.g., gaming, lodging, spa, etc.
5) Campaign/offer optimization to maximize revenues or profitability.
Real competitive advantage begins at stage three. A few select players in the gaming industry are pushing the envelope with stage four and five initiatives.
Our next article will examine stages three, four and five in detail.
Jim Stafford has worked for leading companies in the Marketing Automation space (BI, data mining, campaign management and eMarketing) for over 10 years. He has held roles of Director – Database Marketing Solutions, Pre-Sales Manager, Product Manager, and Solution Architect at companies like Aprimo, Group1 Software, SAS, Siebel, SPSS and Unica. Mr. Stafford has consistently helped sales teams meet or beat established sales targets. He was the principal pre-sales contributor to Siebel’s second largest MA sale with General Motors. Jim has had considerable exposure to many verticals including: Financial Services, Hospitality & Entertainment, Automotive, Communications, and Utilities. He is a seasoned expert at discovery and knows key industry trends. Jim has an M.A. Degree in Economics from the University of Maryland and has been a frequent speaker at annual National Center for Database Marketing and Direct Marketing Associations events. Visit http://www.staffordsbsg.com/ to learn more about Jim and his company’s services.
Filed under: Customer Segmentations, Data Mining, Marketing Analytics, Predictive Analytics, Uncategorized
To round out the 360 degree view of the customer, casinos are also utilizing their website interactions and survey responses in addition to traditional purchase history and demographic data.
Analyzing website interactions is valuable for understanding whether the efficiency and design of the site is optimal. If a site is informational, are customers finding out about available amenities or directions to the casino quickly with minimal effort? If the site is for reservations or purchases, are customers able to book a room or make their selections before exiting? A full understanding of this channel can dramatically improve retention, sales and customer service, while minimizing calls to the call center.
Survey responses are also key to understanding customer behavior. Valuable insights can be collected to improve the customer experience and minimize customer churn by proactively addressing issues, both positive and negative. Text analysis of open ended responses can also be mined for the concepts and sentiment of comments, enabling unstructured data to become an integral part of customer analytics.
Also, in addition to business intelligence work, both website and survey (including free form text) data can be leveraged to predict likely future customer behavior. Inclusion of these 2 data sources to purchase history and demographic data will often provide significant lift to predictive modeling efforts.