Identifying their most profitable customers is becoming much less of a gamble for gaming houses. More and more casinos are using magnetic-stripe cards to help identify their most valuable gamers and shower them with points, perks, special offers and invitations to big events.
As with merchant loyalty card marketers, casinos long have worked hard to try to know their customers. Casinos, however, may be doing a better job, observers say, though some are having difficulty aggregating all of their customer information.
Indeed, as the computer era continues to unfold, the sophistication of casino loyalty programs continues to increase. In a recent development, casino chains have learned to share wagering data among all their properties in a single account for each customer. That means a gamer can skip from one casino in the chain to another, as many enjoy doing, while still keeping all the rewards on a single card and all the profits within a single company.
In the next big step in resort-casino loyalty programs, observers say, chains will paint a more complete picture of each club member by combining betting records with data on how much each spends on hotel rooms, shows, spa visits, merchandise and dining. The additional information will help marketers identify their best customers more accurately and target marketing campaigns more precisely.
For now, however, the resort-casino chains are busy overseeing the information-gathering of their relatively new enterprise-wide loyalty programs. A good example is MGM Mirage, which is based in Las Vegas and operates five locations in its hometown: Bellagio, MGM Grand, MGM Mirage, Treasure Island and New York-New York. The company also operates the Beau Rivage in Biloxi, Miss., and the MGM Grand Detroit.
MGM Mirage has consolidated 17 loyalty programs with 16 databases into a single entity called the Players Club. Until recently, each casino offered two or three clubs, perhaps one with points for slot-machine play, another for complimentary plays on table games and a third with perks for high rollers, says Carolyn Leveque, MGM Mirage's director of loyalty marketing. Ten million active members have signed on with the new club, she says.
Each of the old clubs built loyalty to one casino, but none fostered allegiance to the chain because points accumulated at one venue did not transfer to another. Now, with a single club, when gamblers who have amassed points or comps at Bellagio present their cards at Treasure Island, the companywide information pops up on a computer screen. The staff thus recognizes the customer's spending at a sister property and responds accordingly by offering rewards and ratcheting up the hospitality, says Leveque.
"Cross-site behavior has skyrocketed," Leveque says. "It's a success at keeping people in the network."
The ability to carry points from one casino to another in the same chain is called "portability," and it is a worthy goal for companies seeking to maximize profits, says David W. Norton, senior vice president of relationship marketing for Reno, Nev.-based Harrah's Entertainment Inc. Harrah's runs 28 casinos in 12 states under the Harrah's, Horseshoe, Showboat and Rio names.
"The key thing is when customers choose to visit another market, they're recognized for their loyalty to the company overall," says Norton.
Harrah's Total Rewards loyalty program was launched in 1997 with only limited portability, Norton says. At first, the individual casinos had access to point totals from sister establishments but sometimes balked at granting a reward because they had no guarantee of recouping the expense.
In 2003, Harrah's created a kitty in which all Harrah's casinos contribute to cover such risks, thus removing the financial disincentive and establishing true portability across the whole company, says Norton. "You can have a nice meal in Atlantic City based on your play in Las Vegas," he says. Today, the club's 6 million active members account for 76% of the chain's gaming revenue.
Casinos began tracking points across all of their properties when they realized gamblers like to split their spending among several gambling halls. "When people come to Las Vegas, they're going to visit five, six, seven places," says Leveque. "Why not make them all Players Club resorts?"
Both Harrah's and MGM Mirage offer affinity cards, and while Harrah's already links the card to its loyalty card, MGM may soon do so as well.
Harrahs' credit and loyal cards already share a currency. The Harrah's Total Rewards Visa card, issued by MBNA, was launched in 2001. Cardholders earn one Total Rewards Bonus Reward Credit for each dollar spent on qualified purchases. The credits from the credit card are deposited into the cardholder's Total Rewards loyalty account each month, thus linking the two card programs. Members can redeem the credits at any Harrah's Total Rewards Center.
The MGM Mirage Rewards Visa card, issued by Chase/Bank One, was launched in July. Cardholders earn two points for every dollar spent in the chain's casinos and one point for other purchases. For every 2,500 points, cardholders receive a $25 certificate they can use toward the price of a room, meal or use of other amenities at the company's resort casinos.
Eventually, MGM Mirage wants to link its Visa card to the Players Club card, Leveque says, but the company would not combine the functions of the two cards. MGM Mirage would not be able to track players on a consumer credit card, for example, but the credit and loyalty cards could share a rewards currency to drive up spending and increase relevance for players.
Like most casinos, MGM Mirage and Harrah's award points for slots play and comps for wagering on table games, such as roulette, blackjack and craps. When players slide their loyalty cards into the slot machines' readers, the one-armed bandits greet them by name, offer point totals and start counting bets.
At tables, gamers hand the card to a pit boss or dealer, who swipes it to retrieve information on the customer and signals the start of gaming on the account. Pit bosses observe the table play and estimate the guest's average bet, which is recorded and serves as the basis for comps.
Gamblers cannot see the value of the comps they have compiled on their MGM Mirage Players Club cards, but the company records the comps and associates them with the card account numbers, Leveque says. Some comps are awarded by marketing representatives and pit bosses, but most are doled out by "hosts," the employees in charge of catering to big players. Comps are printed on slips of paper or tracked electronically.
Players have a sense of the comps available because they know how much they have been wagering, says Leveque. "Typically, you come in, you play, you ask for comps as you go," she says. "Or, when you check out, your host will comp some items off your hotel bill."
Though players may understand the comping system and can check slots points at will, they sometimes need clarification of their place in the casino pecking order. Casinos can create clubs with different levels to fill that need, says Jeffrey Compton, vice president of Compton Dancer Consulting Inc., a gaming advisor in Las Vegas.
"The tiers tell the customer why he should use the card," says Compton. "It's important with people new to gaming. Tiered loyalty programs can help those customers recognize their status."
In Harrah's tiered program, gamers who rack up 3,000 credits during a calendar year earn Platinum status, while those who amass 10,000 credits rate the Diamond designation. Flashing a Platinum or Diamond card brings perks, like allowing the guest to slip into the shorter line at the buffet. The Diamond Lounge, which Norton likens to an airline club, is reserved for Diamond-level members only.
Tiered perks keep gamers coming back for the chance to pile up even more points and thus enjoy still more benefits, says Norton. "Why would someone go someplace else where he's just an average customer?" he asks. "That's why we did it, and we think it's been pretty successful."
No Guesswork
The cards eliminate guesswork, too, says Norton. Customers know what they need to do to achieve privileged status. The staff, with a glance at the card or at a computer screen, can tell which customers expect better service.
MGM Mirage does not use a tiered system, says Leveque. "You don't have to worry if you're a No. 1 player or a first-time visitor. You'll still be treated like the highest valued customer right away," she says.
Just the same, Leveque admits that tiered systems have advantages. She says they give customers something to work toward, and casinos can tie their rewards to customers' experiences.
In what some might view as an alternative to tiers, MGM Mirage operates the Holiday Gift Shoppe for Players Club members. Every club point also earns a Holiday Gift Shoppe point redeemable for merchandise at an event held for a week each December at all of the chain's Las Vegas properties. A ballroom in every resort is elaborately decorated and filled with everything from digital cameras to a BMW. Members can stroll among the displays in all five locations to choose their own gifts.
Sophistication is growing at both the tactical and strategic levels as offers are tailored ever more closely to customer preferences. Based on observed data, offers are customized with cash, food and shows, Leveque says.
The information is not captured just for marketing. Virtually all of a casino's employees use customer data to perform their jobs better. But employees do not have access to all the customer information, Leveque says. They get only the data that will alert them to customers' spending habits.
Today, much of the information is based on wagering. But casino resorts are beginning to capture data on everything their guests spend during their stays, says Terri Gaughan, a loyalty marketing consultant at the Milford, Ohio-based Colloquy Group. "They're beginning to realize that gaming isn't where all of their revenue is coming from, and it's not their most profitable revenue."
About half of revenue is generated from other things, including hotels, restaurants, nightclubs, shows and spas, Gaughan says.
What information is MGM Mirage still not capturing? Although the resort casino chain is Nevada's biggest retailer, it still does not integrate information from its shops into the bigger picture of what guests are spending, Leveque says.
Gathering information should not become a goal for its own sake, either, Leveque cautions. Casinos have to figure out how to use the data, too.
"It's a matter of leveraging that information from a marketing perspective and translating it into a meaningful value proposition for the customer," she says.
