Archive for August 2011

Or maybe that was an apple a day. Either way, the marketing world has been taken by storm recently with daily deal websites. From Groupon to Living Social to Deal Chicken, people are becoming obsessed with the newest daily deal. Google is at this time pondering purchasing Groupon for upwards of $6 billion. But this begs the question, should casinos get in on the “daily deal” action? I have occasionally seen casinos such as the Nugget in Reno and the Hard Rock Hotel Casino in Las Vegas on these daily deal sites offering things like room deals, or room and show ticket offers for 50% or more off retail. But does it make good business sense for casinos to be offering such deals?

The first question is will this drive incremental revenue to the property or will it simply encourage existing customers to get a discount on their next trip, which likely was already planned? The answer is that it probably depends first on what kind of offer you’re putting out there. A simple dining offer will probably get you a few extra customers, however it will also probably take away from space available for your regular gaming guests. So, that’s a bust. A room offer could be a good idea, if you make sure good controls are in place. The idea behind a room offer would be to drive cash revenue on rooms that otherwise would be empty. This can be done with certain restrictions or availability periods, however, be careful of making too many rules and regulations or you could turn off potential repeat customers. If your casino has entertainment, offers on show tickets is another option for a daily deal. These offers should be released when you know that you have extra tickets that would not normally sell at full retail. Then, at least you recover a portion of ticket sales that you would not have normally collected. Finally, and obviously, are gaming deals. These deals should only be directed and redeemable by “new” customers. The whole idea of offering 50% or more off of gaming is to encourage brand new customers to come in and try out your gaming product. It does your casino absolutely no good at all to offer deep discounts to your already loyal customers through daily deal websites. This is what you use direct marketing for.

So all in all, using daily deal websites can work for your casino if used properly. These deals should be evaluated heavily prior to entering any agreements with the deal companies. Take into consideration all possible problems that could arise from executing a daily deal. What happens if you sell more than you think you can handle? What if customers find a loophole in the fine print that allows them to take advantage of you? Think and rethink the deal before issuing it. And keep in mind, you do not want to drive your regular customers in with daily deals. Use your direct marketing for this. Daily deals should be used solely to drive new business.

Have you ever used a daily deal, or launched one through your company? How did it work? Do you think they are a good idea for casinos?


In celebration for acheiving AAA Five Diamond status for the third year running, The Venetian Las Vegas and the Palazzo Las Vegas, owned by Las Vegas Sands, are running a “Five Day Five Diamond” promotion through social media. All you have to do to join is follow @VenetianVegas and @PalazzoLasVegas on twitter and throughout the week this week they will be tweeting clues with the hashtag #5day5diamond about where on their properties you can find a “diamond.” Then, you have to snap a photo of yourself with the diamond when you find it and post it to Twitter with the hashtag and the Twitter handles of one of the properties. Prizes include high end gifts like a diamond necklace, spa getaway and free hotel stays at either property.

I think this is a pretty clever promotion. I am loving the use of social media to get cusomers involved. Yesterday, there were a series of clues posted such as, “#5day5diamond Scavenger Hunt – Hint #1 looking for this Diamond might involve water. Hope you don’t get seasick. Rules:” Yesterday, they included 4 separate clues, and based on the posted picures I saw, the diamond was somewhere along the canal, I believe in the Venetian, on a light post. If I lived in Vegas, I’d probably take a day this week to go scope out the property and try to find the diamond. It’s also a great way to promote the fact that your company just earned such a prestigious award. It gets people through the doors that may not already be venturing there, and it’s a good way to get your name buzzing on Twitter.

Overall, a solid promotion. Who doesn’t love diamonds?

There’s a lot of buzz these days about social media and its use in business. In casino marketing, email blasts are beginning to replace the old standard of postcards and self-mailers to invite guests to special events. Room offers are being sent through email. Special deals are being “tweeted” and “facebooked” (sidebar: interesting that tweeted and facebooked are now very well known verbs in the English language) so friends and followers can obtain the same deals, or maybe better deals, than loyal gaming customers. However, because social media has become such an overnight success, I am left to wonder if anyone has really taken the time to evaluate whether these online tactics are actually more beneficial, or have a higher response/success rate than snail mail?

I came across an article that addressed this point. At a recent Casino Marketing Conference, three marketing professionals argued that social media is not worth all the hype it is receiving. When it comes down to what your customer really wants, the most important things are as follows:

1. Program Transparency: Every casino tracks and rewards players differently, and customers want to know how they can maximize their rewards. The most successful tracking systems allow customers to readily view and track their points and comps. In a tiered system, they want to know how to reach the next level. And when they receive rewards or offers, they want an easy way to redeem their offers, rather than a bogged down system full of long lines and paperwork.

2. Free stuff: Ok, clearly everyone likes free stuff. But, for example, having a free tournament with a decent prize structure versus having a tournament where a guest has to pay, but with a higher payoff will end up being more attractive to the majority of guests, and will not cost you as much. Focus on the free. What kind of promotions can you run that will benefit the most guests and will still not cost you an arm and a leg to execute. Which leads me to…

3. Creativity: This goes back to one of my previous posts about chasing your competitors. Customers want something new and different. They like new ideas and creative promotions, rather than the same ideas that your competitors are promoting down the street. Simply copying an idea that you think is successful won’t cut it with gaming customers who have so many choices in the marketplace.

4. Direct mail vs. social media: It seems that direct mail is the way to go. Customers value room offers and offers with high dollar values. They also like calendars, so they can plan their trips in advance. Of the almost 40 million people who check social media sites and email several times a day, few are actually gaming customers and even fewer actually hold value for your business. Also, casino databases do not have comprehensive email information for their customers, and often many of the email addresses are incorrect.

Do you think that social media will eventually phase out traditional “snail mail” direct mail campaigns? Or do you think that direct mail will always be an important part of the casino business?

This can become...

I just came across a very interesting article by David Schwartz from the Las Vegas Business Press about cost strategies for companies in the hospitality industry and it got me to thinking about the most logical and effective ways to deal with costs when the economy is not running at full strength. The obvious choice would be cut, cut, cut. Logically, if revenues are down, the easiest way to help boost margins is to cut costs. Many of the cost cutting strategies affect your front line employees, but this may not be the best way to approach your cost strategy. Eliminating the need for overtime, running skeleton crews during off-peak times and even eliminating free meals for employees (to name a few) can greatly affect the moral of your employees. And if they’re unhappy, you can bet at least some of that unhappiness will be passed along to your customers. In the years since the recession began in 2007, I’ve seen a few waves of layoffs and position eliminations as a cost cutting strategy. It’s very hard to be productive when positions are being cut left and right and you’re left wondering if you’re next. I’m not saying that this is a completely unnecessary strategy, but it seems to be the first place companies go to reduce costs and it’s often the most detrimental to the attitudes of the employees who are left behind. As a result of layoffs and position eliminations, remaining employees are also left with a greater workload for the same or sometimes less money than before. Yet another way companies are not helping the attitudes of employees.

...this faster than you may intend.

I haven’t even mentioned the cost cutting strategies that directly affect your customers such as reduction in comps or, like a Las Vegas casino recently did, elimination of comps and even revocation of comps. It doesn’t make sense to alienate your customers or scare them away just so the CFO can sh

ow improvement on the bottom line. There has to be a point at which upper management starts realizing that these cost cutting strategies may not be the best long term solution, and hopefully that does not happen before it’s too late and your customers have gone looking for greener pastures. As I’ve mentioned before, the gaming industry is experiencing a stagnation, and in some cases decline, and any strategy that sends your customers to a competitor because you’ve committed to a cost cutting strategy that negatively affects their bottom line is definitely not the smartest move in my opinion. Why should your customers wait in longer lines, or go to dirty restrooms just because you’ve cut your staff to levels that no longer make your organization as efficient as it can and should be?

It would be pretty naive to assume that cost cutting measures are always efficient, effective and full of sunshine and rainbows, but I would hope there are better ways to look at the BIG picture, rather than going for the most obvious choices that can seriously harm your most basic business practices. Using the charts above, using innovation to improve business rather than simply cutting costs or spending money on things that are simply sustaining the business can greatly help the bottom line and can put you a step ahead of your competitors.

Trust me, this is NOT where you want your business to end up.

It’s definitely important to be knowledgeable of what your competitors are up to, but how much time, energy and cash should your company devote to chasing them? With the recent declining economy and especially the hard hit the casino industry has taken, it is very important to stay on top of your game and fight for customers. In markets like Reno, and to a lesser extent, Las Vegas, it’s a fight with the guy down the street for business. But, I’m left wondering how much attention a company should focus on what the competitor is doing, and how much time a company should spend actually coming up with their own ideas or perfecting on ideas that are currently working?

For example, if a certain event or promotion is doing well down the street, should you spend tons of time and effort trying to copy that idea? Or just create your own idea and blow the guy down the street out of the water? I tend to lean towards the latter. Being innovative and creative is SO important when your industry is suffering as the casino industry is. I mean, to draw a parallel, if McDonald’s launches a new salad line, should Burger King IMMEDIATELY scramble to launch a competing salad line? Or should they try something new, like a new smoothie line (assuming that McDonalds has not already taken that approach). You get what I’m saying. I strongly feel that creativity is the key to success. Being innovative. Trying something new and different, not just copying someone else.

In the technology industry, the newest thing is tablets. Well, who created tablets? Apple of course. They came out with the iPad. Then, HP had a tablet. Then, Sony had a tablet. And so on and so on. Apple is the only one who did it right! They came up with the idea, did it right, and everyone else is left catching up. When Apple came out with the iPhone, it was super innovative, and the other companies I mentioned above followed suit and came up with new touch screen smart phones to imitate the iPhone. Then, Apple spent the next few years creating the iPad. If even ONE of these companies had skipped the step of the smart phone and basically INVENTED the tablet concept, they’d have a huge head start. But instead, technology companies are just waiting for Apple to come out with the newest, greatest thing and then they follow suit. Of course, I’m leaving out the fact that Apple is very trendy, and very good at what they do. They have incredible brand loyalty as well which is also very important. But the concept remains. When should a company forge their own course and stop following their competitors so closely?

The answer I’m sure is very complicated, and involves needing very smart, dedicated people on staff. What do you think about this situation? When is it prudent to be a follower and when is it more valuable to be an industry leader?

About Me

This blog is devoted to the gaming industry news and information - keeping you up to date on the happenings in the gaming world. My personal expertise lies in event planning and entertainment in casinos.

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