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How can casino gaming be used to maximize the benefits for tourism destinations?
Edited by Ki-Joon Back and John Bowen
Introduction
Marketing professionals have long recognized the importance of fostering loyalty among past and current customers through database marketing. Retailers and supermarket chains have long embraced loyalty programs in order to reward loyal customers through targeted offers. Airline frequent flyer and hotel loyalty programs have become the foundation of marketing strategies for airline and lodging companies. Yet, no segment of the hospitality industry devotes more effort and allocates a greater portion of their marketing dollars to customer loyalty programs than the gaming segment.
This paper examines customer reinvestment strategies in the gaming industry, the tactics that gaming operators employ to foster loyalty, the measurement tools they utilize to track the success of their programs and recent trends that track the ever-increasing amounts of marketing dollars that casinos are willing to reinvest in their customers.
What is player reinvestment?
The practice of rewarding customers in the gaming industry is referred to as "player reinvestment." Player reinvestment is comprised of all marketing expenses that are used to foster loyalty and encourage repeat visitation among members of a casino's loyalty program. In practice, patrons are encouraged to join a particular casino's rewards program, often called a "slot club," through a convenient and highly visible rewards center, advertising, in-house signage, collateral material, and personal selling. Once enrolled, customers are issued magnetically encoded cards that they insert into slot machines or present to dealers when wagering at table games. Gaming activity is then tracked through the casino's information system.
Over the span of several visits, the casino management system develops a profile of each player by analyzing the kinds of table games and slot machines the customer likes to play, the size of their wagers, the speed with which they wager and the time they spend at each gaming device or table game. The system can then predict, based on each customer's past behavior and the games that they typically play, how much the casino can potentially or theoretically earn from that customer each time that person visits the casino. Armed with that information, a casino operator then designs strategies to foster loyalty encourage repeat visitation.
Casinos offer basic benefits...