Qualex Asia

Are you?

Gambling – the wagering of money or something of material value on an event with an uncertain outcome with the primary intent of winning additional money and/or material goods – has been with us since ancient times; during the Trojan War, Homer wrote about the mythological hero Palamedes – who is credited with inventing the dice – creating games of chance to entertain his troops; Greek mythology tells the story of Poseidon, Zeus and Hades dividing the world between themselves in a dice game; Poseidon won the sea, Zeus the heavens and Hades the underworld. The land, I presume, was left to the rest of us.

From these intriguing beginnings have arisen the opulent gambling temples of today; Las Vegas's Bellagio, Palazzo and Wynn, Atlantic City's Taj Mahal, Tropicana and Caesars, and Macau's Venetian, Grand Lisboa, and, to, ironically, come full circle, the clumsily named casino 'Greek Mythology' in Taipa.

Just like executives in every other industry, today's casino executives are faced with an inherent problem – how do I differentiate myself from my competitors when the tools I have at my disposal are basically the same industry-wide? The answer lies in business intelligence, customer intelligence, data modeling and predictive analytics. Companies now have to be smarter than their competitors in attracting, understanding and marketing to their customers. Although marketing is best when it's subtle and it taps into a customer's subconscious wants, desires and needs, the goal of marketing is anything but subtle, its sole objective is to generate revenue. Nothing else matters. ROI trumps all.

There is an old adage in marketing circles that says it is far more cost effective to keep a customer than to acquire a new one. On average, it takes five times as much time and money to find a new customer than it does to retain a current customer. Business intelligence, customer intelligence, data modeling and predictive analytics isn't just about analyzing data, it is about creating a customer relationship that can be analyzed, scrutinized, and, most importantly, predictive as ROI is all about future return. These tools help predict future patterns of behavior so that a business can create a 360 degree view of its customer. This analysis can include not just a customer's basic demographics, but also such psychological traits as his or her wants, desires and needs, thereby making any marketing offer much more enticing and, therefore, much more difficult to resist. Today, BI, CI, data modeling and customer analytics can be used to:

Anticipate a customer's needs. 

Enhance a customer’s experience, thereby maximizing profitability. 

Anticipate a customer's ultimate profitability to a business.

Retain existing customers while also providing knowledge to acquire new ones.

Provide the right offer to the right customer at the right time and at the right price.

Take market share away from competitors.

In the casino industry today, analytics and data modeling can be used to project the likelihood of a customer's response to an offer based upon his or her past history, which can help identify the optimum offer to send out to that specific customer. For example, if a customer has shown a history of dining in one of the casino's finer restaurants, he or she may not respond well to – or actually be offended by – an offer for the buffet. Logistics must also be considered. Too often marketing departments send out '2-for-1' buffet coupons to patrons who either have to fly or drive several hours to get to that property. In these cases, the buffet offer has to be accompanied by a free hotel night or the offer's response rates will be exceedingly low.

One key thing that must be factored into these types of analytical data models is not simply to look at whether the customer redeems the offer, but also to look at how much additional revenue the offer generates. For example, if two different patrons receive the same offer and one customer redeems it and also hits the tables and gambles extensively while the other customer just takes the free food and doesn't generate much additional revenue, the casino will obviously value the former customer over the latter simply because he or she is bringing more revenue into the property. Models that include gambling and overall property spend can help casinos target only their most profitable customers and not waste offers – and valuable hotel rooms – on customers who, comparably, generate less than their counterparts.

Models such as these aren't unique to the gaming industry. The financial services, telecommunications, retail, insurance and healthcare industries can all benefit from using such data modeling and analytics techniques. Based upon company customer segments and offers selected for a marketing campaign, a company can even project the anticipated redemptions and potential revenue that will be generated from a campaign before it even begins. This gives a company's marketing department enormous leverage as they will have the opportunity to review an anticipated campaign and make adjustments to meet the desired results of the campaign before it has even started. Following the close of the campaign, an accounting report of the campaign that compares projected responses to actual responses can be generated to discover the true ROI value of the campaign. This comparison feeds into the creation of the next campaign, and so on, and so on.