Monday, August 3, 2009

Tribes In The Media: Casinos Look For Marketing Edge

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This installment of The Tribes In The Media is a Las Vegas Sun article from Friday that summarizes discussions held at a casino marketing conference held in Las Vegas recently.

Marketers: Reduce slot hold to attract more customers
By Richard N. Velotta
Las Vegas Sun
July 31, 2009

Longtime gamblers have been saying it for months: If you want people to play in your casino during the recession, reduce the hold on your slot machines.

A panel of marketing experts validated that strategy at last week’s Casino Marketing Conference and Player Development Summit, sponsored by Raving Consulting Co. at Paris Las Vegas.

About 200 casino marketing executives, mostly from tribal casinos and commercial properties outside Nevada, attended the event. Organizers called it “the recession edition” of the annual show, and many of the panels and presentations dealt with how to draw crowds in tough economic times.

In a session on what a casino’s best players are saying and doing during the recession, panelists concurred that many of them are staying home. But panelists said one strategy to get people in the door is to drop their traditional hold percentages to keep gamblers playing.

“Casinos have become far more interested in getting the money as quickly as possible to satisfy Wall Street,” said panelist Michael Meczka, president of Los Angeles-based MM/R/C Inc., and a 30-year member of the American Marketing Association and the Marketing Research Association. “Casinos no longer care about providing a great time, every time.”

Paraphrasing a line from 1995 Martin Scorsese film “Casino,” Meczka said no matter how slowly a casino wins its money it still wins.

He said a slight difference in slot hold — moving it from 7 percent to 6 percent, for example — can make a perceptual difference to the player. Lowering the hold enables a player to get more money back for every dollar played.

“The reality is the customer doesn’t know the difference between 6 percent and 7 percent,” he said. “But the big difference is that gamblers will play longer, have a better time and be more likely to come back.”

Meczka lamented some of the other strategies game manufacturers have used to enable casinos to win money from bettors faster – replacing the pull handles on “one-armed bandits” with push buttons, forcing gamblers to play maximum coins to win the biggest jackpots and designing games that play 50 or 100 poker games at a time.

On the table-game side, he said casinos are speeding up games with automatic shuffling machines and that dealers have become less personable in order to play more hands per hour.

“I view those as short-sighted answers to a long-term problem,” Meczka said.

But he admitted making those changes is tough sell with casino bosses pressured to maximize profits at a time when companies are heavily burdened by debt loads. But during a recession, when every casino is clamoring for market share, is a good time to push for bold changes to attract customers, he said.

Panelist John Thomas, executive director of Clear Seas Research, which conducts the VegaSAT Index, an independent Las Vegas visitor satisfaction survey, concurred that hard economic times are the best times to try new things to attract customers. His most recent surveys indicate there are plenty of things Las Vegas visitors like – and a few things they’d like changed.

Clear Seas’ 10-minute visitor intercept surveys conducted in late 2008 and early 2009 said the atmosphere of a casino is what attracts most gamblers to where they play and where they stay drives their gambling habits.

Most U.S. visitors said they were “somewhat satisfied” with slot machines and table games in Las Vegas and contrary to previous studies, non-U.S. gamblers are spending less than their American counterparts in the casino.

And what would those surveyed want to make Las Vegas a more desirable place to visit?

Respondents wanted restrictions on escort-service pamphlet distributors, improvements on mass transportation on the Strip, more family-oriented attractions, improved customer service, a theme park and a major-league sports team, Thomas said. They also wanted more information to be available on nongaming attractions and tours of local points of interest.

One of the highlights of the Casino Marketing Conference is Raving Consulting President Dennis Conrad’s presentation on the best and worst casino promotions of the previous year.

Conrad applauded Station Casinos for Texas Station’s job fair in collaboration with LasVegasJobs.com. He also gave a nod of approval to O’Shea’s squeamish “Freak Show” entertainment as a curious attention-grabber.

But Conrad saved his best material for ripping casinos for the worst promotions of the year.

As in years past, Conrad – who won’t name names when listing the worst marketing ploys – attacked properties with promotions that could be construed as geared toward children. He criticized “Three-Ring Circus,” “Kat in the Hat” and “Funhouse” with messages seemingly directed at children.

He also ripped promotions with religious connections, such as “Merry Giftmas,” “O Cashmas Tree” and “Stocking Stuffer” as well as IGT’s roundly criticized Noah’s Ark-themed slot machine.

Conrad also was critical of the tackiness of a Canadian casino that offered the giveaway of 22 Mercedes Benz B200 cars so close to the struggling Detroit auto industry and the O’Aces Bar and Grill in Las Vegas for giving away a free handgun for players who hit two royal flushes within 30 days.