Slot Management 101

Slots of strategy or not!

By Andy Cosgrove

Some casino managers can’t tell the difference between a strategy, a goal, and a hot tip they got from a friend of a friend on how to get rich quick!

In the first part of this two part series, we discussed what a bad strategy looks like and how even the best of intentions and eloquently crafted goals can quite easily spiral out of control into a catastrophichurricane of disastrous decisions and financial hardship. In this second part of the series, we’re going to discuss what a good slots strategy might look like and the importance of accurately framing the key opportunities that you wish to exploit as opposed to throwing around slogans that you hope somehow symbolize progress. Successful leaders are constantly creating new strategies and adjusting the space between goals and objectives. They have their ear close to the ground, listen to their customers, keep their eye on the competition and forge new sources of advantage that build on existing strengths to produce the kind of leverage that rivals will struggle and fail to keep up with. The following is anexample of a good slots strategy with a built in analysis of why it worked:

The problem: Low rate of repeat visits after major events – Major events such as rock concerts can easily fill a hotel and potentially generate a lot of extra revenue for the casino both before and after the event. One such Hotel attracted many famous artists, yet slots revenues failed to impress, and the owners of the resort noticed the shortfall and demanded a stronger performance from the casino, and rightly so. The casino leadership team were puzzled so asked for a root cause analysis and a strategy that would maximize any events revenue making potential moving forward.

The diagnosis: I started with a root cause analysis that generated the following results:

1. Not enough time was spent promoting the event with casino customers prior to the event, especially with those customers who had to travel long distances to be there.

2. No incentive to come back to the casino after the event.

3. Cross promote events with the parent company and hotel in the months leading up to a promotion and ramp up the onsite marketing activities during the days immediately surrounding events with a focus on adding additional value to the customer experience and strengthening the brands reputation.

4. Design metrics to measure reinvestment levels prior to events; to track play, visits and retention levels during and after events, and to compare performance to similar marketing campaigns post event with a focus on continuous improvement.

3. No cross promoting of the event with the Hotel& parent company before and after the event.

4. The wrong kind of KPI’s were being used to measure success.

Clear

And Sustainable

guidance: After defining and measuring the key issues affecting revenues, the discussion turned towards creating clear and sustainable guidance that should include the kind of flexibility that builds on success.Guidance is used to channel actions in the right direction without writing the detailed instructions on how to reachyour final destination. It’s a little like using a GPS, that provides you with two roads to get you from location A to your home. The roads represent constraints and if you don’t follow at least one of the roads you aren’t going to make it home any time soon. You may take a wrong turning, but just like a good guiding policy, if you follow the road map, you’ll soon find yourself back on track. After further discussion with the leadership team, we designed the following guidance:

1. Promote events at least 3 months prior to the event with a focus on both VIP players from outside the area and player club members living within driving distance.

2. Create incentivesthat attractplayer’sinto the casino before eventsand encourages them toreturn to the casino post event.

Lights, camera and action: Strategy without action is nothing more than words, and no matter how colorful your slogans, or how clear your objectives, word’s won’t fill empty seatsbecause only through achievable actions will your strategy yield the expected results. In project management the action part of strategy is known as the delivery phase and it’s through coordinated actions that you strategy comes to life,even if it means making difficult decisions. After much debate with the leadership team and using the previously mentioned guidance, we came up with the following actions:

1. Action: Promote the event at least 3 months prior to the event Through managing a well-planned campaign, the leadership team created awareness to give people plenty of time to make travel plans where necessary.This approach, along with a sequence of coordinated actions resulted in a much higher response rate and a healthy 40% increase in coin in on the high denomination slots which is where 80% of the slots revenue was coming from.

2. Action: create the right kind of incentives. On this occasion, two types of promotions were used:

• Players who achieved a minimal amount of ADT the day before the event were rewarded with a cash back incentive based on a % of their play which was redeemable the next day and only after the event had finished. This increased repeat visits in the casino by an impressive 45% over the 3 day period

• Players who redeemed their cashback after the event were automatically entered into a prize draw which took place the same evening. The added incentive contributed towards an even better that expected experience for both the customers and the management team resulting in player’s staying for longer and generating more revenues for the casino.

3. Action: Cross promotion: with so much to offer the leadership team agreed that this part of the strategy made perfect sense and came up with the following:

Qualifying customers were offered the VIP experience including meals at the hotels signature restaurant, free event tickets golf, spa, hotel stays and all carefully crafted to each player’s preferences. Not only did this enhance the Hotels reputation of being able to cater to VIP guests,it also increased their level of play, VIP visit frequencyincreased and there was an impressive growth in VIP numbers.Customer service ratings also saw a huge improvement for both the hotel and casino.

4. Action: The right kind of KPI’s. Before launching any marketing campaign it’s essential to first calculate how many, and what segment of player’s you need in the casino to pay for the marketing campaign and make a healthy profit.Otherwise, you could end up losing money as a result.Other essential KPI’s include results by customer segment, and customer service ratings. Working without KPI’s is like leaving your house without a destination and expecting to reach it! On this occasion the management agreed on the following KPI’s.

• ADT – Average daily theoretical. This is especially important for VIP player’s as sometimes making a profit means spending more which, in turn results in lower margins and a higher level of risk. On this occasion the volume of play was high which offset the risk so the weekend was a huge success.

• Results by segment – this allowed the leadership team to target, monitor and evaluate the promotion and use the data in real time to make faster and better informed decisions. It also provided valuable insight on the best way forward which is essential to define which areas need to be expanded upon.

• Customer service: On this occasion the Casino already had an effective system for training, monitoring, measuring and improving customer service. As a result, the customer service scores consistently performed above both industry and company standards.

Conclusion – Strategy isn’t a goal, or a mission statement and strategy isn’t a fixed target. Strategy is the application of strength against weakness and the first step toward applying that strength is to correctly define the key challenges standing between success and oblivion. Diagnosis is only a small part of strategy because to build on success and create new sources of advantage you also need guidance and action. When the three come together, truly remarkable results can be achieved and who knows, it might even make your boss happy!

Andrew Cosgrove is a seasoned slot operations veteran and certified project manager with over 24 years of hands on experience in Latin America and the Caribbean. Andrew has worked on both the operator and supplier side of casino slots and is available to help you succeed and exceed customer expectations via contracted consultancy services. Andrew can be reached at andy.cosgrove@henimgwaycasinoconsulting.com or seehttps://hemingwaycasinoconsulting.com/