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Casino marketing's new secret weapon: Digital and social media15 September 2012By Joseph Guiste John Romero, a 45-year crusader and pioneer of casino marketing, taught us that direct marketing to the player is by far the most effective way to drive revenue. At the core, direct marketing is about engaging the player with an offer based on their level of play using some internal metric to determine an appropriate reinvestment. Romero's preference for extensive dialog in letter form over flashy brochures is legendary. Today most casinos use direct marketing extensively. In fact, the war of attrition for player acquisition and wallet share takes place in the mail box. Casino direct mail marketing today is much more of a challenge. Player loyalty rates are low because players are playing the field. The economic slowdown has compounded the problem. Players' gaming budgets are down, and value for money is the name of the game. So how does a casino get the edge and win at that moment of truth when the player is deciding where to go? The typical player in a local market will have many offers from various casinos in their hand at decision-making time. Why you? Why will you be chosen over neighboring casinos and what can you do to increase your chances of getting the nod? JD Powers and Associates study of California casinos: 6 percent of players express loyalty to one casino Have you noticed the line at the gas stations where gas prices are a few cents less than a neighboring gas station? People will drive miles to get gas for a few cents less. If you think about it, is it really a savings? Well as long as it is perceived as one then it is, even it is not. Trying to get the nod from the player by constantly striving to be that station that sells gas for a few cents less has unleashed so many free-play offerings that it has grossly affected the bottom lines of casinos. While there is still debate over free play's true effect on profitability, suffice it to say that smaller wallets sizes plus the use of excessive free play has accelerated the decline of casino profit margin. So what then is the long-term solution to give the gaming industry the best chance at a return to previous levels of growth and profitability? Many executives think those days are over, and it may be as an industry-wide phenomena. But a clever integration of digital and social media could bring those results to individual casinos, as we not only compete against each other for players, but also against every other form of entertainment. If your casino is a player's first choice you get at most 55 percent of their budget Very few industries have databases as developed as we do in the gaming industry. This is a luxury that gives the casino industry a leg up and is the envy of many industries. The casino industry, however, has been slow to embrace digital and social media partly because it has had so much success with direct mail marketing. I am not suggesting that direct mail is beyond its years, but I think it is time to inject new talent into our marketing mix. 56 percent of consumers say that they are more likely to recommend a brand after becoming Facebook fan The way we communicate is changing rapidly. Witness the decline in newspaper readership and the surge of online blogs, info graphics and online news. The digital age is rapidly upon us. When a very good friend of mine who is a professor in a very reputable university in San Diego sent me a text which read “J r u ok” I realized that digital communication has not only gone mainstream but that even the leaders of our bastions of knowledge have embraced it. They too have been forced to adopt digital linguistics and embrace the omnipresence of digital media. It was very difficult after that to ask my daughter to communicate with me in full sentences whenever she sends me a text. I also realized that I too was fighting the inevitable. Although as a marketing director I embraced aspects of digital and social media I had no idea at the time the power of the medium. Over 80 percent of your players have e-mail Let me state here that that digital and social media are not strategies. They are tools that provide us with the means to our players when used correctly. Digital and social media derives its power from two-way communication. It is difficult to talk to the TV set, or the newspaper or the radio at home. Sadly the TV, newspaper or radio cannot hear us, so we live with our frustrations, and problems never get resolved. Also according to Neilson research, trust in paid traditional media, including television, magazine and newspaper ads has steadily declined since 2009. Trust in television is down 24 percent, magazines down 20 percent, newspapers down 25 percent and 73 percent of consumers believe other consumers care more about their opinions than companies do. In contrast, with digital and social media, consumers have a voice. They can respond to your e-mail and texts and can post messages on your Facebook page. Plus, they share everything with their friends. That helps brands refine their offering by getting thumbs up or thumbs down on every bit of communication, offering, events, promotions, etc. Within one hour a casino can know the pulse of their players as it relates to a piece of communication. Players can make their voices heard and smart marketers will be glued to those voice because marketing is an outside-in process, not an inside-out one. 50 percent of your players will be on Facebook before the day is up Very few casinos today do not have a Facebook page. Most, however have let their pages stagnate. Setting up a Facebook page is inning number one in a nine-inning game. A number of casinos have started to collect digital data on their players. They have a few thousand e-mail addresses and cell phone number. That is a great start; the next few years must be used to get 50 percent of your active players to engage with you on Facebook and get the e-mail addresses and cell phone numbers of 70-80 percent of your active players. We need to treat player digital and social media data acquisition with the same fervor that we used to get mailing addresses into our database. E-mail, cell phones and Facebook profiles are where an increasing number of players "reside." When I first got my Blackberry and was able to sync my e-mails to the Blackberry, I thought I had died and gone to heaven. No more fighting with IT for access, and more importantly, no more anxiety after a day off, thinking of the volume of e-mails I would have to reply to upon my return. I was fully aware of what was going on, I was able to reply (with brief responses of course) to a number of my e-mails and those that required more detailed responses, I had time to think about. 88 percent of people check their e-mail on a mobile device daily The major objection I hear from casinos is, "Our players are older and we are not sure if they can text or use e-mail or have a Facebook page." Here are some stats that will excite you. According to a recent Pew survey, 33 percent of the 65+ use social media mainly Facebook, up from 9 percent in 2009. This is expected to grow significantly in the next few years. Also, over 70 percent of seniors own a cell phone and over 90 percent have e-mail. There is a critical mass of users in the core demographic of most casinos to make a digital and social media strategy imperative. One clear value of digital and social media is the “cost of contact”. Direct first-class mail is 45 cents; an e-mail costs between .0006 cents and 2 cents, and text messages at bulk are 3-5 cents. I recommend spending 20-30 percent of your marketing budget on digital and social media. I remember spending over $100,000 a month in TV, radio and print. Interestingly enough I did a survey of all my new players club signups over a period of three months, and over 90 percent of the respondents said they were persuaded to visit the property by a friend. Research show that people are increasingly making buying decisions based on their friends' recommendations and those of complete strangers who write online reviews. According to Neilson, 92 percent of respondents in 56 different countries said they trust word-of-mouth recommendation from their friends and family above all other forms of communication. 93 percent of text messages are read in the first 3 minutes The first step in developing a social media program is building a digital community. Your goal is to have an e-mail address and a cell phone number for all your active players and to have them become fans on Facebook and follow you on Twitter. There are a number of other social media platforms but we will focus on the main ones. Collecting digital data on your players can be done in a number of ways, but the biggest challenge is building a social media community. This requires expertise that is not always available in a most casino marketing departments. Building a social media community takes time and, because your social media fans have the ability to communicate with you directly and frequently, you want to make sure that the voices you hear are your players. Twenty thousand Facebook fans who are actual players are much more valuable to you than 50,000 fans that have a casual interest. Casinos may find it makes sense to work with a social media marketing groups with experience in the gaming industry to help grow their community. It is difficult enough for social media marketing companies to keep up with the speed at which social media marketing is evolving; for a casino without a specialist in the field it will be a challenge to build your community to critical mass. The average visit time on Facebook is 20 minutes What digital and social media gives the casino is the opportunity to engage regularly with players. It is permission marketing; these players have given you the permission to talk to them daily, unlike going to your website only when they need information from the casino. Not only will your message be seen by your players but if cleverly done you can encourage your players to share content with their friends, and the average Facebook user has 130, with many having hundreds more. Direct mail + e-mail + a text reminder significantly increases ROI In conclusion casinos will do well to embrace digital and social media as part of their marketing mix. If your casino has daily communication with your players, and those players have been sharing what they do and don't like about your casino and you have taken the time to respond and make the adjustment to enhance the players' experience, you have increased your chances of getting the nod when the player is making a decision where to spend their entertainment dollars. With a strong digital and social media engagement, players will feel integrated into your brand because they have helped create who you are. Your property will become their property, a place where the players have a voice in how their money is spent, a place where they belong, a place where they feel good about spending their entertainment dollars. Joseph Guiste is a senior marketing strategist for Imagine This. For information on how to leverage the power of digital and social media to compliment your direct mail efforts and increase ROI contact Joseph at 858-531-5271 or joseph@promogiant.com |