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Indian Gaming November 2006
Customer loyalty? Does it really exist in the casino
industry today or are we just buying loyalty? The
casino industry has changed dramatically over recent years
as competition increased. Casino executives tend to view
many programs with an eye towards developing customer
loyalty and consultants tend to look at programs from the
view point of loyalty versus profitability and how to
balance both. In the real world this is called “optimizing”
the process for maximum profitability and maximum
customer loyalty. Most of these loyalty programs now
target slot players due to the fact that it is easier for the
casino to more accurately track the slot customers play via
their player's club card in conjunction with the software used
with their slot player tracking program.
However, this is not a simple, clear cut analysis and
casino management needs to very carefully evaluate many
different variable factors. In other words, you need to
understand the math. Slot marketing programs are actually
quite interesting because there are so many different moti-
vators available to choose from. Nevertheless, they are all
predicated upon rebating a pre-specified percentage of the
slot handle or coin in back to the slot customer in one form
of incentive or another. In some cases, the slot customer
plays for casino comps such as free room, free food or free
shows. In other cases, the player earns points based upon
coin into the slot machine. The points can then be redeemed
or used at the casino for purchasing services such as rooms,
food, beverage, entertainment, spa and salon or in some
instances even for retail purchases. These points (1 point
normally equals $1) normally cannot be used for gaming.
A second version of the program allows the points to be con-
verted back into cash called “cash back” which is returned
to the patron in the form of currency or cash. And a third
version allows the points to be converted into cash in the
form of “cash rewards” but with the restriction that the given
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