October 28, 2013
Late Breaking News, Compelling Ideas, Just
Plain Good Stuff for the Gaming Industry!
Submitting to a price war is
a lazy response!
Don't give up on developing a unique
selling proposition for your property.
By Guest Contributor Nicole Barker, Raving Partner, Database
and Loyalty Marketing
Gulp. Your customers only care about price. The provider who
can sell the highest volume or operate on the thinnest margin
wins. Your General Manager says to win back market share at
all costs. Your CFO says no.
Are you in a price war?
If you answer "yes" to any of the questions below, you may be
in a price war.
1. Are there multiple casino entertainment options within a day's drive of your
players?
2. Is your overall monthly trip count falling faster than your count of active monthly
players?
3. Is the pressure increasing to up your monthly free play coupons?
4. Is the pressure increasing to offer more point multiplier days?
5. Is the pressure increasing to lower your tier requirements or shorten the time
frame within which a player earns the next tier?
6. Is the pressure increasing to give bigger prizes in your monthly drawings?
Offering more in order to win back market share doesn't work. Over the course of the
economic downturn, you have decreased your costs to protect your margins in a
shrinking market. Now that you are operationally efficient, the market has yet to
recover and your revenues have yet to improve. How do you grow? How do you
maintain year-over-year revenue targets? Further discounting your core product by
offering more free play, more points, and more prizes will only make you suffer more
in the short-term. You are not Wal-Mart. You do not have the purchasing power to
shut down the competition with sustained discounting.
Price wars can make a marketer do crazy things. You can test larger free play
coupons on select audiences. You can blow your brains out with a calendar of point
multiplier days. You can wow the public relations universe by giving away a plane.
Enjoy your month of frenzied spending and plan a long vacation, because you don't
want to be around for the month that follows.
Here's the paradox. Do not ignore your customers. But, do not give them exactly
what they ask for. Do not give your players more for the sake of looking more
generous than your neighboring casinos. Players will take more and love you less.
How do you address a price war? Refuse to compete on price, or rather, stop
trumping your neighbor's discounts with larger entreaties of your own.
Here's a mantra for 2014:
1. You are not a commodity.
Simply said, the coming year is the year of slot marketing. Together, marketing and
slots need to define a selection of player profiles to pinpoint the play patterns, the
play preferences, and the preferred game types of the surrounding marketplace.
Together, the two departments need to decide on what the property does well. Does
it provide new games faster than the rest? Does it specialize in a wide selection of
game types or a deep inventory of local favorites? Does the property commit faster
than the competition to rolling out new technologies that make the player experience
more efficient or more fun? It is a marketer's job to make it clear why your selection
of gaming is better than neighboring casinos. There are way too many variables that
make the delivery of the gaming experience unique to throw up your hands and
resign yourself to selling a commodity and competing on price.
2. Brand equity is equal to brand promises made, divided by brand promises
kept over time.
Randall Rozin of Dow Corning Corporation recently published an article about this
subject. If you were to honestly audit your brand, what would it tell you about your
company? Do you fulfill the experience pictured in your brochures and presented on
your website? What kind of experience do you offer a guest? Do your employees
know what you are trying to achieve? Do they know the specific actions that they
need to take on a daily basis to deliver your kind of player experience? Branding is
not only about what you say about yourself, but it is also about what you do.
Branding helps a company make better choices about how it delivers products and
services. A solid brand promise is deployable. A strong brand promise is evident to
the customer. Think about it. Be specific. This is not the time to go generic. The
value of a player's gaming dollar is at stake. If you don't deliver value, players will
only visit when they have coupons to redeem.
3. Do at least one thing really well.
The equitable basket of rewards is the toughest sell. If you have a measured
reinvestment in points, tiered card rewards, free play, and promotions, then you are
a nice place to visit. Following industry standards is a commitment to an average
product and an average experience. Do you have the points crazy casino down the
street? Do you have a neighbor with an entertainment calendar with the biggest
names? Does it boggle your mind when you see the coupon reinvestment from the
"other" casino? You can't be all things to all players. If you're willing to risk it, carve
out reinvestment to deliver heavily in one area. Specializing in one type of reward
makes it easier to make an impression. Or, perhaps your delivery of your rewards is
the most efficient, the most relevant, or the most friendly in town.
4. Position aggressively against the basket of benefits down the street.
Few properties make the effort to sell their basket of rewards fully: nor do they
position their basket of goods effectively. Don't let your loyalty program be a
commodity to the customer. Sell what makes your program special. Have bells and
whistles that resonate. Arm your frontline staff with answers to player objections. If a
club rep hears a complaint about larger free play coupons from your competitor,
have them ask the player if they enjoyed the latest promotion at your casino. Sell
what you already have. Make what you give worth talking about. It's not about more.
It's about better -- better positioned, better sold, better deployed.
Submitting to a price war is a lazy response; it's a way of giving up on developing a
unique selling proposition for your property and delivering it flawlessly to the
customer. In 2014, you can name that tune in as many notes as you want as long as
you connect with the customer in a way that makes them forget to shop you like a
box of cereal.
The Raving Flash! Report is compiled weekly by Christine Faria, Raving's VP of Operations & Communications, and is designed to be a
"quick read" covering everything from interesting casino promotions to gaming news. See our archived reports and newsletters by
clicking here. Got an interesting promotion or news item? Contact Chris at 775-329-7864.