Marketing experts boost
casino odds

Mar 25, 2003 6:00 AM

With casino revenue flattening, experts say good marketing is more essential than ever to the gaming industry.

"Marketing has control over supply and demand,’’ says Gary Border, president of Marketing Results Inc. of Henderson. "You have to explain what you deliver and you have to deliver what you explain."

Michael Cheshire, an executive with industry appraiser Tim Morse & Associates, agrees.

"There are certain chains that run better than others. And even though times will probably remain tough through 2003, several large companies have great upside potential, based on good past performance."

Cheshire wouldn’t name names, but Border cited a couple: Harrah’s and Jack Binion’s Horseshoe Entertainment Inc.

"Harrah’s took steps to insulate themselves. They recognized that by using their database to its potential, they could control behaviors,’’ Border told a gathering of gaming and real estate executives at the CB Richard Ellis Market Watch conference at the MGM Grand earlier this month.

Through aggressive management of its database, Harrah’s found that tracked play at its casinos rose 15 percent.

"Databases are far, far more than electronic mailing lists,’’ Border notes. "And by mining other company databases (airlines, for instance) you can uncover more players."

Border adds that it’s as important to track "defectors" as it is to lure new customers.

Horseshoe was able to turn around lackluster performance at the old Empress riverboats around Chicago by simply refocusing the marketing program.

"The place was full, but with the wrong people,’’ Border said. "[Binion] stepped back and looked at the advertising.’’

Where Empress put up cartoonish billboards depicting arithmetically incorrect day-glo dice, Binion recast the signs to make the pitch more realistic and appealing to serious gamblers.

The new ads showed a proper pair of tumbling dice on a subdued background, with the heading: "Baby Needs a New Pair of Shoes . . . may we suggest fine Italian leather?"

Higher-brow marketing was accompanied by improved customer service. As Steve Wynn has demonstrated on the Strip, attention to detail is crucial.

"The Number One customer complaint in Hammond was that players’ feet were sticking to the floor,’’ Border related. "So instead of employing the same old ineffective cleaning routine again and again, Binion’s new crew simply laid down carpet and fixed the problem.’’

Carlton Geer, director of CB Richard Ellis’ Global Gaming Group, lauded Harrah’s for developing state-of-the-art player tracking and rewards programs designed to weather economic storms coast to coast.

"They found that 82 percent of their revenue comes from 28 percent of their customers. That’s invaluable information,’’ he said.

No one knows that better than Richard Goeglein, former chief executive at the Aladdin.

Goeglein said the now-bankrupt property was "crippled" because it opened with no customer database.

"We did not have access to the old Aladdin hotel-casino gaming list. We had nobody,’’ he said.

Player data is more valuable than ever when the number of gaming positions in Clark County and Nevada has actually been falling. This suggests, as the Empress and Aladdin cases illustrated, that quality of play is every bit as important as quantity.

  According to recent state reports, Nevada experienced a 10,840-position decline since 2001, falling to 219,329 — a 4.7 percent decrease. Clark County fell 4.2 percent during the same period, from 168,028 positions to 160,906.

Analysts say room demand is likely to soften further as leisure travelers opt to hunker down at home during the coming Iraq war.

But with the help of more tightly focused marketing and acquisition strategies, Geer expects casinos to rebound. "Gaming operators continue to bet on Las Vegas, demonstrating their confidence in the future. From our perspective, betting on Las Vegas is a sure winner,’’ he said.