by Paul Gordon
It might seem obvious that one size does not fit all when it comes to player loyalty, but many casinos continue to use a shotgun approach rather than a targeted strategy for rewards. The top tier players are always focused on, but within the general population of players, often there is too much generalization.
In casino gaming and online platforms, loyalty strategies must be segmented and strategically concentrated to maximize ROI and long-term value. Driving play for existing customers and initiating trial for new customers is the goal.
Segmentation means dividing players into meaningful groups and tailoring offers accordingly. The segmentation should be done with different strategies. A well-designed loyalty strategy should:
- Increase retention among all players.
- Improve player lifetime value. There are many more options to play, so creating long-term loyalty requires a strategic plan.
- Enhance player satisfaction to make players brand ambassadors for their casino of choice. And with the keyboard warriors that relish in posting negative comments, have a loyalty program that is viewed as very positive and fair. Get the word out.
- Drive increased play and foot traffic, which is the primary goal.
The 80/20 Principle
In most gaming businesses 20% of players generate 70–80% of revenue. Casinos do an excellent job of allocating resources to this group of players. They want to feel important to the casino and have a sense of inclusion at the highest level. Brands such as Jacob & Co, Gucci, SMEG and Rolex are top tier unique brands to this group, but also core brands such as Apple, Callaway and Tumi fill lifestyle needs.
What Motivates and Drives the 80% of the Players that Fall Into a General Bucket?
To build the segmentation and concentration strategy, casino operators need to constantly assess the rapidly changing demographics, their interests and play. The desires within each group are very different.
Look at today’s player profile. Casino gaming demographics are becoming:
- Younger (due to mobile app attachment)
- More gender-balanced (women are increasing their play)
- More digitally driven (everyone is attached to their phone)
- More globally diversified (access to information and travel has created a more sophisticated player)
Age Demographics
21–34 Years (Young Adults / Millennials & Gen Z)
- Prefer online casinos and mobile gaming
- Strong interest in live dealer games and fast-paced slots
- Influenced by social media and gamification
- Lower average spend, but higher digital engagement
At a recent UFC fight, it was fascinating to watch online betting taking place among this demographic. In talking with some of the people seated nearby, they were not loyal to any particular online site but driven by promotions. Understanding what rewards are most effective is to have your finger on the pulse of emerging trends and influencers. This is the fastest moving target.
35–54 Years (Core Revenue Segment)
- Highest participation in both land-based and online casinos
- Prefer slots, table games, and sports betting
- Moderate to high disposable income
- Strong loyalty program participation
Casino operators understand this demographic well and the shift to offering diverse property options, wellness offerings and entertainment is a huge draw. This group is motivated by more practical brands as they have family needs. They are driven by need more than desire for product rewards. Everything from products for children (Baby Bjorn, Melissa and Doug) to household items (Cuisinart, Big Green Egg) may satisfy this player. Loyalty and longevity go hand in hand for this demographic, and they represent tremendous long-term allegiance.
55+ Years (Traditional Segment)
- More likely to visit land-based casinos
- Prefer slot machines and traditional table games
- Higher visit frequency in physical casinos
- Value customer service and comfort amenities
This demographic has the most discretionary income and has grown up through the expansion of gaming throughout the U.S. and appreciates the history of Las Vegas and Atlantic City, regardless of where they live. Gaming was a destination for them. The 55+ crowd was viewed as the demographic taking the buses to Atlantic City with a cup of quarters for the slots. That has since changed dramatically. The Boomers are very active, technically savvy and energized. A very diverse selection of brands across all categories appeals to this group.
Player Loyalty Redemptions
The key factor for all demographics is choice in player loyalty redemptions. Just as quickly as the demographics shift, so too do the desirability of the brands and their SKUs due to a shortened lifecycle.
Having a robust online player loyalty program that is interactive, like popular shopping sites, will keep the players engaged and informed. The loyalty site should be embedded into the casino site and be another vehicle to communicate casino activities.
Paul Gordon is Senior Vice President of Sales at Rymax. He can be reached bycalling (973) 582-3272 or email [email protected].
