Compelling Casino Loyalty Programs

Advances in information technology may have made casino "rewards programs" more pervasive, capable of tracking the greater mass of gamers outside the roped-off confines of high-stakes playing areas. But the packaging and implementation - the inducements offered to gamblers to play more or keep coming back - are at least as important. The best of these loyalty programs have evolved into campaigns far more sophisticated than the higher-profile efforts of airlines and credit card issuers.

The premiums or incentives still include comp rooms, food and drink. After all, what could be more appealing than a free stay with meals in Vegas, Macao, New Orleans or London? The difference is that loyalty programs allow gamers to upgrade their meals to something memorable and pricey - a $150 comp at Antonio's, Fiore, Buzio's at the Rio All-Suite Hotel-Casino, for example - rather than the mundane coffee shop buffet that run-of-the-mill players get.

Other fringe benefits help convince loyalty card holders that they are special. Invitations to events such as the World Series of Poker and slots tournaments are exclusive to program members. Earn enough points and a gamer gets playing privileges at the golf course in the casino resort complex. In marketing terms, this is called maximizing customer experience, value and satisfaction with premiums that really cost the casino virtually nothing beyond a little foregone revenue.

Consistent with the trappings of luxury and decadence a casino embodies, players can win themselves a trip on a private jet to anywhere they choose or attend a horse race named after them (in a race track the casino owns).

Still other rewards border on the lavish, inspire wonder and envy among gamers who do not qualify. Gamers can earn the right to ride a New Orleans Mardi Gras float, for example.

Behind this surfeit of incentives is a well-known fact: casino patrons are a diverse lot. Intensive analysis by the industry leader, Harrah's, has shown that one can identify as many as 90 different market or psychographic segments. And when one of the potentially heavy spenders is detected plugging into a slot machine or a card table, the casino can rapidly dangle special offers to get the gamer to spend his bankroll for the evening right there instead of strolling to a neighboring venue for variety's sake.

With other direct marketing tactics in the arsenal, Harrah's is satisfied that the casino rewards program did increase share of patrons' bankroll nearly 20% over a five-year span. This is no mean feat since hundreds of casinos on the U.S. mainland compete for the same pocketbook. At the same time, gross take from rewards card holders expanded at a 9% annual clip.

Finally, a marketing detail: the Rewards cards issued to players remained valid for only six months. This means that patrons have to return at least once more otherwise all point balances disappear into thin air. This is a pragmatic rule since, at the end of the day, repeat patronage is what all loyalty programs are about.

Player promotions can propel huge incremental revenue, significant enough to capitalize acquisition or new casino construction. In turn, being able to accumulate rewards points in every casino the chain owns effectively shuts out the competition and reinforces the loyalty program.

Ultimately, the success of any promotion, like rewards for casino players, rests on premium items, "comps", and incentives that are compelling to target patrons. And it is well worth incorporating really attractive inducements. If the experience of Harrah's is anything to go by, rewards programs are strategic. The steady growth of the chain to industry dominance has been attributed directly to effective gamer promotions.