Focus on players club
Players clubs are the heartbeat of casinos. Their greatest value is the ability to identify unique guests and to measure and understand their individual behaviors. To have a successful players club, make sure that there is alignment between your guest and the loyalty program, e.g. the program supports the guest experience and not the other way around.
The basic benefits of using a loyalty program to obtain guest information are:
Growth: Acquire new guests, increase the spending of existing guests
Retention: Improve the natural churn rate of guests
These loyalty program benefits form the basis for all loyalty program initiatives.
To find the money in your players club, you must review your current program. There are four phases to walk through when reviewing your loyalty program:
- Program review
- Analysis and testing
- Leverage your analysis
- Guest management
Program review can encompass a lot of steps. The key here is to review your strategy. Some examples of program review are: complete a SWOT analysis, review guest feedback, create a guest journey map based on a few key segments of your guests and look at your current communication methods. Once you have completed and documented the program review, the next step is analysis and testing.
Analysis and testing
Some of the key analysis to complete would be the worth segmentation and frequency segmentation bell curves. This allows you to easily see how your cohorts break out in your database. Below is an example of a worth segmentation curve.
Worth segmentation allows us to understand the spread of spend across the database in a visual representation. The chart allows us to quickly see how we should be communicating to our guests and who that message should be coming from.
Frequency segmentation allows us to understand the spread of visitation across the database in a visual representation. The frequency chart allows us to quickly see the definition of high and low frequency at the casino and identify which segments benefit from driving incremental visits and which segments may have discounted trips.
Guest potential analysis gives insight about where there is opportunity to increase revenue through growth. This includes analysis that shows low frequency guests who are local or new guests recently signed up who have not come back within a certain time period.
Leverage your analysis
Now that you have information, put a strategy into place to execute on the learnings from the analysis. Start with tier alignment. Make sure that the tier levels at the casino line up with the cohorts on the graph created during the analysis stage. There should be a tier change for each of the cohorts. Is it too hard or too easy to move up a tier? Once you have reviewed the tiers, you may come to the conclusion that how guests earn tiers needs to be re-evaluated, or the results may show that the tiers are set up well. Other analysis shows the guests with potential. What would you do to drive a trip or increase spend from these guests?
The final and very important piece to a players club program review is guest management. Make sure that you develop a guest management plan. The plan should include how you differentiate your guest cohorts. Loyalty programs need to be designed with more targeted rewards; they need to communicate differently with different groups of members based on their value; and they need to provide greater value at higher guest value tiers, by rewarding best guests to encourage higher spending levels. Inherent in the tier levels of your program is the idea of recognition: “I’m a Gold guest.” Guests wear their recognition badge with honor. After all, it says that “I am important.” With each loyalty tier comes increased recognition. That recognition can be very tangible, e.g. bonus points, or intangible, e.g. special entrances or lines. Don’t underestimate guest recognition. What are you doing to address your guests’ cravings for recognition?
Some ways to analyze your guest management is through your churn rate, guest retention rate and negative churn. Why should you care about churn? Reducing churn can increase profits anywhere from 25 to 100 percent. We all know that keeping your guests is significantly cheaper than the acquisition of new guests.
How is your churn? Do you need to focus on retention? Take these questions and build out a strategy to test changes. Make sure to measure your tests so that you know what works best.
The key to making your players club work is understanding your guests and improving how you provide value to them. To take it back to the beginning, make sure that your players club supports the guest experience and not the other way around.