Do we need to operate in a constant state of emergency?
Oftentimes, our effectiveness as leaders and marketers is based upon a sustained state of emergency. What foe do we have to fight? What markets do we have to capture? What costs can we conquer? What profits can we maximize?
Is this heightened state of awareness helpful or hurtful?
In my curiosity, I googled the DEFCON system …
Defense Readiness Conditions, known as DEFCONs, are used by the Joint Chiefs of Staff and the Commanders of the Military to outline progressive states of readiness against military threats. As the threat stage amplifies towards nuclear war, the level counts down from 5 to 1. Though the United States has never declared a state of imminent nuclear war and reached a DEFCON 1 position of maximum readiness, the Cuban Missile Crisis in 1962 brought the country to DEFCON 2 with the Armed Forces ready to deploy and engage in less than six hours.
With that in mind, I rewrote what a DEFCON system might look like to manage the readiness of a casino against internal and external threats:
Let’s look at a few scenarios to evaluate what takes us to a heightened state of readiness. Our heightened state of anxiety urges us to layer reinvestment. How do we remain in a state of readiness? How do we not take ourselves up to DEFCON 1 every time we’re faced with uncertainty?
SCENARIO 1:
A casino is opening down the street.
The wolf is at your door. Are you a house made of straw, sticks, or stone? Do you …
- Panic?
- Mail more Free Play?
- Dress your management team in street clothes and obsess about seeing your players at the new joint?
- Leave a dead carp hidden behind one of the competition’s ATMs?
- All of the above?
Obsessing about the competition is not the answer.
If you feel like you must protect your business by buying it, then what have you built for yourself? I wouldn’t worry about a wolf blowing your house down. I’d worry about the customer smelling your desperation and your internal team imploding your ROI.
SCENARIO 2:
Your competitor is sending out Free Play like there is no tomorrow.
At this rate, there won’t be a tomorrow. Your market has turned from one based upon value and customer service to Kohl’s where everything is on sale. Do you …
- Spend hours in meetings grappling over upping your Free Play coupons from 15% to 20% of ADT?
- Deploy extra postcards, emails, and carrier pigeons to pummel your players with more offers?
- Relent and agree to send $1,000 Free Play coupons to your top players?
Direct Mail is not the answer.
This is not DEFCON 3.
SCENARIO 3:
A new vendor has introduced a technology that is poised to rock your world.
It slices, it dices, and it doles out offers in a way that George Jetson never dreamed. Your intellect will blossom with data visualization that is so revealing, it will make you blush. Your offers will be so tantalizing, your customers will drop everything and give you all their trips.
Tuesdays on your floor will look like Saturdays. Your costs will shrink, your profits will soar, and your customers will thank you. What will happen three months from now?
- You’ll still be installing.
- All the features you bought will not be fully functional because you don’t have the right version of CRM system, kind of customers, or data warehouse.
- Your initial results will glow, but subsequent returns will fizzle.
- The layered offers will give your CFO a coronary.
- The added information and knowledge won’t necessarily have the tactic to go with it, the utility to drive change, or the simplicity to make sense to the player.
Technology is wonderful. Well-deployed technology connected to tactics that make sense within your existing loyalty program is even better. Most ideas fail in deployment because the new technologies or programs are additive, not integrative.
SCENARIO 4:
Put all your eggs in the Hosts’ basket.
If you put all your eggs in the Hosts’ basket, all incremental revenue is dependent upon your best players. To court and retain your best customers you …
- Invite the same people to more parties.
- Start sending VIPs additional Free Play in the mail.
- Spend more money on food in your VIP Lounge.
- Arm wrestle your Hotel to increase your room block on weekends.
Player Development is not the answer to every growth expectation.
When faced with the new casino down the street:
Assess the strength of your structure. Is it made of straw or bricks? If you have been in business for twenty years, consider the customer base and the employee base that have stood with you over time. Those are strong bricks. Competition doesn’t have the tenured customer. Competition doesn’t have the historical data. Competition doesn›t have your employees.
When faced with the pressure to send out more offers:
This is a short-term means to buy the business. You can manipulate a player to respond to win a weekend, but what will it take to meet the numbers the following month? You can buy good redemption. But what will the customer say when the offers return to normal?
When faced with new technologies:
Does a new technology create a new path for added reinvestment? Or can it bridge the gap between existing touch points? Can it add to the conversation? Can it deepen engagement or lengthen the relationship?
When pressuring Player Development to be all things to your bottom line:
Consider leveraging your existing programs to support Host endeavors. Comps and additional Free Play will erode margins faster than incremental visits will fill your bucket. There is great potential at the top of your worth segmentation. However, the most powerful revenuegenerating section of your database resides in the upper middle. Spread your net wider to sustain and grow business.
Added offers, layered reinvestment, and Free Play are DEFCON 1 responses. Uncertainty in the marketplace is best met by leveraging the strengths of your existing loyalty program, connecting with your existing customer base, and celebrating the employees who bring the two together
