Is Your Reinvestment Strategy Overboard?

Overboard Cracking Egg

You sank my battleship!


Uh oh, did you miss the mark when you planned your reinvestment strategy?


These questions comes up regularly:

What is the target reinvestment percentage for my marketing programs?
How much should I give away in Free Play?
Should I adjust the rate to which a player earns Comps?

The following is a flash back to a popular piece published by Raving about a different way to look at reinvestment percentages.

Battleship. Do you remember that game? My daughter now plays it on my iPhone. You blindly aim missiles at phantom targets. Submarines are the hardest to spot and need two direct hits to sink. Battleships are easier to hit due to their largesse.

Let’s assume that Coupon Redemption and a Trip are your measures of success in your casino’s version of Battleship. You throw incentives over the bow in the form of Free Play, Points, Comps, Player Development, and Promotions in order to hit your targets.
Each player only has so many Trips to give a market before their wallet runs dry. In competitive markets, who will win the next Trip?

Do we darken the skies with more incentives? Do we secretly recalculate our strategy to blindly make our marks without over-investing?

To my surprise, most properties blindly blast the market in search of Trips. They know what it costs to deploy their missiles, but they have no idea how the experience feels from the player’s perspective. What if you were able to turn the tables and see what’s on the other side of the board?

This is easy. This is imperative. This can be done quickly.

Plot three or four different player types:

  1. The High Frequency/Low ADT player
  2. The Low Frequency/High ADT player
  3. The Mid-Level Frequency/Mid ADT player
  4. The Seasonal Multi-Day player

Challenge yourself further by making all of the Total Monthly Theos the same. In effect, there are many ways to get $1,000 Total Monthly Theo. How does each path differ in the complete package of rewards that a player is programmatically set to receive?

Plot what each player type will receive in Points, Direct Mail, Comps, Promotions, Player Development, and Tiered Rewards over a period of time. The High Frequency/Low ADT player may not receive great Free Play offers in the mail, but do they receive a respectable number of Points that can be redeemed for valuable rewards? Can the Seasonal player redeem something during their three-day visit, or do you miss the mark by recognizing their play in the next month when they won’t be there?

Every time you are considering making a change in your reinvestment, go to this table and project how each player type will be affected. Turn the dials behind the scenes too often or too dramatically, and your players will lose trust in your program. Fail to communicate the value of your program and how the player can experience rewards using their complete package of incentives, and your competition will steal Trips from you.

Unlike Battleship, you have a variety of means to hit your targets.

  • Points are generally aimed at the High Frequency players who do not qualify for Direct Marketing incentives.
  • Free Play Coupons through Direct Mail are aimed at Low Frequency/High ADT players to incent an increase in frequency.

The test is whether the handoff between your Points, Direct Mail, and Player Development programs doesn’t leave big holes for players to fall through if they don’t meet your programmatic settings.

In all cases, it’s more important to strategically plan what your players will receive than to obsess over how you are going to deploy the incentives.