So you want to know how much to reinvest.
Let’s benchmark those answers using the Magic 8 Ball
So you want to know how much to reinvest.
You want a magic number.
I have a confession to make:
I am not a swami.
I do not have a swami license.
I am not swami certified.
I am more of a diplomat, a politician of the worst kind. If you ask me a certain type of question, I will answer as indirectly as possible.
In order to be helpful, I need to start carrying a Magic 8 Ball. Here are the top four questions that I get asked in hallways, at lunch, or while washing my hands in the restroom.
1. What is the best Point Reinvestment?
We agonize over our Coin-in to Point and Point to Free Play ratios. All I can say is that the emotion is at the machine. A player can gauge how much she earns during each session of play. From there it gets a little fuzzy. Most players don’t remember the redemption side when comparing casino benefits.
When it comes to Point Reinvestment … it is decidedly so.
2. What percentage of Theo should be used to set our Comp bucket?
The real question is, who do you want to benefit from the program? Are you looking for a tool for the Hosts to use to control and record their comp writing? Or do you plan for the player to comp themselves as they watch their balance grow? Determining the Comp bucket is usually the last reinvestment decision to be made and the first one to be amended when the property realizes it is in too deep. Most percentages will never give the low-end player a hot dog within a reasonable timeframe. Most percentages won’t cover multiple room nights at full retail for upper middle worth players. The answer is to aim low and do your homework. Be certain of who comps were meant to serve and make them work for that customer. Comps are a layered cost, so be sure the tool is used to drive frequency, spend and loyalty, not a trip to buy a case of soda at the gift shop.
When it comes to Comps … cannot predict now.
3. How many Points should be required per Tier?
Come up with a five-digit number or a six-digit number with lots of zeros. Helpful, right? The real answer lies in your database, not in some giant number that you pull from thin air. The first question to answer for yourself is how many Trips do you want a customer to make in order for them to be considered loyal? Is it a weekly visit? Is it twice-weekly? How long are you willing to ask a customer to consistently visit before you will recognize them: three months, six months, twelve months? Set these parameters and find three significant thresholds that mark where Count and Contribution noticeably change. These are the point values that should designate the number of tiers and where the earning requirements should be set. Quantitative homework is required. And remember, Tiers are not for the top customers; it’s the responsibility of the Hosts to spoil them. Tiers are a means to show recognition to larger audiences, whether they generate points across multiple visits or in large sums over fewer visits. Tiers should be an equalizer that recognizes a player’s wallet, irrespective of how they choose to spend it within a month.
When it comes to Tiers … you may rely on it.
4. How much is too much Free Play?
Free Play needs to be properly positioned in the mind of the customer. It’s a starting point. Position Free Play as free trial money that allows the player to play differently, choose wildly, and experiment. We are not in the business of buying visits or trumping our neighbors. Free Play needs a cutoff point to allow other marketing vehicles to influence behavior that is more relevant to the moment and to the player. Arm your Hosts with this phrase: “I don’t want to love you through the mailbox.”
When it comes to Free Play … without a doubt.
There are sixteen pat answers available to us. But I don’t think any of us would get a promotion or a raise if we based our decisions on the Magic 8 Ball.
We agonize over each reinvestment choice. The answers can’t be left to chance. There is data homework to do paired with your extensive knowledge of what motivates your players.
Until then, any benchmark questions may be met with … reply hazy.