Promoting a gaming site on Google is the most common strategy used by many website owners. There is no denial that this strategy works — and while you are expected to pay through your nose for this, the opportunity to market your online gaming website is huge. Yeah there is no way to do a online casino with out some bucks to back it. Even if you go 30k or 40k it would come back 10 times as long as you work it the right way but that is one business you need to have money to start. Even when they are up and going there are so many legal factors involved in it.

Just like its rivals for consumers’ disposable income, America’s $90-billion-a-year gaming and casino industry is significantly driven by database marketing. But gaming customers are very different in one major respect.

While adult patrons of a hit movie, for example, know they will spend about $8 to $10 on a ticket, perhaps buy soda and popcorn and then head home, some casino customers lose huge sums of money while a few others might actually make a profit, especially those who are skilled at games such as blackjack.

Can casino owners more accurately identify and predict which of their regular customers will lose the most money? How often will these customers visit? How will they allocate their bets among slots and tables? By targeting those players, can casinos follow up with a more effective direct marketing campaign?

The questions inspired two Wharton faculty members and a colleague at New York University’s Stern School of Business to see if they could develop a mathematical model to identify these most lucrative customers. The three researchers — marketing professors Raghuram Iyengar and Jehoshua Eliashberg, and Sam K. Hui, a marketing professor at Stern — say that the answer is an unqualified yes. Indeed, they wonder why casinos aren’t already using these tools.

The issue for casinos “is one of attracting their best customers,” said Iyengar, noting that most casinos and slots parlors already collect some types of extensive marketing data on their customers. “Our list overlaps somewhat with their list, but the lists are not identical.” The casinos are reaching out to their customers, “but they could be doing it better.”

The study by Iyengar, Eliashberg and Hui — entitled “A Model for Gamers’ Revenue in Casinos” — develops a mathematical model which integrates gamers’ frequency of casino visits, their total wagers and the distribution of those bets at table games versus slots machines. The researchers determined if revenue from specific players was derived from “skill” or “luck,” and they were able to identify players who are highly skilled or perhaps revenue-producing high rollers.

Avoiding ‘Unattractive Customers’

In addition, the team looked at ways that demographics could provide casino owners with valuable marketing insights. The data suggested, for example, that women devote more of their spending to slot machines than to table games like blackjack, and that men have a higher level of skill at the gaming tables than women. Iyengar and Eliashberg suggested that more useful information could have been gathered if they had been given more specific demographic data. “This information would really help [casinos] target more precisely the most attractive customers, because you certainly don’t want to target the unattractive customers,” Eliashberg said. “You want to spend your money where you get the most bang for your buck.”

While the characteristics they studied are fairly unique to the gaming industry, the authors said there are other business situations in which customers can be identified and targeted based on their specific skills or unusual customer behavior. For instance, they noted that better modeling of customer behavior might help hotel managers to more intelligently market the use of mini-bars or business centers, or allow car-rental firms to target extra-cost products like GPS units or satellite radios.

But it is the sheer size of the casino industry in the United States that makes it such a strong candidate for this kind of individualized predictive modeling, more commonly known as database marketing. Americans spend more money on gaming than on trips to the cinema by a 10-1 ratio, and more money is lost during a typical casino visit than is spent in an average visit to a mall. Of the $90 billion spent on legalized gaming, according to the American Gaming Association, some $59 billion is spent in casinos as opposed to lotteries or pari-mutuel wagering.

Unique aspects of the casino industry suggest that casino operators should be developing different tools for customer relationship management than, for example, mall operators — who analyze how much customers spend on a typical visit to a store and what products they purchased. Through the use of gaming loyalty cards and other tools, casino executives have the ability to more closely track the performance of individual gamers. Access to such player-level behavior, together with mathematical modeling, can help uncover a gambler’s level of skill — an important consideration in determining the individual targets of direct marketing campaigns.

“The use of mathematical models to predict future behavior is very important [because] the most recent profitable gamer is not necessarily going to remain [the] most profitable in the future,” Eliashberg said. “You have to look at the frequency of going to a casino in general and combine it with all sorts of aspects of wagering behavior. Does the customer wager more on slot machines or at the tables? You also have to look at the skill level. You need a model for human beings.”

Iyengar and Eliashberg noted that casinos already perform broad mathematical calculations — based on aggregate behavior — in an effort to predict their overall revenues and profits. The goal of this research, they said, was to come up with a mathematical model that would measure the difference between a typical player’s theoretical and real spending relative to the player’s skill level. The use of a “formal model, which makes clear distinctions among individual gamers,” is a more effective tool than a casino operator’s “judgment based on intuition,” Eliashberg stated.

‘Share of Wallet’

The data that researchers examined came from a major U.S. casino operator with gambling facilities in a number of U.S. locations. It provided the authors with detailed information — gathered through the use of loyalty cards — on more than 1,500 customers who made a total of about 9,000 casino visits from December 2004 through April 2007. The gaming company also offered age and gender information for about 400 of those customers.

To determine the skill of the players, the authors ran through a series of complex calculations based upon factors, including the particular games the individual played, the expected take by the casino versus the actual take, and whether a gambler’s winning or losing on one visit affected behavior on the next. While the researchers noted that more work must be done to learn how a gambler’s skill improves at a game, such as blackjack, over time, they believe their model can be a powerful starting point. For example, the authors predict that this new and more detailed type of data can be combined with customer survey results to obtain much better information on so-called “share of wallet” — that is, how much of the money that a gambler budgets for the casino is actually lost on a visit.

Beyond that, they also urge additional research on casino promotional activities — such as complimentary hotel stays or cash-back awards — in order to develop a better sense of how marketing efforts affect high and low revenue gamblers differently. In addition, they note that the customized data could help operators as they weigh how to better design their casino floor space to increase revenues, such as the use of environmental cues to encourage gambling or altering the ratio of table games to slot machines.

“The behavior may change from one facility to another, but we believe this information is helpful in designing your facility in line with customer behavior,” Eliashberg said. In future research, the authors note, they would like to examine more demographic data such as relationship status, home address, profession and education level to gain even more insights into gambling habits.

According to Iyengar, the research has implications in other industries. “A sales force manager could better understand how a person makes a sale,” Iyengar said. “It might make a difference if they could figure out whether it’s the product that’s selling or whether it’s the skill level of the sales person.”

Drumroll drawings. Tricked-out trucks. Cash tornadoes. Pulling off a successful casino promotion is harder than it may seem. Here are 15 tips, tricks, and ideas to get you there, without breaking the bank. (Unless, of course, Break the Bank is your promotion of choice.)

1. Start with planning.

Let’s start with the elephant in the room. It’s definitely more fun to think about what kind of game show briefcase you’ll use in that Deal-eo or No Deal-eo promo, or how the balloons will drop on the new car, but if your casino promotion idea is going to be successful, you need to set the fun aside and first ask yourself this: what, exactly, am I trying to do? Acquire new guests? Reward loyal guests? Increase guest spending? Increase visits? Once you settle on your goals, things get much easier.

A good marketing calendar has balance, a mixture of mass and targeted promotions. Sometimes the goal is to see a big bump in revenue; other times the goal is to boost a certain demographic or daypart. Targeted promotions can also elbow their way in front of the competition. (See #4.)

One other thing: Do not start with how much you should — or have to — spend. Expense should be planned in line with potential revenue, and you’re not going to know that until you define what you’re trying to achieve.

2. Determine how you’ll measure success.

You’ll need to know what “success” means in order to achieve it. This may sound like a “duh,” but it can get a bit tricky. Be sure to isolate your base business, as sometimes traffic isn’t driven by promotions. And in addition to traditional ROI calculations, you may want to check in on other less-obvious factors like customer satisfaction or conversion. Be sure to define how you’ll measure those in advance.

3. Know thy audience.

In order to know the right day, the right way to spread the word, the right briefcase for that game show promotion, get to know your audience as well as you possibly can. Because no matter how enticing you may think your promotion is, if your audience hasn’t heard, isn’t interested, or can’t come, you’re in for a flop.

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If, for example, drive time is short and your identified target audience isn’t employed full-time, you may be able to bump that 50% slot floor occupancy on a Tuesday. Or, your audience demographics may tell you the smartest day to make the biggest bang for your buck is Friday, even though the slot floor occupancy is already at 60%.

4. Keep your guests close and your competition closer.

The more you know about your competition, the better you can react or — better yet — act proactively. Keep an eye on competitive websites, Facebook pages, newsletters, and mailers. Identify timing and details on promotional events big and small, as well as competitive strengths, weaknesses, and potential impact on your business. And then act.

Say, for example, your competitor has their big monthly giveaway on a Saturday. Knowing your audience has limited discretionary income, you encourage they spend that money on the Friday preceding the giveaway with an enticing offer.

Technology makes competitive tactics crazy easy. Let’s say one of your high-spend customers is entering your competitor’s parking lot, headed to their Big Bucks promotion. You can send a real-time text that says, “Get over to our place in the next half hour and get a GUARANTEED 50 big bucks in FREE play.” Presto, guest-o. (Small Red Circle plug — we can help you get here. See #15.)

5. Know when enough is enough.

A promotional calendar that’s filled to the brim with exciting giveaways, gifts, and games will produce more profits than a calendar that has sporadic promotions, right?

Wrong.

A constant merry-go-round of promotions, and those ponies lose their luster. Guests are no longer excited. And, if you’re always in promo mode, how can you calculate the bump a particular promotion creates? When you spend money you can no longer measure, you stop being able to adjust, react, and improve your bottom line. Plus, if you’re not careful, those happy, excited guests become angry, entitled guests who wonder where their free meal is already.

When it comes to promotions, choose quality over quantity. Go back to the drawing board and remind yourself of your objectives. Evaluate if and when promotions fill those objectives, and get ahead of the game. Or the tournament. Or the drawing. You get the point.

6. Brand it.

If your promo name looks and sounds just like your competitor’s promo name, you just might have spent your money giving them business. Brand colors, typeface, name, tone, personality — make sure that promotion speaks to guests in your voice. And the more unmistakably yours, the better.

7. Limit time.

We are predictable, we humans, and we assign greater value to limited-time offers. From an old-fashioned circus barker’s “hurry, hurry, hurry” to today’s social media flash sales, time — or lack thereof — creates buzz. And buzz creates action.

Choosing the right start and end dates can have a big impact. Don’t run the promotion long enough, and your guests won’t have enough time to enter. Run it too long, and it loses its punch. Two to four weeks is usually the sweet spot, but it’s important to experiment with your particular casino audience.

8. Create a sense of mystery.

We know gamers index high for risk-taking behaviors. So, while many of us love a good mystery, your audience really loves a good mystery. Unlike a typical promotion, use mystery, and you use a lever to create excitement separate from the actual prize. Through an intriguing, mysterious challenge or adventure, your guests are more engaged and more motivated, which leads to higher participation.

Another benefit to using mystery in your promotions? Cost containment. While a guest might not come in if he or she knows, statistically, she’s likely to win a small bit of free play, that same guest may decide to visit if she’s guaranteed a “mystery” prize (that turns out to be that same free play).

9. Use theater.

These days, guests, hosts, staff, they’re all busy. What’s more, they’re bombarded with lots and lots and lots of messages. So if you want to capture attention, generate enthusiasm, and otherwise engage, go a little wild and bring out the theatrics. A stage, an announcer, music, dancing, balloons, game show drama, whatever it takes. Out of the ordinary — and that can include downright wacky — is the name of the memorability game. In addition to kick-butt promotion results, memorable experiences have the added benefits of building a positive brand, getting great word of mouth, and, ultimately, creating a bigger audience for your next promotion.

10. So who’s promoting this promotion?

The stakes are higher than you may think. If your crew buys in, understands, and is genuinely enthusiastic about a promotion, you just got yourself a lot of free PR. If, on the other hand, staff perceives taking part in the promotion as a chore — or they’re in the dark about the specifics — no amount of promotional ad spend will make up for what happens when your guests walk in the door.

Moral: Promote your promotion. Sell your staff. In fact, treat your staff as your customer. If you do a good job, they, in turn, will pass on that enthusiasm, help create buzz, and be walking examples of your brand.

11. Spread the word wisely.

If you’re encouraging participation in a mass promotion, it makes sense, of course, to buy mass media. If it’s a targeted promotion, though, think outside the box for ways to get your message directly to your target.

Or another way to think outside the box: What about turning a big mass promo into an acquisition strategy by taking a winning car — or another prize so cool your target audience just has to check it out — and showing it off outside your casino? State Fair? Local mall? Where are the customers you want to acquire?

12. Check goals against data.

After the promo, it’s time to dig into the data. Did the promotion create incremental revenue? Did you see a lift year over year? What type of players participated? Were expenses in line with revenue, or were they too high? Did the promotion attract new member signup on the day of the promotion? How was slot occupancy? Quickly get to the bottom of what worked and what didn’t, so you can process the whole picture while it’s fresh. If your data analysts are pulling manual reports, and getting your hands on data just isn’t going to happen quickly, it might be time to get some help.

13. Debrief already.

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The numbers are one thing, but there’s always more to the story. Within the week, while everything is still fresh, make sure to gather info from the people closest to the promotion. Ask what worked and what didn’t. How were the lines? The weather? The logistics? How was the wait for the valet? Get the customer experience story that rounds out the numbers.

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14. Present findings in a way that engages your audience.

Think about it. You just thoughtfully intrigued a target audience enough that you created a desired response. You now need to turn around and approach your managers, board, or tribal leadership the same way.

We’re guessing you have a small window of time in a room full of busy, sometimes impatient people. So get to what they care about right away: high level findings, recommendations, and an action plan. Keep it short and on-point. Create summary slides. And be prepared for those questions you know are coming.

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15. Get help if you need it.

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If your data analyst is pulling manual reports, and you’re not getting information for weeks, you can’t possibly gather great insight and react to that promotion in a timely or effective way. And if you have to analyze mail, email, and mobile communications separately, you’re probably sinking fast. How can you check goals against data across platforms, factor in guest experience, and recalibrate when you’re already well on your way with another promotion?

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You can say goodbye to the slow going and heavy lifting — without a big cha-ching out of your bottom line — with database marketing software that does the work for you. We happen to know just the one. It’s a database marketing software suite designed for casino marketers, by casino marketers, and it’s called RECON. This little genius projects your profit margin before your promotion even runs. RECON mines, schedules, and replicates across mail, email, and mobile. It’s easy so you save lots of time. And it’s affordable because you’ll be able to create and streamline more and more cost-effective programs. If you’d like more info about RECON, our proprietary database marketing software, click here or call Angel Suarez at 612-875-7131.