Inside Asian Gaming

INSIDE ASIAN GAMING | April 2009 36 MPEL Loyalty — The Big Picture There’s another picture of customer loyalty based on research that spans industries and countries and explores beyond what your casino can know about its customers by using your internal data E very casino wants loyal customers, but few casino customers are loyal. So each month casinos send mail offers to their players club data base, conduct some promotions and keep their fingers crossed. Oh, there’s a lot of math involved so it seems pretty scientific and research-oriented. Especially when you have a tiered club with different offers based on theoretical win and reinvestment ratios and return on investment and data base analysis. Yep, it sounds scientific and smart as hell when your marketing department starts throwing those kinds of figures around. That’s the small picture of customer loyalty—what’s happening in your casino based on win per unit, head counts, repeat visitation, direct-mail redemption patterns and maybe even exit surveys or focus groups. But there’s another and bigger picture of customer loyalty based on research that spans industries and countries and explores beyond what your casino can know about its customers by using your internal data. The umbrella topic is “consumer buying behavior,” and under that we find loyalty programs such as casino players clubs. While general consumer research on loyalty programs is plentiful, not a lot of academic research has focused on casinos, but some of the principles are the same whether you’re American Airlines or Harrah’s. First, it’s defining just what you mean by “loyalty”. The standard definition is repeat-buying behavior because repeat business means more money to the bottom line and more efficient use of marketing dollars. Research, however, has shown that loyalty actually consists of two distinct constructs—behavioral, which is the repeat- buying behavior, and attitudinal, which is the “commitment” factor. Behavioral loyalty means you have their business today, but if a casino opened closer to them they’d defect in a New York second. Attitudinal loyalty means you’ve really hooked the customers’ emotions. Research that measures loyalty typically looks at both sides. Ideally, we want customers who are not only repeat visitors but who tell others what a fun place we are, how friendly they’re treated, and how we’re their favorite place to go. That’s a loyal customer. Research also shows that some loyalty programs are successful while others fail, so it’s important to understand what motivates your customers. Several studies of airline frequent-flier programs reveal some interesting aspects that also apply to casino players clubs. A 2000 study conducted by Mary M. Long and Leon G. Schiffman and published in Journal of Consumer Marketing