Your customers share their leisure spend at a range of venues, including yours. The objective is to ensure your customers spend more of their leisure wallet at your venue and not your competitors. Loyalty programs have fast become a key requirement to increase market share not only with your direct competitors but also in the retail market.
We are bombarded with a large amount of information available directly at our fingertips and yet there is still a tendency for us to guess what the patron really expects. With such a large amount of information it is often difficult to define what we should be looking for and how we use it.
There is an inclination for venues to solely focus on the premium players which follows the Pareto principle (also known as the 80/20 rule) where we focus 80% of our time on the 20% of customers. The competition to attract the “whale” has intensified and we are starting to see the wallet being shared across multiple venues and in order to maintain your market share, venues should not forget about their daily grinders.
I came across a recent phrase “Are we throwing the baby out with the bath water in our attempt to tier-orize our products” which rings loudly for most. Whilst tiered loyalty is common in today’s society (and not just in gaming venues) it is not just the information that is vital but how it is used. Loyalty systems can take the guess work out of marketing and if used correctly can in fact reduce your expenditure.
Further to this, we can start to track and monitor promotions indicating the age old argument relating to ROI (Return on Investment) and create a more succinct promotion that gives patrons what they expect and also venues the ability to measure the effectiveness.
So before creating a loyalty program and aligning too much with one tier, there are some key questions which need to be asked:
- How often are you going to evaluate tiers?
- Do you have exceptions in place for promotion and demotion?
- Do you set tier ratios and how often are they reviewed?
Whilst we don’t err from the fact that 80% of revenue may come from 20% of the membership, we also understand that VIP’s don’t wish to play in empty houses. It is therefore essential that we don’t forget about the daily grinders and also seek to understand their key requirements and expectations.
One way to harvest excitement from the daily grinders is through promotions and it is this group who are usually the biggest advocates. Once these promotions are created, it is vital we gather the data and analyse accordingly. Whilst the spend levels may not be in line with the VIP players, the excitement and atmosphere make up for this.
At the end of the day it comes down to one major component; Increased Visitation. It’s not about having the patron spend more money, it’s about having them spend more with you rather than your competitor or getting a bigger piece of your customer’s wallet.