Direct-mail marketing called crucial to casino success

John Wilen

Monday, Dec. 14, 1998 | 11:39 a.m.

That personal-looking letter you just got in the mail could be a casino marketing pitch, especially if the sender is a devotee of casino marketing expert John Romero.

Romero, an author and columnist with 38 years of experience in casino marketing, counsels casino executives to stay on top of their customer databases and to use effective direct mail -- his favorite technique is the typed, stamped envelope -- if they want to keep their existing customers.

Speaking at a recent Casino Management Association seminar, Romero claimed that direct mail marketing is part of the reason the casino industry is growing so fast.

"The gaming industry is about to swallow America whole, and we owe that growth to direct mail," said Romero.

A well-maintained customer database and effective direct mail marketing campaign are two of a casino executive's best friends, said Romero.

But make a mistake with either one and your casino stands to miss important opportunities to attract new and repeat customers. This is especially important at a time when casinos face more competition than ever, Romero said.

"Where would many casinos be today without all those friendships they'd cultivated through the mail?" asked Romero.

Casino databases have come a long way from the early days, which Romero places in the mid-1980s. In 1985, Romero was hired by the Lady Luck hotel-casino -- his first consulting job.

When Romero asked about the Lady Luck's customer database, the general manager came out with a shoe box filled with 3x5 index cards, said Romero. Today, most casinos have computerized databases, but many still don't know how to use them, Romero said.

There are two kinds of bad databases, he said. The passive database receives little management attention, and is rarely inspected or fed. Casinos with a passive database pretty much use it only when they want to increase business. It languishes forgotten the rest of the time.

On the other end of the spectrum is what Romero calls the gross database - a database with too many entries but not enough information. Casinos with a gross database find they need to send 30,000 mailings to get a few hundred responses, he said.

The best database is one that is well-maintained, meaning information is regularly added and deleted when it becomes obsolete. The best way to use a database is to mine it for information that will help a casino reach its objectives, Romero said.

"A smart casino takes a careful look at the type of information that lies hidden in their database before they mail," said Romero.

For instance, casinos may want to target customers who typically spend more when they visit. For a slot tournament promotion mailing, a casino may want to exclude customers who primarily play tables or avoid gaming altogether. Far too many casinos simply send mailings to everyone in their database, increasing mailing costs but not increasing response, Romero said.

While the database is the heart of the marketing process, the form a casino's mailing takes is even more important, Romero said. Most customers say they switch casinos for "no special reason," he said. That makes the building of personal relationships vital.

"The format of your offer ... becomes very important," said Romero.

Personal-looking letters achieve a variety of casino goals, said Romero. They don't look like junk mail, so more people open them. Mail that looks like an ad goes straight into the trash, he said.

Personal letters are also cheap and easy -- anyone can buy envelopes and stamps. And personal letters give their recipients the illusion they are important to the casino personally, said Romero.

"With personal letters as a sales tactic, your mail does double duty," said Romero.

However, Romero does not argue that personal letters are the only effective method of direct mail advertising casinos should use. A variety of other techniques, including postcards and Publisher's Clearinghouse-style envelopes with lots of "personal involvement" items also work, he said.

The content of direct mail is also important, said Romero. Personal letters should be written like letters, not ads. And the postscript is probably the most important part of any ad, Romero said. The postscript is the most-read part of any direct mail promotion, he said.

Direct mailers should resist the urge to trick recipients with envelopes that say things like "Urgent - Open Immediately," or "Credit Report Release Form."

"No one likes to be tricked," said Romero. "You don't make a lot of friends that way."

In an interview after his presentation, Romero disputed claims made by anti-gambling activists at the recent National Gambling Impact Study Commission hearings in Las Vegas. At the hearings, one speaker, Edward Atchison, of the Las Vegas VA Medical Center outpatient clinic, called casino marketing techniques blatantly deceptive.

"I've haven't found any of these things myself," said Romero. "I don't know of anybody in the casino business being blatantly deceptive."

The fastest way for a casino to go out of business, said Romero, is to lie to its customers.