Be careful with burgeoning load of consumer data, casinos advised

Phil Levine

Wednesday, Sept. 22, 1999 | 12:04 p.m.

An abundance of high tech-generated customer information could prove to be both a blessing and a curse for casino marketing in the new millennium.

At a seminar examining future marketing strategies for the gaming sector, a panel of experts last week agreed new technology will enable casinos to gather more personal information on customers.

However, experts cautioned that in the next decade the method of using that information could dramatically affect casinos' bottom lines. The marketing seminar was part of the three-day World Gaming Conference at the Las Vegas Convention Center.

"The explosion of data allows us to know more, and better target, our customers," said Ginny Shanks, regional vice-president of marketing for Harrah's Entertainment Inc. "But we need to decide what information is of most (marketing) value. The new technology allows us to fine tune our marketing approach and thereby make our efforts more efficient."

However, a direct marketing expert warned that many consumers are wary about the corporate use of what they consider to be private information.

"Some consumers are afraid of technology and fear a violation of their privacy," said Karl Dentino, a principal with New Jersey-based Rosenfield & Dentino Direct Marketing. "Consumers want to feel as though they have control (over their private information). That's why I believe the gaming industry needs to develop a proactive privacy policy to reassure their customers."

As part of that initiative, casinos could emphasize the fact that they do not "rent out" customer data to third parties, Dentino said.

"Giving customers the option of where -- and what type of -- marketing information they receive would also give them a greater sense of control," he said. Jeff King, vice-president of marketing at Caesars Palace, said casinos must take into account customers' concerns before starting major marketing projects.

"Particularly in the higher-end sector of the industry, we have to be sensitive to (customer) concerns about issues such as telemarketing," King said. "For example, we sometimes send out invitations for special events, and follow those up with phone calls. Some of our guests have expressed concerns about receiving those calls, and we have to honor those concerns."

The panelists also agreed that an explosion of multi-media casino marketing options won't necessarily diminish the importance of print advertising.

"Print will always play an important role in marketing," said Dentino "The main reason for that is quite simply human behavior. On Friday afternoon, people are conditioned to pick up the paper and see what's happening in their town that weekend. That type of dynamic means that print will not go away any time soon."

Harrah's Shanks agreed, but said a recent Supreme Court decision allowing casinos to run ads showing "actual gaming action" changed the rules of the marketing game.

"It used to be that you would supplant TV ads with print ads because of the restrictions on the type of advertising you could broadcast," she said. "The Supreme Court ruling has changed that. You will still want to use print exposure as a tactical tool in local markets, but I do see somewhat of a slight decline of print use in more expensive, high-end image ads."

The panelists also agreed that retaining quality customers remains a key element of future success.

"It's eight times more expensive to attract new customers than it is to retain them," said Shanks. "And by the year 2001, it will be at least 10 times as expensive to find new customers as retain existing ones. And retention, as we see it, really begins with the third visit. It's that visit that puts you at the top of the loyalty curve."

Added Caesars' King: "One of the challenges in retaining customers has been the recent explosion of growth along the Strip. With so much more to see and do, actual gambling time has declined from an average of five hours a day to less than four. That's one reason I am sure you will see a continuing growth in the number of 'stay and play' programs rewarding customers for gambling where they lodge."