Microsoft CRM. Analytics Drives Gaming Industry CRM. Niten Malik

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1 Microsoft CRM Analytics Drives Gaming Industry CRM Niten Malik If you think about the typical guest in a modern casino property, there really isn t any such thing. Some are there for dining, some for entertainment, some for shopping and some for the gaming. A typical casino patron s preferences are changing. This poses a unique challenge for casino marketing management. In an effort to improve the overall customer experience, customer tracking and loyalty systems in a diverse environment like a casino have to aggregate employee activity that touches a customer throughout the casino property. It has to offer appropriate level and type of service to each type of customer. One major hurdle is that most gaming systems don t interface with any non-gaming systems used in the hotel. Harrah s casino in Las Vegas, Nevada famously pioneered Business Intelligence and Customer Relationship Management systems for the gaming industry, but it took nearly a decade and an investment of more than $100 million. The goal, especially for local and regional casinos is to use analytics and CRM to drive profitability more efficiently and at a far lower cost. Marketing strategies aimed at retaining current customers and driving new ones rely on the casino s knowledge of both gaming and non-gaming customer spending patterns and preferences. It s not enough to understand only the gambling patterns of a customer. That customer s spending on non-gaming amenities are an increasingly important revenue stream for a casino property. For many casinos, non-gaming revenues represent significant opportunity to grow the bottom line. Las Vegas, for example, now derives 35 percent of its revenues from gaming and 65 percent from nongaming sources. Outstanding gaming floor experience alone may not get the customer to return. Non-gaming amenities, from spas and fine dining to shows and retail, are a growing profit center and target customers who don t gamble and may be a significant driver even for those who do. Even though there is more than one customer type that visits a casino, most still allocate a disproportionate amount of marketing budget to the top ten to twenty percent of the gaming customers. While casinos do have to carefully manage this revenue base, it is also imperative that the casino knows how to reward the non-gaming customers and understands their preferences and their contribution to the value equation. The demographics of a customer also play a key role in understanding the spending potential. Rewards that reflect what a customer wants have a much greater perceived value in the mind of the customer. Moreover, the casino has to have the ability to weigh the cost of attracting and retaining each customer type versus the revenue it is able to generate. Moreover, the average players will need to be afforded the same level of attention as the high rollers to move them up to the higher tier of players club. When the average player feels like a highroller they will return more often and spend more. This high-touch service is also costly. For it to make economic sense it has to be delivered to an average player at a much lower cost. This is the massive challenge facing modern casino management -- reducing the cost of managing top tier gaming customers, while broadening the customer base to reduce risk of revenue erosion

2 when top tier customers leave. This combination requires flexible CRM technology backed up by cutting edge business processes. Competing for Advantage A casino or any multifaceted environment will be slower to meet customer needs or meet them at a much higher cost if their CRM platform is not easily adaptable. When the development of new automated processes is time consuming and complex, it results in costly and manual high-touch marketing tasks. Marketing strategy among other things can t rely on a set of static or rigid processes, which limit innovation and ability to adjust to change quickly and cost effectively. It also restricts leveraging customer information which is dynamic in origin and content. A CRM system must provide both robust out-of-the-box processes customized for a casino/hotel and the flexibility to change as customer preferences evolve. Only then will it become an important source of competitive advantage to attract new customers and create brand loyalty. The central advantage of Microsoft s Dynamics CRM is that while it includes out-of-the-box capabilities it also offers the flexibility to adopt new customer outreach tactics quickly. To support the execution of a customer centric business strategy, it enables cost effective implementation of constantly changing marketing strategies. Most CRM systems come with highly standardized business processes that work well for business functions that are mostly static such as payroll processing. Their cost benefits are quickly diluted, especially in a dynamic environment such as a casino by the lack of flexibility and cost of change. In the long run, these processes become a liability. They often prevent casino marketing departments from adopting more effective customer outreach strategies. In the current competitive landscape, a casino can t afford to spend tens of millions of dollars as Harrah s did over a ten year period to build and reengineer loyalty and BI systems. Adapting technology to the business has to occur fast, cost effectively, and continuously for the marketing plans to remain a relevant source of competitive edge for the casino. If a loyalty or player tracking tool alone could drive profits, every business would be equally competitive. So what are the other sources of competitive advantage? What does the casino know about its customer? This is both identified and unidentified knowledge of the customer. The unidentified knowledge is what a business already knows about its customer without being fully aware of the power of that knowledge because it is often labeled as common or obvious knowledge. While that knowledge of a customer is nothing new to the insider it is nevertheless important information about the customer that is likely not being systematically exploited to build a customer relationship. This is typically knowledge resting with a casino employee, instead of a database. For example, your pit boss knows Jack has two kids and he coaches a little league baseball team. The identified knowledge of the customer is information about the customer such as an anniversary date stored in the database. Marketing can exploit this knowledge if it s systematically used in building the customer s profile. Information about the customer is dynamic and an effective marketing strategy has to be able to link and draw from multiple sources of customer information to get to know the customer better than the competition. Non-gaming amenities on the property are now as important a source of revenue as the gaming floor revenue in many casinos. Thus capturing data from the table games pit

3 and from the spa is required to understand the customer taste and determining promotions that customer wants and the property can afford. Therefore the CRM platform should aggregate data on the customer residing in multiple silos such as casino management system, food and beverage system, reward system, and the hotel s reservation system. Getting all data on one customer in one place is the first step to developing a 360 degree view of the customer. How is data on customer spend at the spa related to customer spend in the casino? How can this relationship be used in developing the customer s profile? How is this knowledge meaningful in developing customer loyalty? These are some of the basic questions that a casino will be able to answer by aggregating data sitting in multiple silo-ed systems. Therefore it s important to connect multiple systems that house information on a customer. For example, integration with the property management system and rendering information on the concierge s mobile device may enable the hotel staff to greet a frequent customer by name at the hotel entrance. This may be an exchange that lasts only a few seconds, but it goes a long way to create a more personal experience. A higher level of personal treatment can be delivered cost effectively by integrating and rendering data from multiple systems. Marketing strategies are as powerful as the speed at which data from multiple systems is analyzed and used to offer customer a higher level of service. It s one of the ways to deliver high-touch customer service cost effectively. For example, real time data integration with the player tracking system may allow a customer who gets hungry while playing black jack to instantly use reward points to purchase buffet. In some situations pit boss may want to know when a high-roller player card is swiped on the floor. Similarly, knowing that a customer likes to play golf when making room reservation and offering a pro shop coupon in the room confirmation . These processes that depend on how quickly relevant information on a customer can be pulled to offer a promotion that customer cares about can without human intervention make the interaction with the customer personal and goes to increasing brand loyalty. Microsoft s Dynamics CRM is designed to work seamlessly with other systems. It natively integrates with any application that can expose and consume web services. Microsoft s BizTalk may be deployed when there are multiple integration points with applications that cannot expose or consume web services. Microsoft s BizTalk has a comprehensive list of adaptors that make integration both less expensive and less time consuming. This addresses a major hurdle casinos face in implementing an effective CRM technology by aggregating data from multiple gaming and non-gaming platforms. Data integration services, to analyzing customer data from diverse data sources, are built into the BI platform. Dynamics CRM also provides extended capabilities such as the ability to analyze the revenue potential of gaming and non-gaming customers and the associated marketing cost. Share Point integration with Microsoft SQL Server allows user to store, share, and search for information as well as customize dashboards with visual data decomposition or drill-down capabilities. Microsoft s BI strategy relies on a basic premise that powerful analytical capabilities must be combined with equally powerful yet ubiquitous and familiar collaboration tools such as Share Point and Excel to share data intelligence externally and internally. Additionally, it is important that these tools be easy to learn and intuitive. Data visualization tools such as Office has given users self-serve capability in data analytics. Ability to analyze millions of rows of data inside Excel without DBA involvement is game changing. This means more extensive and widespread use of data analytics as a tool for decision making across the enterprise.

4 Social Marketing Some ten years ago, I ordered lemonade without ice at an upscale restaurant because it was a particularly cold day and icy lemonade was just not as appealing. The restaurant charged two dollar extra because more lemons had to be squeezed in a glass without ice. Today an incident of this type would be posted on Facebook to hundreds of friends, likely from the table itself with a picture of the leftover iceless lemonade, and my thoughts on the whole matter. Internal customer data housed in casino management systems, databases or personal knowledge of casino employees is as valuable as external data in social media sites. What s the value of a posting on Facebook stating that someone is having a super nice time at a certain casino? Generation X and Y post on Facebook or blog frequently. About 82 percent of the Facebook users in the age group 18 to 24 check Facebook more than once a day. As they get older, they re likely to stick with the habit as it is how they have learned to be social. Over 70 percent in the age groups 24 to 34 and 35 to 44 check Facebook more than once a day. The fastest-growing segment of Facebook users according to the Neilson company, is also the most important demographic for the casino. They belong to the 35 to 49 years age group. Social media sites have the potential to compound many times over both the bad and good experiences. Unlike ten years ago a customer today is able to quickly spread the word about an experience. Every experience potentially matters and has a potential impact on the bottom line. Casinos have largely lost control of content creation to its customers. Content is distributed in many social networks such as Twitter, Facebook, and YouTube. It does not follow any set standard. Casinos realize the power of social networks and social media marketing. Understanding how to harness the power to its advantage is complex. A marketing function like scanning Twitter accounts for city name and words such as upcoming trips can correlate to other external data sources such as an upcoming conference in the neighboring town. This can pinpoint a potential source of new customers for the casino within a 10 to 20 mile radius. Mapping this data in Bing maps will show visually where the people attending a conference are likely to stay. This information can help determine how busy the casino is expected to be during those days of the week that helps assess the opportunity cost of any promotional offer it may want to plan. Technologies like SharePoint, by itself, will not address the complexity inherent in developing digital marketing plans but it will enable a casino to be nimble and cost effective in implementing its social media strategy. SharePoint has social media connectors as well as pre-defined components to easily launch social sites, wikis and blogs. Dynamics CRM and SharePoint are highly complementary and together can deliver an unparalleled level of insight about customer preferences and characteristics to the casino. The interoperation between Dynamics CRM and SharePoint and between SQL server and SharePoint exposes internal and external customer data to the CRM system and BI tools for understanding and building marketing campaigns that customers value. Social media can be used in other innovative ways to engage with customers. The technology can enable continual customer engagement, which is often the end goal of social marketing, by providing social sites and other forums such as blogs to share experiences and interests. One avenue is to link individuals with like interests via social network at the casino/hotel property

5 itself. Social data can have powerful uses in being able to connect people with similar gaming preferences or interests. As an example, a casino can offer a group of friends interested in golf free club rentals or perhaps access to the newest model of Titleist? By using social data, the casino can target promotion dollars to creating a group social experience such as a golf outing that is to the group significantly more fun than a set of separate promotions even if the dollar value of individual promotions is greater. Using social data can help exploit the notion that perceived value of a promotion does not always directly correlate to its monitory value. Analyzing social data on how customers interact with one another on social networks will enable the casino/hotel to target promotions to network or a group of friends at the same time. Tracking this group social experience is important to understand the ROI and for designing similar social experiences to attract the group back to the casino. Dealing Big Data An effective BI strategy must be able to assimilate data from external sources, including the internet, and correlate it with data in internal systems to draw intelligent conclusions about a customer s spending pattern, tastes, and level of satisfaction. Social media marketing strategies that use social data rely heavily in being able to cost effectively analyze large volumes of unstructured data. Similarly, predictive analysis can provide valuable insight of customer s behavior by observing customer preferences over a long period of time and by finding relevant data from external sources. A major challenge in making sense out of external data is that it resides in no one format and is largely unstructured. Valuable data may reside in YouTube, in pictures, in RSS feeds or in legacy systems. Moreover the volume of data can be in petabytes (one quadrillion bytes) and it is very costly to create and maintain an on-premise infrastructure for big data analysis. Hadoop is an open sourced platform for analyzing big data workloads in a distributed environment. Microsoft makes Hadoop available on both windows server and as a service on Azure. Big Data as a service on Azure is a highly cost effective way to implement a Hadoop platform. In conjunction, other Azure platform tools such as Bing maps for geospatial analysis, SQL server, and SharePoint can help casinos visualize extremely large data sets from diverse sources. These powerful data aggregation and analysis tools give casinos contextual data to develop deeper understanding of customer s preferences and habits. The ultimate goal is real time analysis of large volumes of structured and unstructured data to offer promotions while the customer is on the property or engaged in a specific activity. For example, correlating information on visiting customers who are inclined to see shows and the number of unsold tickets to a local show to offer last minute deeply discounted promotions can help fill the seats for an event whose fixed cost has already been incurred. Smart phone usage, explosion of social media, and cloud computing are sources of potential contextual information on customers that Dynamics CRM can use strategically to grow revenues. Future of Gaming Many states are contemplating legislation to build casinos or regulate online gambling as a source of tax revenue. There is also a cultural shift partly because of the prevalence and popularity of nongaming amenities on the casino properties. Gaming has become more accepted in the society as one of the mainstream sources of entertainment. It is certain that over the next few years, the gaming platforms will extend to the Internet, mobile devices, and TV. Traditional gaming floors in the brick and mortar casinos with standalone slot machines and poker tables are also modernizing to server

6 based networked gaming floors. Also with in-room gaming the traditional gaming floor boundaries are being extended. The Dynamics CRM platform can seamlessly interface with increasingly diverse gaming platforms and channels to access them. The platform s open architecture gives developers the choice to build web applications on other programming languages. It also includes support for open source languages such as PHP. Security and privacy are important considerations in the future multi-channel and multi-platform gaming architectures. Security and privacy controls are built into each component from the infrastructure layer to the application layer. Moreover, security is maintained, enhanced, and regularly tested. The Windows Azure platform provides on-demand compute and storage services to host, scale, build, and manage next generation gaming applications. On demand provisioning of storage and compute capacity will influence web based gaming application designs because of high degree of variability between peak and non-peak usage of online gaming platforms. The Windows Azure platform delivers both high availability and dynamic scaling where customers pay for consumption. In closing, the integration of customer interactions with the property at different points during the customer s stay and the integration of the casino/hotel s CRM platform with new age gaming platforms will lead to a rich and impactful on-going relationship between the casino and its customers. Actionable analytics that draw insight from social and contextual data help create memorable customer experiences and emotional attachment to the brand. Niten Malik focuses on creating SaaS solutions. Over the years, he has built expertise in developing business case and operating models for cloud based multi-tenant solutions. Most recently, he led development cloud computing strategy and capabilities for Accenture's Public Service operating group. Niten holds a MBA from the Kellogg School of Business, Northwestern University. He can be contacted at

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