White Paper. CRM in Casinos Leveraging CRM Technology

Transcription

1 White Paper CRM in Casinos HCL Technologies Limited. March 2007 CRM in Casinos Leveraging CRM Technology While the rest of corporate America is waking up to the value of truly detailed customer information, the neon-lit enclave of casino gambling is already taking it to unmatched levels. - IDG

2 An Introduction By 2010, the global Casino & Gaming sector is forecast to have a value of $387.5 billion - an increase of 29.7% since All casinos are looking forward to grow with the industry which has resulted in Casinos becoming very competitive and complex enterprises. Just as it s very hard for anyone who visits Las Vegas to miss sighting the MGM Grand, Harrah s or Caesar s Palace, it is equally difficult for Casinos to miss tracking a patron in their property. The competition is so intense that every whale, high-roller and patron in a Casino counts, and Casinos leave no stones unturned to retain existing patrons while simultaneously acquiring new ones. Casinos primarily have two growth options Organic growth (harder to achieve, loyalty driven) and Inorganic growth (easier to achieve, customer/property acquisition driven). For a Casino growing organically, loyalty management and customer experience is the primary area of focus. For a Casino growing inorganically, the focus would primarily be on customer acquisition activities. In today s highly competitive scenario any casino would have to initially focus on growing inorganically and as it matures, focus on organic growth. Loyalty and customer experience driven organic growth is a very complex initiative and requires the presence of an established CRM strategy that is being executed by a robust CRM system. Irrespective of the growth strategy used, all Casinos deploy similar CRM initiatives; the initiative priority, initiative mix, CRM strategy and strategy deployment will differ depending upon a Casino s growth strategy. A Casino with multiple properties and a very mature CRM process should ideally focus on both Organic and Inorganic growth. Competitive advantages that arise from CRM initiatives (Organic growth driven) are more sustaining and harder to imitate, thus creating a very clear competitive differentiator. From the differentiation perspective, Casinos cannot differentiate themselves solely based on their physical environment (properties, hotels, restaurants, game machines, etc). The physical environment does vary from casino to casino (or property to property) but will not deliver a differentiating competitive advantage. Casinos need to focus on processes that help deliver a consistent, positive and unique customer experience that increases brand value and facilitates patron loyalty. This whitepaper focuses on how Casinos can leverage CRM technology to create and deliver a personalized, superior and consistent customer experience that increases customer retention and acquisition rates. It also highlights the importance of CRM aspects like Customer Data Integration, CRM Analytics, Mobile CRM, Loyalty Management and Marketing Automation, describing at a high level how these components can help Casinos deliver a level of personalized customer experience so unique to the patron/casino/property, that no other Casino can imitate, resulting in a very clear competitive differentiator.

3 The Need for CRM Today, almost all Casinos have an existing operational CRM infrastructure that is used to manage customers and automate existing CRM processes. With Casinos focusing on customer centricity like never before, the existing operational CRM infrastructure which is still a necessity, is not sufficient. As Casinos mature, their CRM systems need to evolve from operational (process automation focused) to collaborative (customer interaction focused) to analytical (customer insight focused) systems. How and when this evolution happens is very critical to a Casino s overall growth strategy. Among other business aspects, a few critical areas where a CRM system can positively impact a Casino s operations are: Increasing Revenue/Profits: Casinos are under increasing pressure to drive incremental profits across business units. As mentioned previously, Casinos can increase their revenue via growth strategies that are Organic or Inorganic. Generally, Inorganic strategies require a lot of investment as it involves a lot of marketing or acquisition activities and usually take a while to start generating profits, as immediate profits are forfeited to build a larger customer base. Organic strategies are not investment oriented, but not all Casinos can rely solely on Organic growth strategies. To be able to conceive and execute an Organic growth focused strategy, a Casino requires a decent proportion/mix of its customer base to be (presently or potentially) either Whales or High-Rollers and also the existence of very mature, established (technology aided) CRM processes. Multi-Channel retention: A patron can access the Casino/property via multiple channels for various purposes. At every interaction (visit or non-visit) the patron provides some information that could be very critical to his profile. It is very critical for a Casino to be able to capture data and extract meaningful insights from all customer interactions, irrespective of the channel used. Customer data is heterogeneous and stored in multiple systems (reservations systems, property management systems, loyalty management systems, casino management systems, privacy management systems, revenue management systems, etc) making data integration more complex. With data scattered across various systems, accessed and updated by different departments, it becomes very challenging for a Casino to achieve a 360 view of patrons. The execution of effective cross-channel multi-property retention/cross-sell/acquisition activities requires the Casino to have an effective CDT strategy and system, to obtain a single view of patrons. Customer acquisition across business units/properties: Casinos have multiple business units that are spread across different properties. The profile of patrons differs depending on business units and properties (i.e. depending on the property the patron is in and the service being availed, the information required about the patron could differ). Casinos must have pre-defined target segments to group patrons based on certain attributes and target these segments with specially formulated campaigns. Such processes will make customer acquisition initiatives very effective. Identifying classification attributes and grouping customers based on segments/attributes is a very complex continually on-going activity that has a direct impact on the effectiveness of new customer acquisition rates and cost. Customer Insight: For a Casino to be able to deliver a differentiating customer experience, Casinos need to be able to understand and predict customer behavior. Casinos have established data collecting processes but an effective CRM Strategy requires the extraction of relevant customer insights from the data collected. This can be obtained using a strong Analytics solution, like Siebel Analytics. If Casinos are able to obtain customer insights, business rules could be used to facilitate real-time activities like reward points allocation/redemption, on the fly marketing campaigns, etc. The primary objective of a Casino s CRM Strategy should be to deliver a level of customer experience to its patrons that are personalized, unique, positive and consistent, irrespective of the property the patron is in, the channel the patron is accessing or the service the patron is availing. To be able to deliver a superior customer experience that develops into a competitive advantage creating differentiator, Casinos need to look beyond traditional Operational CRM architecture to a more real-time, tightly integrated, intelligence driven, mobile and agile CRM architecture that churns customer data into customer insights the basis to deliver a superior customer experience.

4 CRM Re-Loaded Most Casinos already have an efficient operational CRM architecture. Such Casinos need not replace their existing CRM system. Instead they can install the required modules to enhance functionality and evolve from the existing operational CRM to analytical CRM. A few enhancements that are very critical to delivering a superior customer experience are: Multi-channel integration to provide a 360 view of patrons Analytics Enablement using technology to gain customer insights and perform what-if simulations that optimize CRM initiatives Marketing Automation to automate complex multi-property, multi-channel, business rules driven, real-time and customer-centric marketing initiatives. Marketing automation modules can also help monitor and track campaigns, optimize marketing initiatives, etc. Loyalty Management Next generation loyalty management processes are about providing real-time loyalty points and dynamically changing schemes and offers (business-rules oriented) depending on the current status of the customer Mobile Enablement Adding mobility to your existing CRM application that can be accessed by Hosts as well as select patrons (existing/potential Whales and High-Rollers). CRM Infrastructure: Most Casinos already have a well set-up operational CRM system that focuses on customer data management and process automation. At the operational CRM level, basic CRM processes are automated. As a casino s customer and service portfolio increases, a lot more channels (to facilitate interactions with patrons) are used, leading Casinos to the realm of collaborative CRM. At this stage the focus is on customer data integration and customer profiling. The operational CRM level also involves the creation of a customer profile but at the Collaborative level a lot more complex and dynamic data is captured that focuses on creating a real-time CRM environment involving multiple entities. At the collaborative level, a lot of data is obtained via multiple channels, interactions, properties, service offerings with which Casinos can understand customer behavior and move towards predicting customer behavior. Moving towards analytical CRM, Casinos enter a new realm where the CRM system is used to create competitive advantage. Casinos in the analytical CRM realm can work towards designing customer experiences that are unique to every patron and consistent irrespective of the property the patron is in of service being availed. After Casinos have a well-set, proven and tested analytical CRM system, Casinos should begin focusing on using CRM dynamically (trigger based using business rules) with a real-time orientation. The icing on the cake would be to add mobility to the CRM system.

5 Figure 1 CRM System Architecture 360 view of patrons: For a Casino, a very important aspect of the CRM System is to understand and collect information about patrons. This is tricky, as information is collected across various channels and varies as the patron moves through various stages across the customer lifecycle, and also from property to property. In Casinos, information is collected from various sources and used by various departments because of which, data lies in silos, thus inhibiting casinos from obtaining a 360 view of the customer. The relevance and quality of data will directly impact the effectiveness of the CRM System. Casinos must take efforts to cleanse and deduplicate data, maintaining an appropriate level of data quality. Since Casinos have a diverse application portfolio, significant amounts of customer information are stored in other operational systems like Casino Management Systems, Revenue & Billing Systems, etc. Because of this, many casinos are not able to achieve a single view of the customer. To achieve a single view of the customer, customer data created and stored in different properties (or departments) has to be federated. We suggest casinos take a strategic approach by physically creating a customer database that contains master data required to capture the profile of the patron. Such an initiative will require the implementation of a CDI hub which will provide the basis for building and maintaining an enduring, accurate, timely and complete single view of the customer that can be shared across channels, properties, business units and partners.

6 Figure 2 Multi-Channel Integration The single view of the customer obtained using a CDI hub like Siebel UCM, is only useful for operational purposes. Applications that are used for data mining, information analysis (to obtain customer insights), etc., require a data warehouse that has an application neutral data-model. The analytical view (single view) will be different from the operational view (single view) of the customer, containing enormous quantities of detailed data that is summarized at different levels of aggregation. The master data (data for operational purposes) forms the basis for analytical operations. It is very crucial for a casino to strategically plan to leverage customer information, convert this to insight and work towards optimizing customer facing interactions. Understanding the customer is among the first steps a casino should take towards providing patrons with a superior, consistent and positive customer experience irrespective of the property they are in or the channel they are using. High-Stakes Analytics: For Casinos, unlike many other industries the challenge is not around data capture activities - most Casinos have very robust data capture systems that capture data from multiple properties/channels. Substantial information is obtained from smart cards that a Casino s customer swipes at game tables/slot machines/restaurants. The smart card records information on the customer s winnings, information on electronic gambling machines, the customer s purchases at on-site retail and specialty stores, and the customer s redemption, participation in promotions and marketing offers, etc. Another very vital source of data capture is via the floor manager s observations. The challenge for Casinos lies in performing complex analysis of the data to obtain customer insights, understand/predict customer behavior and optimize customer facing initiatives that help deliver a customer experience that is unique to every customer. Customer analysis is not a very easy task, considering the amount of information available and the level of insight required. The level of customer insight/analysis and the accuracy that a Casino can achieve using technology is remarkable. CRM Analytics can help Casinos generate patron information related reports, manage patrons (based on behavior insights) and finally predict patron behavior; transforming previously reactive CRM initiatives to proactive initiatives.

7 Figure 3 Becoming a more proactive enterprise using CRM Analytics Casinos can use Analytics at three levels - Reporting, Managing and Predicting. Reporting is the first level and activities performed at this stage (report generation and querying) are necessary but not sufficient. Reporting by itself cannot generate a great deal of competitive advantage. Reporting will help Casinos managers understand the progress of CRM activities, provide information about patrons, etc. Reporting is necessary to obtain information on the customer base, preferences, priorities, etc., required to manage the customer in a desired pre-defined format. The second level involves managing the customer base, activities like segmentation, benchmarking, etc. At this level reports are put in a context to facilitate decision making and customer management. The final level involves predicting patron behavior based on the Casino s understanding of a patron s behavior and preference (from the reporting and managing levels). Casinos can perform what-if analysis on planned initiatives and optimize initiatives to meet customer expectations. Analytics could be of great use to Casinos, especially with respect to Marketing. Using marketing analytics Casinos can execute more sophisticated analysis like simulating and optimizing marketing initiatives in addition to the basic measurement and reporting capabilities. Marketing Analytics enable Casinos to execute marketing scenario simulations, which can guide marketing initiatives across properties. Using marketing analytics, Casinos will be able to perform highly dynamic planning and forecasting as well as continuous analysis and optimization to refine strategies and improve execution. These results can then be displayed using marketing dashboards and portals, making marketing information visible across all departments/properties of the Casino as well as partners (external entities). This level of insight will make marketing initiatives more efficient and effective by setting customer-centric goals and executing customerfocused initiatives. This level of customer centricity results in closed-loop marketing actives with a very effective feedback mechanism that will drive loyalty, result in new customer acquisitions while simultaneously paving the path for Hosts to deliver an unmatchable customer experience irrespective of the property the patron is in or the channel the patron is using. Analytics can help Casino managers analyze how a patron s spending can change as a result of changes in the price structure, promotional campaigns, events, loyalty programs, and other quantifiable factors that might affect a patron s gaming behavior. Once a Casino has a robust analytics system, the focus should be to enable the analytics system to work in real-time. Many Casinos have achieved real-time processing at the operational CRM level, but in-order to provide a differentiating customer experience, Casinos need to slowly move towards real-time business-rules enabled processing at the analytical level. Marketing to patrons: Casinos undertake a lot of marketing initiatives new product launches, marketing campaigns (web, , direct mail), events (in-casino & outdoor), loyalty programs, etc., that are executed across multiple revenue generating entities - the casino (slots, table games & other games), restaurant/bars, hotel, retail outlets and shows/entertainment across multiple properties. A patron can at any time be in any property accessing any entity of the casino, exposed to the various ongoing marketing campaigns. The CRM systems must be dynamic enough to plan, design, execute, monitor and track all marketing initiatives being executed by the casinos for various entities across properties for various target segments.

8 Most casinos face issues around planning and managing marketing programs. By using project management capabilities of marketing automation applications, casinos can streamline planning and execution of marketing activities. Leading marketing solutions like Siebel Marketing aid the entire marketing process - planning and allocating budgets, creating marketing programs, designing marketing campaigns, executing campaigns, tracking marketing initiatives, monitoring cost and generating reports. Using marketing solutions, Casinos can also identify campaigns (that have been previously executed) for a particular scenario thus being able to effectively reuse previously executed campaigns. Figure 4 Automaton of the Entire Marketing Process With many Casinos focusing on inorganic growth, cross-marketing initiatives are gaining a lot of importance. Casinos focusing on customer acquisitions should focus on three primary aspects of crossmarketing common player tracking system, common reward systems and cross-property interaction initiatives. Casinos that execute cross-marketing initiatives via marketing solutions will be able to provide patrons with a highly consistent and customized experience that is bound to inspire loyalty. Patron Loyalty: The more time a patron spends in a Casino, the more the Casino learns about the patron. This information is used to design targeted marketing campaigns & offers for the patron, delivering a very positive customer experience that infuses loyalty. The designing and execution of loyalty programs completely depends on data collection and data analysis (to understand customer behavior). The success of a loyalty program is dependent the Casino s understanding of patron behavior and preferences (which can be obtained using a robust analytics system). Almost all Casinos have a loyalty program that is supported by a loyalty management system. Casinos now need to look beyond traditional loyalty management systems, focusing on customer centric, customer driven and real-time oriented loyalty management systems. A real-time orientation will enable patrons to receive and use loyalty points/rewards more quickly - for instance a customer who is on a loosing streak could get a few free credits to help regain some of his losses or if a patron has spent over a particular amount on the Poker table, the patron will get a message offering a free stay at the Casino s hotel which the patron can either accept or use at a later date. Casinos need to focus on analytics based, business-rules driven and realtime loyalty programs.

9 Enabling Mobility: The value provided by CRM systems can be tremendously increased by enabling mobility. Enabling mobility will create tremendous value for a Casino as it will allow Casino Managers to manage patrons like never before, providing patrons with a whole new customer experience. Casino managers can view real-time information on Casino Operations (CRM specific), Hosts can be provided with real-time dynamic information on their clients (irrespective of the property the patron is in or the service the patron is availing) and clients can be provided with real-time information on their reward points, open campaigns, reservations, etc. Using a handheld, a patron can access any customer facing interface. A lot of innovation is possible around creating mobile solutions for Casinos. Mobile CRM solutions will truly enhance customer experience by offering Casino managers and patrons real-time dynamic information on virtually anything inside the Casino. The process of a Casinos CRM system evolving from an operational system to a competitive advantage creating analytical system is very complex and critical. Such an initiative needs to be very tightly aligned with a Casino s strategy, requiring organizational wide collaboration as the analytical CRM system will provide insights to all departments of the casino, adding value to the customer at every stage - providing a level of customer experience like never before. In today s highly competitive gaming industry, a Casino s CRM strategy can transform a Casino s competitive stand, helping it obtain an unmatchable customer focus that fosters a great level of loyalty from patrons.

10 CRM Application Solution Map for Casinos Casinos have a lot of applications/modules to choose from to make up their CRM system, or transform the existing operation CRM to an analytical system. Based on our experience and product evaluation studies, we suggest the following applications/modules for a Casino s analytical CRM system. Figure 5 CRM Application Solution Map for Casinos

11 In Conclusion Based on our experience with various CRM applications and from product evaluation studies, we suggest that Casinos use Siebel as their primary CRM application. Siebel CRM is a very robust, scalable and agile CRM application with very strong market presence and deep industry functionality. Siebel Hospitality 8.0, is a SOA enabled application that effectively addresses a Casino s hospitality requirements like priority based patron management, event management, events related logistics management, group sales initiative management and managing coordination between Casino Managers, Hotel Managers, Event Organizers and Operational Supervisors. Siebel Hospitality can help Casinos increase their sales capture rates, maximize transaction pricing, optimize asset utilization, and enhance account management while constantly streamlining operations. Using Seibel Hospitality as the base, Casinos can add on Siebel Sales and Siebel Marketing (a comprehensive closed-loop marketing solution) functionalities to streamline processes involving account and patron management, sales processes, opportunity management, channel management (multi-channel management), assessments, audits and marketing initiatives like marketing programs, campaigns (auto triggered multi-level campaigns), events, offers, etc. One of the best ways for a Casino to manage Customer data integration is by using Siebel s Universal Customer Master (UCM), a component of Siebel s Customer Data Integration solution that is a comprehensive customer data hub that unifies customer data across multiple business units, multiple channels and functionally disparate systems. Siebel UCM can help Casinos enhance customer experience, improve cross-sell/up-sell initiatives and address risk management and regulatory requirements. Using Oracle's Siebel Loyalty Management Casinos can create loyalty campaigns that are supported by a full range of analytics, marketing, and service capabilities that help Casinos understand each customer's lifetime value, and design service levels and promotions that maximize the potential of all customer relationships. Siebel Sales & Marketing Analytics solutions can help Casinos improve forecast accuracy, product and service design/allocation, enhance lead tracking and management, identify high-potential customer segments or groups, obtain real-time visibility into campaign results and ROI and identify services, campaigns, offers, etc., most likely to appeal to a Patron/High-Roller or a Whale. Casinos that leverage the functionality offered by Siebel CRM can deliver the customer experience that will differentiate a Casino s service portfolio, infuse patron loyalty and enable identification and acquisition of profitable customers (High-rollers/Whales) thus increasing the revenue of a Casino while creating a sustainable customer-driven competitive advantage. The only way Casinos can differentiate themselves in today s highly competitive gaming industry is by providing a customer experience so unique to a patron that cannot be matched by another casino. Offering this level of customer experience requires Casinos to move beyond their existing operational CRM architecture to a more agile, insight driven analytical CRM architecture. Casinos should now look at adding a real-time orientation and mobility to their CRM infrastructure that will tremendously increase the value of the CRM system by enabling Casinos to make on the fly decisions on marketing campaigns, resource optimization, patron loyalty, events, service offerings, etc. Such a CRM infrastructure will transform Casinos, making customer centricity their DNA, enabling the delivery of unmatchable customer experiences that infuses loyalty while simultaneously acquiring profitable customers. Hello there, I m from HCL Technologies, We work behind the scenes, helping our customers to shift paradigms and start revolutions. We use digital engineering to build superhuman capabilities. We make sure that the rate of progress far exceeds the price. And right now 30,000 of us bright sparks are busy developing solutions for 493 customers in 15 countries across the world HCL Technologies. HCL Technologies and the HCL logo are registered trademarks of HCL Technologies. All other product or company names mentioned are used for identification purposes only and are trademarks of their respective owners. HCL Technologies, Tel: Fax: crmcoe@hcl.in