It is no secret that the casino business has become more competitive. As casinos in Atlantic City and elsewhere know only too well, patrons have more local choices as new markets have opened and existing markets have relaxed the barriers to entry for new casinos. In addition, destination markets have become more competitive with new entrants like Cosmopolitan in Las Vegas and Revel in Atlantic City who have beautiful, highly capitalized properties opening in recent years.

Casinos can do some things to slow new entrants, as we will write in a future post. However, what if the new entrants have already arrived? How should existing casinos think about strategies for preserving and expanding market share?

Today, many casinos look at state published gaming data to know where they stand. This data does provide some trending information, but it provides little trade area-specific reporting for casinos and tells the casino marketer nothing about how different types of players have trended for their casino.

The starting place is simple – get focused on the high frequency, high value players and create your strategy around them. This is of course the traditional wisdom in our industry, but how many casino marketing programs are systematically constructed and measured against this goal? At best, the industry does this inconsistently and measures the results poorly.

Take a look at the chart below for example. It outlines two competitors in a major casino market. One competitor could be typified as having a sophisticated, highly organized marketing organization; the other, despite being a large casino with corporate marketing support, was less sophisticated and more traditional in its approach. The traditional competitor had a nicer, newer property with far more capital deployed in it.

Market_Share_Blog_Chart

The chart segments share of wallet for each of these casinos by value bucket and frequency bucket. For example, in the high value, high frequency bucket the sophisticated competitor had 55% share and the traditional competitor had only 33% share. Conversely, in the low value, low frequency bucket the sophisticated competitor had 42% share and the traditional competitor had 48% share of wallet.

There are three lessons to take from this brief study –

  1. Focus on market and wallet share metrics. These metrics drive your profitability and are discoverable via either survey data or by tools like GCA’s Casino Share Intelligence. If you don’t know where you stand on these metrics you are flying blind.
  2. Casinos can get more than their fair cut of wallet share and market share by clever marketing focused on frequency and value. This is almost certainly the most efficient way to drive improved EBITDA at the property level.
  3. Facilities are not the only drivers of attractive customers. Marketing that’s focused on high frequency, high value patrons and service can be cheaper and lead to a better ROE.