by Dan White
Tribal gaming continues to grow. Even in the face of a pandemic, many properties are reporting record profits. And with features and services like sports betting, mobile and cashless gaming on the horizon, the future appears increasingly bright for tribal casinos.
So why is casino marketing more important than ever before? While the industry has seen steady and continuous growth, it has also seen increased commoditization; there is far less differentiation between products, amenities, services, advertising and marketing programs than there was just ten years ago.
Why should this be of concern to casino operators? Years of market research has revealed, time and again, that the number one factor for guests when choosing which casino to visit is location and proximity. When all else is equal, gamblers tend to visit the casino that is closest to them. What this means is that a commoditized casino industry will benefit properties with the best locations, making it more difficult for other casinos to build market share without eroding margins.
There are a number of factors driving commoditization in the industry. One of the leading contributors is something that may best be described as the input trap. The industry is not lacking in experts, consultants, vendors and seasoned professionals. Much of the information that forms decisions and plans is distilled through the same sources. It should be no surprise then that the outputs look so similar. This is not to suggest that such experts have no value. On the contrary, many provide critical support and valuable services to casinos across the country. It is important to be mindful of this effect, however. If our inputs are so similar, the outputs will be equally similar.
One way to avoid the input trap is to look outside the casino industry for inspiration. There are many highly competitive industries that have had to deal with commoditization for years. This includes airlines, credit cards, telecommunications, insurance companies, and many more. Within these industries are some great examples of innovation and building market share. Companies like Southwest Airlines, Warby Parker and Wayfair are just a few examples of companies that have overcome the effects of commoditization.
Another closely related factor is the adoption of industry “best practices.” While best practices are critical in areas like IT, human resources and regulatory matters, marketers should avoid adopting industry best practices that haven’t undergone rigorous evaluation. If most casinos adopt marketing best practices, don’t be surprised to find striking similarities to programs, rewards, benefits and strategies.
Instead, casino marketers can build programs and practices around their unique qualities, demographics and the preferences of their guests. No two casinos are alike and even casinos that share the same market may have very different drivers for their business. Before adopting any best practice, ask yourself if it is right for your property and if it will make you more like your competition or less.
One final contributing factor of commoditization to touch on here is the over-reliance on technology for differentiation. Technology has many wonderful and powerful benefits. It can dramatically improve efficiency, save money and improve the overall guest experience. It is also, in most cases, easily replicated by the competition. Technology should compliment your strategy, but does not generally serve as a long-term solution to creating true differentiation.
So what should be done about commoditization? This is where marketing plays a critical role. It starts with differentiation. How is your casino different from the competition? Which attribute or concept do you own in the mind of the gamblers in your market? What can you offer or provide that the competition cannot easily imitate? These questions can help a casino begin to forge a real differentiating strategy. There are many ways to differentiate. You can differentiate on value, service, amenities, rewards, appeal to specific demographics or segments within the market, unique services, loyalty programs and more.
There are several steps needed to implement a differentiation strategy. The first is to conduct a full market analysis. This can be done by building out a matrix that includes all the benefits, amenities and services offered by the competition in your market. This is a helpful tool that may highlight some key areas in which there is opportunity to differentiate. What you are trying to do at this stage is take inventory of the market and see the ways in which you are similar to other properties and the ways in which you are different.
The next step is market research. For this step, it is best to use an experienced research firm. The findings should meet a minimum methodological standard in terms of confidence level and margin of error. These findings will be the foundation for building your long-term strategy.
There are a variety of market studies that can be undertaken. A brand awareness study may be the best place to start. Brand awareness studies can provide valuable insight of your current position, any attributes or perceptions associated with your property and provide a real account of how you are currently perceived in the market. But be prepared. Sometimes the findings can be a bit sobering and even unexpected. That is a good thing, however, as it gets you closer to the truth.
With the market analysis and market study completed, you are ready to do the real work. This is the fun part of casino marketing; what attribute can you own in the mind of the gamblers within your market? What can you do different or uniquely? What can you do best that cannot be easily replicated?
For this effort, consider a broader group of stakeholders from within the organization: gaming, food and beverage, hotel, executive team, etc. This is the opportunity to present the findings from the research and analysis of the market. This is also a great opportunity to build buy-in from across the organization on both the need to differentiate and the strategy you eventually develop.
The final stage of this process is to develop the advertising and messaging that will support the campaign. Whether you work with an agency or handle advertising internally, the creative should clearly reflect the differentiation and position. The reach and frequency of this message is critical. It can take months for a campaign to take hold within a market. Patience at this juncture is invaluable. Conducting another brand awareness study four-to-six months into a campaign can be a great way to measure progress and the overall impact of your strategy.
While commoditization can seem difficult to overcome, adopting a differentiating mindset and seeking on-going opportunities to set your property apart is an effective way to minimize the impacts of intense competition.
Dan White is Director of Marketing for Muckleshoot Casino in Auburn, WA. He can be reached by calling (360) 890-1433 or email [email protected].