There seems to be some disagreement whether it was Lord Kelvin, W. Edwards Deming or Peter Drucker who said, “If you can’t measure it, you can’t improve it.” Some variations were, “You can’t manage what you can’t measure.” Or Tom Peters who said, “What gets measured gets done.”
While this subject is a frequent topic of debate in management books, what’s not up for interpretation is that measurement is critical to improving your casino marketing. It’s also sadly common that many overlook this basic principle. In casino marketing, there is no better tape measure than “test and control (T&C).”
In their recently-released book, “The Math That Gaming Made” (4th edition), Andrew Cardno and Ralph Thomas state, “To effectively evaluate programs, a random sample must be held out of the (program) called a control group; the (program’s) performance is then compared to this control group’s performance.”
Here’s an extreme example to demonstrate the principle: Last month you sent an email or snail-mail promotion that offered a select group of patriotic guests $76 in Free Play. The results appeared to be amazing. You set an overall record for the highest Coin In on a Tuesday in the last 12 months. The group that received the Free Play averaged a 17.5% boost over their normal spend less Free Play. Everyone celebrates that the promotion was a smash hit and plans are made to repeat it often in the future.
Admittedly, you probably wouldn’t need a control group to realize that any offer to visit your casino on Tuesday, July 4th, 2023 might have produced one of your stronger days with absolutely no promotional efforts. But more realistically, an Independence Day-control group might have let you know that many players matching the demographics of the targeted group also played 17.5% or even higher than normal on this holiday period. In other words, rather than a smash hit, this promotion was a complete waste of money.
Conversely, the control group may have shown little or no lift in their normal gaming spend, thus the promotion, unexpectedly, was very worthwhile despite the holiday.
The book says it more formally: “Using T&C techniques can shed an amazing amount of light on our marketing campaigns. What appears at first glance (via redemption analysis) to be a hugely profitable program could turn out, in fact, to be unprofitable.”
T&C has several advantages over other methods, such as year-to-year comparisons. There are just too many variables in evaluating annual changes. What was happening with the competition? Was the economy stable? Were you re-carpeting the casino? How high/low were gas prices? Etc. (And July 4th was on a Monday in 2022, making for a three-day vs. four-day holiday for many.)
Another extreme example would be using year-to-year comparisons in the Reno/Lake Tahoe area. This past winter they experienced epic snowfalls that closed highways to their feeder markets and trapped many locals indoors or stuck behind snow shovels. The casino’s Winter 2023/24 numbers will probably show strong year-to-year improvements if it is a “normal winter,” but not necessarily due to any promotions (T&C can sort this out). Likewise, many good programs this last winter could have been undervalued due to these external factors.
Another failure of many marketers is to make sure their T&C efforts are consistent and well-conceived. In the first July 4th example above, we looked only at the holiday Tuesday. But what happened before and after that date could provide even more insight?
It is very important to include what Cardno and Thomas call the “shoulder dates” in your analysis. They define this period as three days prior and three days after an “offer” or promotion date. Why?
A promotion that simply shifts visitation dates with no incremental revenue for the extended period is wasteful. Expanding the date range of your T&C comparisons can eliminate this variable. In the case of holidays and special events, this shoulder period may be extended to the week or two before the event and after.
As mentioned, consistency is critical. There can be dozens and dozens of variables in casino revenues and a true picture often emerges only after multiple trials.
Creative and successful marketing promotions are critical to driving incremental revenues. But only if they work. The way to ensure good performance is to methodically measure your results with a solid and consistent program of Test & Control.
