Focus on QCI: AGI54 brings product-based marketing to the casino floor

February 23, 2024 8:00 AM
Photo: CDC Gaming Reports
  • Buck Wargo, CDC Gaming Reports
February 23, 2024 8:00 AM
  • Buck Wargo, CDC Gaming Reports

Quick Custom Intelligence is unveiling AGI54, the latest iteration of its QCI Enterprise Platform that challenges the metrics the casino industry uses in merchandising and marketing.

The QCI Enterprise Platform is deployed in over 150 Casino Resorts in six countries, where it provides operational tooling for player development, marketing and slots. AGI54 builds upon AGI53 and will be released prior to the Indian Gaming Association trade show in Anaheim in April. It’s being tested in a handful of North American casinos, both tribal and commercial.

QCI Chief Technology Officer and co-founder, Andrew Cardno, said innovations with AGI54 enable product-based marketing.

“In the industry today, we do marketing based on worth,” Cardno said. “A customer spends $1,000 a month, and we will typically offer them $200 in incentives. Marketing teams think about worth and reinvestment while the gaming team thinks about the gaming product. Wouldn’t it be interesting to say, ‘I have this group of players who like this group of products,’ and build tools to do product-based marketing? It’s different to the typical worth-based reinvestment industry and requires new capabilities to achieve.”

Cardno questioned why in 2024 the casino industry isn’t doing product-based marketing. Amazon, for example, tells shoppers if they like this product, there are others they will like as well. Other industries have similar approaches of pushing other products, he added.

“But you go to the gaming industry and we say here’s $200, but have little alignment with the player’s gaming product preference,” he explained. “The tooling brings product marketing capability in the picture along with product merchandising.”

With large box retailers, a lot of work goes into the layout of the inside of the product, how it’s put together, and what products are placed next to it to create synergy across the space, creating a retail experience, said Cardno.

“In retail we call that merchandising, and we have built the tooling with AGI54 to allow people to do gaming floor merchandising at a new level,” he said. “We have some customers who are early in doing these things and seeing tremendous results. They are able to create merchandised areas of their gaming floor, which is a capability of AGI53, but is much easier with AGI54. Using AGI54, we created the tooling to make it much more comprehensive. We have the visualization tools, the market basket tools, and target product marketing tools.”

AGI54 changes the way people think about the gaming floor, said Cardno. They have learned that games that have a dedicated group of players aren’t always the best games on the floor, and that’s okay.

“We figured out how to give different groups the experience they want,” he said. “Today, games are largely evaluated based on revenue and not customer product preference. If you go to Target, they have different merchandizing areas; they sell red wine and flat screen televisions, and they make more money per square foot with red wine, but you wouldn’t remove the wall of televisions and put in red wine. That would be absurd.”

While some slots generate more revenue than others, it doesn’t mean they should be removed from the gaming floor, Cardno said. The industry is using the wrong mathematical optimization by using the metric revenue per machine per day to evaluate games, he added.

“If I have a game that’s doing five times the house average, it’s likely you should get more of those, but the question is which games are you removing? If you remove games with a dedicated following but have lower revenue, you will lose the customers dedicated to those games because they will go find them elsewhere; you will put more games on the floor and actually lose total revenue. The metric you need to optimize to make more money is total gaming floor revenue or revenue per square foot.”

Cardno said he’s challenging the current casino industry mindset as mathematically wrong, and that total revenue earned that should be the driving force.

“As an industry, we’re stuck on this incorrect metric,” he said. “The metric has value and provides insight, but it doesn’t give you a completely optimal floor. You get better results when your mathematical outcome reflects the outcome you really want. This shift to new math models is a big shift and bold statement that shows QCI’s dedication to innovation.”

Cardno believes the approach will create some controversy, and that it will take time to educate people about it. He added that their job is innovation that helps the commercial and tribal casinos they work with, and past experience with this approach, manually doing the analysis, has delivered a 10% gain in revenue.

“There will be people who disagree with us and people who agree with us,” Cardno said. “We’re looking forward to the discussion. We’re not content with the status quo—it is our job to be thought leaders. If what I am saying is correct that the industry is making suboptimal decisions for merchandising and marketing, this is a large opportunity for the industry. If you want to improve your revenue by 10%, talk to us about product marketing.”