I know that many of you have followed my ongoing series of articles about how to make money in the casino business today. I keep repeating one of my friend’s favorite sayings that being successful in the casino business today is not about making money but rather it is about creating value. And as always, many of you keep challenging me for more detail and more in depth information. Therefore, since I was employed previously by Foxwoods Resort Casino, it makes sense for me to use Foxwoods as an example for this article. Foxwoods is the largest casino in North America today. Foxwoods, at the time, had over 380 Table Games, 7,400 Slot Machines, 1,500 Hotel Rooms and approximately 12,000 employees plus a wide variety or restaurants, salon, spa, showroom and two Rees Jones designed golf courses. Foxwoods is located in the middle of 2,500 acres of pristine virgin forest half way between New York City and Boston. Therefore, due to Foxwoods remote location, Foxwoods aggressively marketed to every single segment of its different gaming markets ranging from Bingo, Poker, Slots and Table Games. We also focused a great deal of attention and marketing on our non-gaming revenue producing areas such as salon, spa, entertainment and retail to help support the overall marketing efforts of the property.
In addition to all of this, many people still believe that there must be a secret formula for success in the casino industry. This made me reflect for a moment to try to think about exactly what are the critical elements that would make up some magical formula for Foxwoods phenomenal success at that time that could be replicated by other casinos around the world. In retrospect, I did come up with my own interpretation of that secret success formula:
The Casino Secret Formula for Success =
The 3 P’s (People, Product & Profit) X Marketing / Financial Analysis, Training, Motivation & Fear
Our CEO was the “Master of All” and understood the casino resort business well. He implemented a company wide training program focusing every one of our 12,000 employees, as well as all newly hired employees, on the benefits of understanding the 3 P’s and how they impacted both Foxwoods and each of them personally through our various employee rewards and recognition programs. The first P stands for People which represents both our customers and our employees who provide service and create value for our customers. The second P stands for Product which represents a wide array of different products and services offered by the casino. And the third P stands for Profit which represents one of our primary goals at the property. It is important for all employees to understand that casinos are in business to make a reasonable profit for their owners. Their individual actions affect our overall ability to remain profitable as well as their own well being for both the present and for the future.
The second part of the Success Formula was marketing. Our Executive Vice President of Marketing was the “Magician” at that time. He magically created unique casino special events, fantasies, illusions and other offerings to constantly create “value” which brought customers to the casino on an ongoing basis allowing us to maximize almost every square inch of space at the property. His marketing team was the best and consisted of representatives from Entertainment, Promotions, Sales, Brand Marketing, Advertising, Casino Marketing, Player Development, Casino Hosts, Financial Analysis, Junkets, Direct Marketing, Special Events, Public Relations, Creative Arts, MIS, Retail, Table Games and Slots. This eclectic Marketing Team used to meet every week at a regularly scheduled time to review, plan and critique. This close interaction and communication among the various team members from so many different departments is paramount for success. How does your casino operate?
Financial Analysis was another vital and critical element in the Casino Secret Formula for Success. Our Financial Analysis was broken down into two distinctively different areas. One team focused their efforts on both financial results and on performance results of the various operating departments throughout the casino resort. In addition, they continually monitored financial results of all of our direct competitors. The other key team was more focused upon marketing analysis. They evaluated all marketing programs at Foxwoods and they also analyzed all expenses versus return on investment. This enabled us to react quickly to any marketing programs, entertainment or special events that were under-performing. They helped our VP of Entertainment to fine tune his area maximizing the use of different types of entertainment. Quick reaction allowed us to modify or cancel a program quickly to also help maximize our overall profit goals. Our MIS or IT Department actively supported our Marketing Analysis as well and was especially helpful with our Comp Review Committee which carefully monitored individual player profitability. Financial analysis and Marketing Analysis are two absolutely critical functions for any modern casino. If you don’t have reliable current financial analysis, get some quickly. It is one investment that will pay for itself many times over. Take a close look at your own casino to see where your support is coming from as well as what else do you need.
Training is another critical area. I like to tell people that one can never over communicate in the casino business. I believe the same is true about training. Creating value for your customers materializes in many different ways in a casino. However, your employees are the ones who support much of that value with friendly, excellent customer service. If you think this happens on its own then you are wrong and heading down a path of self destruction. You can never over train. However, you need to determine the proper balance between training costs, service expectations and real service rendered. It is oftentimes difficult to objectively analyze this internally. Therefore, Foxwoods employed outside independent consulting companies to both mystery shop our property and also interview our customers to determine their level of satisfaction with what they actually experienced at the casino. Customer satisfaction eventually became one of our employee goals and played an important part in the employee annual performance reviews and annual bonus. Depending upon the size of your Human Resources or Personnel Department, you can either do this internally or you can out-source customer service training to an industry expert like Marty Baird from Robinson and Associates which is a professional customer service consulting firm that specializes in this area and works with numerous casinos around the world.
Motivation is always high on my list as well. The casino business is a high pressure industry where our employees are constantly subjected to numerous pressures and stress in dealing with the general public and especially with casino players. Therefore, motivation is a huge factor in relieving much of this stress and will also dramatically help everything from customer service to the overall cleanliness of the property. Motivation, recognition and rewards should always play an important role in any casino today.
Fear is another hidden factor that many people don’t like to discuss. However, I personally think that it is also an important factor that needs to be recognized. Motivation is extremely important and every psychologist will always tell you it is a key success factor. I agree but from my own experience I have found that it is also best to have a small element of fear implanted into a casino operation as well. Fear prevents complacency and deters theft. Educators will argue that it is a negative motivator but others will also stress that it does work. You will have to decide what is best for your own particular casino operation. Overall, I personally prefer motivation but I also understand the fear element.
And finally, I want to mention once again, one of the most important but often invisible or non-tangible factors in the Casino Secret Success Formula is value. You need to constantly create “value” for your customers. Create the value first and making money will be much easier. Good luck.
(Please feel free to forward to people in your network or your company if you think that they will benefit from my educational articles. Cheers….Steve Karoul)