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Press Releases & Articles
Is Your Casino Tracking for Success?
By
Martin R. Baird
(Print,
PDF)
If I made a
prognostication, I would bet that your casino tracks the following
areas of its business at some level: customer satisfaction, guest
spending, customer demographics, guest loyalty and, of course,
employee satisfaction.
You probably
have your marketing department’s research people do this or perhaps
you use outside consultants and set it up so you receive monthly
reports. My guess is that you use scientific procedures and select
a statistically significant and random sample for your studies.
That’s all
wonderful! But I have a very serious question. Can you validate
that any of this information has even the slightest correlation to
your casino’s future growth and success?
I’m not
talking about anecdotal evidence. So we are all on the same page,
I’ll give you my definition of anecdotal – unreliable evidence based
on personal experience that has not been empirically tested and
which is often used in an argument as if it had been proved
scientifically or statistically. Think about when you and your
colleagues sit around the conference room and talk about how X is
causing Y to happen. I call these “mother-in-law” studies. It
means that you asked your mother-in-law what she thought and you
knew she would always tell you the truth.
I’ll narrow
my serious question down a little. Have you statistically proved
that improved customer satisfaction leads to future growth for your
casino? Don’t scoff because I think this question is more critical
than you could possibly imagine.
I read a
recent article in Harvard Business Review that quoted research by
Bain & Company. The research tracked the ACSI (American Customer
Satisfaction Index) produced by the University of Michigan to see if
it had any correlation to companies’ future growth. The conclusion
in this article was beyond stunning. It was mind blowing! The
article said there is a correlation coefficient of 0 between the
ACSI and a company’s future growth. Scientifically, the ACSI has no
correlation at all!
Sure, perhaps
the authors of the article just made up the information. Maybe they
sat around a conference room table and said, “Let’s tell people the
ACSI has no correlation to success.” I don’t think so.
I hope I have
grabbed your attention to the point where you are willing to look at
this on a deeper level. I think the challenge is the concept of
satisfaction. The idea of satisfaction is rather abstract and very
subjective. A perfect example is my wife and me. We own a Saturn
VUE. She is extremely satisfied. I would be in the dissatisfied
group. Does that make one of us right and one wrong? Could Saturn
use that data to grow its business? Is the information too
subjective?
Here is an
interesting statistic.
Eighty-nine percent of people who owned cars from a certain
manufacturer said they were very satisfied. This is
wonderful news for the car company, right? Not so fast. Less than
20 percent of those people purchased their next car from that same
manufacturer. How can this be? If they were very satisfied, why
would they switch?
Here’s a more important question: why is this auto manufacturer
even tracking satisfaction at all? Why invest money and time in
monthly guest and employee satisfaction surveys? Believe me, your
employees are just as fickle as the auto buyers. If you asked your
employees if they were satisfied the day they were given EO, their
answer would be “very satisfied.” The next day, if they didn’t get
to EO, they would be “dissatisfied.” So what are they?
Your customers are just as fickle. Are they actually satisfied?
Are they actually loyal?
When it comes to satisfaction, the reason people are hard to pin
down is because they have nothing to lose or gain. They have no
risk in the equation. Think for a moment about the person playing a
blackjack computer game at home. They’re betting $10,000 per hand
of make-believe money. They always wonder why they win millions at
home and never a dime at the casino. The answer is that they don’t
have any risk on the computer, so they bet and behave differently.
When there’s real money at stake, they could lose and that means
risk, so they bet differently.
If your casino is tracking satisfaction, can the resulting
statistics be used to predict the future success of your casino?
I’m telling you that they can’t.
It’s time for casinos to ask employees and customers questions that
can be tracked and tied to future growth. Other industries are
doing it. Some of the computer companies realized in the last two
years that satisfaction surveys were a waste and moved on. They
have discovered something that works better.
It’s time for casinos to look at what other industries are doing as
opposed to looking back at what they have always done. Casinos can
learn from the past but what they really need to learn is that there
is a better, more accurate way to predict their future growth. This
is being done, but not in the gaming industry.
Article appeared
in the October 2005 issue of Native American Casino.
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