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Press Releases & Articles
An Open Letter to Atlantic City Casinos and Beyond
by
Martin R. Baird
(Print,
PDF)
This is an open letter to the leadership of Atlantic City casinos. I
encourage other casino leaders worldwide to read this because you
could be next.
It’s January as I write this column and the New Jersey Casino
Control Commission just announced that, for the first time, Atlantic
City casinos failed to increase their annual revenue. The commission
reported that revenue from Atlantic City properties was down 5.7
percent in 2007. For nearly 30 years, these casinos consistently
increased year-over-year revenue, even though the local market
endured economic slowdowns, inflation, expansion of gaming
nationwide and a world-altering terrorist attack only a two-hour
drive away.
So what happened in 2007 to stop this market’s growth?
Some people blame it on increased competition from Pennsylvania slot
machines. Others suggest it’s high-priced gasoline. Some think the
slowing U.S. economy is the culprit. A few point to the demolition
of one existing casino to make way for development of a new
megaresort. Then there’s that casino smoking ban that drove some
guests away.
I believe each of these factors played a role in Atlantic City’s
2007 struggles. But I have an additional thought. As far as I am
aware, no one has connected Atlantic City’s woes to failure to
deliver a superior guest gaming experience. Instead of a positive
experience, gaming executives have talked for years about future
“product” – new hotel rooms, casino expansion, more retail options,
etc. Don’t get me wrong. Product offering is critical to the
long-term success of a casino. You can’t offer a second-rate product
for decades and expect to compete. The U.S. auto industry is an
example of that.
Still, I’m pulled back to the argument for a wonderful guest
experience. Atlantic City gaming leadership knew for years that
Pennsylvania would become a competitor. They knew it would be a draw
from a proximity point of view. So did they work hard to offer a
competitive gaming experience? If they did, they sure hoodwinked me.
I’m not an economist, but as I read about the reasons for Atlantic
City’s slide last year, it haunts me that many of them are happening
in other markets around the world. Gas prices are skyrocketing in
other countries to levels that make fuel look cheap in America.
Every week, I read about new casinos dotting the globe, thus
increasing competition. The U.S. isn’t the only country slogging
through an economic slowdown.
So what must we learn from all this so we don’t experience downturns
in emerging or mature gaming markets everywhere during the coming
years? My answer may sound simple but don’t let that fool you.
The lesson to be learned is that future success is not about
out-building or out-marketing the competition. Instead, long-term
success can be found by doing two very important things: (1) move
your guests away from being casual visitors who let a variety of
excuses interrupt their desire to visit your casino and (2) turn
them into true advocates. I define an advocate as a person who will
risk their personal reputation for your casino. A guest advocate is
someone who – of his or her own free will – recommends your casino
to friends because of your amazing gaming experience. Because the
advocate risks his reputation by doing this, friends are more likely
to act on his recommendation and give you casino a whirl.
Advocates are not born; they are created. They are created by
casinos that match their promise of a good time with the actual
experience they provide when guests arrive. The experience they
deliver dictates whether guests will invest their reputations for
the casino.
Notice I said guest advocates invest their reputations I really
think it is an investment on their part if they go to that much
effort on behalf of a casino. The flip side is that casinos need to
invest to create advocates. Wishing and wanting is not enough.
Leadership must invest in a long-term approach to creating guest
advocates. They must invest in each and every interaction a guest
has, not just the physical product their property provides.
It’s important to note that this advocate-creation process is not
easy or fast. You can’t microwave guests for 30 seconds and make
them advocates. It’s a process that requires a long-term commitment.
Guest advocacy is the way of the future for all businesses, not just
casinos, and Atlantic City just proved that the future needs to be
addressed now.
It’s also important to point out that many of the reasons offered
for Atlantic City’s troubles were outside gaming leadership’s
control. It’s often easier to deal with a downturn when we feel we
don’t have control over it. After all, no one person can have an
impact on things like the economy, gas prices and increased
competition. You’re not accountable for a world you can’t control.
But gaming leadership should want to be in the driver’s seat when it
comes to their future success. When casinos shift to creating guest
advocates, they gain a high degree of control – and assume
responsibility. They are at the center of critical change and have
an amazing amount of control, as well as accountability. This can be
challenging for some people because they don’t want to be held
accountable. They don’t want to risk their reputation on guest
advocacy being the answer to generating success down the line.
This is not an indictment of any casino or the executives who run
it. I’m simply talking about reality. But risk is what makes
creating advocates so powerful. Advocates will accept the risk!
I hope you understand by now that the challenges I’m writing about
are not limited to Atlantic City. Gaming has issues to face
worldwide. It will take serious commitment for casino executives to
assume responsibility for areas they can influence. But they must do
that so their casinos remain strong no matter what happens with
things beyond their control.
As gaming matures and moves forward, long-term success will not come
from building bigger casinos and adding amenities. It will take new
thinking and innovative solutions in the area of guest relations to
compete going forward.
Martin R. Baird is chief executive officer of Robinson & Associates,
Inc., a customer service consulting firm that helps casinos
worldwide determine their Advocate Index, a number that indicates
the extent to which properties have guests who are willing to be
advocates, and then implements its Advocate Development System to
create more guest advocates and generate future growth and
profitability. Robinson & Associates may be reached at mbaird@casinocustomerservice.com
or 206-774-8856. The company Web sites are
www.advocatedevelopmentsystem.com and
www.casinocustomerservice.com.
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