Table of Contents CHAPTER 1: SCIENTIFIC APPROACH TO INCREASING REPEAT BUSINESS.……………………………………….....2

CHAPTER 2: CASINOS THAT FOCUS ON GUEST SERVICE HIT THE JACKPOT …………………..……………...…..5

CHAPTER 3: CUSTOMER SATISFACTION: TURNING YOUR BUSINESS INTO

WHAT MEN AND WOMEN WANT……………………………………..………………………………………………….…7

CHAPTER 4: GAMING ESTABLISHMENTS USE RESEARCH TO COMPETITIVE ADVANTAGE……………………9 CHAPTING 5: GETTING THE MOST OUT OF YOUR CUSTOMER RESEARCH…………………………...........……13

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CHAPTER 1: A SCIENTIFIC APPROACH TO INCREASING REPEAT BUSINESS Repeat business from loyal customers plays a vital role in the success of most businesses. Customers are much more likely to return to your business if they are satisfied customers. Some businesses rely on common sense when deciding what will lead to customer satisfaction. For example, it seems obvious that customers will want friendly, efficient, service. It seems logical that customers will want quality products and services at a good price. Right? Throw common sense out the window The problem with the “common sense” approach is that common sense isn’t as common as we think. Each person’s “common” sense is based on his or her own personal experiences and each person’s experience is extremely limited when you consider the diversity of human behavior. Common sense knowledge varies widely across groups of people due to cultural differences and differences in experience. Not only does behavior vary widely from one group of people to another, but behavior also differs in one person across situations. Let’s look at how the variation in one person’s behavior applies to customer behavior. I can see these differences in my own consumer behavior. For example, when I am a customer at a fast food restaurant, I want fast, efficient service, especially if I am using the drive-thru. If the drive-thru has multiple windows, after placing my order at the first window I expect to see a bag of food dangling from an extended arm by the time I get to the second window. If it is not there, I wonder what the hold up is. Once I have the bag in my possession, I do a quick check of its contents to make sure I received everything I ordered and paid for. If I received the food quickly and the contents are correct, I am happy. I am less concerned with consistency in the quality of my purchase. Even if the temperature of the food is not perfect on some visits, but great on others, I am still highly likely to return to that fast food establishment if service is fast and accurate. However, if I am patronizing a fine dining establishment, I am not concerned with speed. Instead I like to take my time and enjoy a leisurely meal while visiting with family or friends and I do not want the restaurant staff to make me feel rushed. I also care more about the friendliness of the staff and consistency in the quality of the food and service.

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Accuracy of my order is still important, but not a deal-breaker because I trust that if there is a problem it will be corrected to my satisfaction. The restaurant’s atmosphere is also very important to me. I prefer a restaurant that is nicely decorated and has a cozy atmosphere. With the fast food restaurant, I am happy if it is clean, but the décor is not that important to me. Since human behavior is diverse, relying on common sense will not serve you well in satisfying your customers and increasing their intent to return to your business. So where should you get information on how to please your customers? From your customers Properly designed scientific research can give you insight into how your customers think. Surveys can reveal information about your customers’ attitudes and perceptions. Specifically, you can learn what drives your customers’ satisfaction and intent to return to your establishment. With this information, you can take action to influence your customers’ behavior and perceptions in a positive way, thus increasing the likelihood they will return to your business. This information can be especially helpful with segments of your target market that, in general, may be less likely to return. Take for example, the gaming industry. Many people gamble as a form of entertainment. There are many aspects of the gaming experience the person may enjoy but let’s face it, nothing beats winning. Winning is a rewarding experience that, in and of itself, reinforces the behavior of gambling. Losing however is not reinforcing. Have you ever seen someone jumping up and down is a casino with a big smile on their face while screaming, “I lost! I lost!” That just doesn’t happen. It is important to find other ways to make the gaming experience satisfying for these customers so that they will continue to return to that gaming establishment rather than going elsewhere. Whatever type of business you operate, it is important to regularly survey your customers to learn what will keep them coming back to your business. What information, specifically, do you need to get from customers to accomplish this? The theory of planned behavior can help answer this question. Developed by psychologists Icek Ajzen and Martin Fishbein, the theory of planned behavior is a model used to predict deliberate behavior. According to this theory, the best predictor of a behavior is a person’s intention to perform the behavior. This intention is determined by three things:

The person’s attitude toward the specific behavior; The person’s subjective norms (person’s beliefs about how other people they care about will view the

behavior in question); and The person’s perceived behavioral control (the ease with which the person believes they can perform the

behavior).

Thus, one of the most obvious questions to ask in a customer survey is a direct question about intention. We want to know the customer’s intention to return to our business so we include a survey item which asks the customer to identify their level of agreement with this statement, “I will visit this business again.” In addition, we will ask other questions that will help identify the customer’s attitudes, beliefs, and perceptions about the business and their experience with it which influence intent to return. An organizational psychologist can develop scientifically sound survey items to address all of these factors. An organizational psychologist can also use the customer survey results to identify the drivers of your customers’ behaviors and identify exactly what items need to be addressed in order to increase intent to return. Sometimes organizations make the mistake of focusing only on the survey items that receive a low average score. This is a

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common sense approach. But just like relying on common sense to know what customers want, there is a problem with focusing only on the lowest scoring survey items to increase customer satisfaction and intent to return. What is the problem with this approach? It is usually a complete waste of time Just because overall, customers rated a survey item poorly does not mean that improving their perceptions of that item(s) will increase their satisfaction or their intent to return. Those items may not be of great importance to your customers, even if your common sense tells you they should be very important. Organizational psychologists, using sophisticated statistical techniques, can analyze the relationships between every item on your customer survey. Based on this analysis they can identify just a few items that are driving (influencing) a large percentage of the other survey items. Specifically, the psychologist can identify the items that are driving customer satisfaction and intent to return. This takes the guesswork out of what a company should do once it receives the survey results. Only the drivers need to be addressed in order to influence customer behavior in a meaningful (profitable) way. Let’s look at an example of how scientific research was used to take the guesswork out of identifying the drivers of customer behavior in that difficult customer group mentioned earlier: gamblers who lose. Recently, the National Business Research Institute (NBRI) conducted an analysis on data collected from 50,000 customers of a gaming company. In the only analysis of its kind, NBRI identified the drivers that influence satisfaction and intent to return in two different types of casino customers: customers who lose while playing slots and pit customers who lose. There are so many factors that can potentially influence a casino customer’s experience that common sense leaves us completely in the dark when trying to determine the factors that make losing customers want to return to the casino. Utilizing scientific research however, the darkness quickly becomes light. In the study conducted by NBRI, it was discovered that for slot losers, both overall satisfaction and intent to return were driven by the customers’ perceptions of:

The casino as a fun and exciting place; The friendliness and helpfulness of the casino staff; and Intent to return for slot losers was also influenced by their perceptions regarding the wait time for casino

cashiers.

Overall satisfaction was also influenced by customer perceptions of:

The value of the players card reward program benefits; and How easy it is to obtain comps earned on the reward card program at another casino they play at. Thus

revealing that it is vital to know how customers compare your business with other similar businesses.

For pit losers in this study, both intent to return and overall satisfaction were driven by:

Customer perceptions of the casino restaurants.

Overall satisfaction was also influenced by:

The quality of the food and beverages in the restaurants; and The wait time for service in the restaurants.

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Knowledge of these drivers, obtained through scientific research, can be used by this casino chain to take actions that will increase customer satisfaction and intent to return in this difficult customer group. Of course, the target market for any business can be segmented in many different ways. Studying the intentions, perceptions and attitudes of various segments of your target market can give you information that, with proper action, will lead to more repeat business and increased profits.

CHAPTER 2: CASINOS THAT FOCUS ON GUEST SERVICE HIT THE JACKPOT When it comes to guest services, it takes a formidable strategy to be successful in the gaming industry. Satisfying guests who aren’t too happy about dropping $500 at the craps table in 20 minutes can be extremely challenging. The bottom line for the casino is to use every possible angle of guest services to achieve what every executive wants from their customers: lifetime loyalty. How did a small bingo parlor become the largest gaming company in the world? They focused on guest service. Harrah’s Entertainment, Inc., which was recently purchased by two private equity firms for $17.1 billion, rose through the gaming ranks from its humble beginnings as a bingo parlor to yearly revenues of nearly $8 billion with 40 casinos in 13 states, including Las Vegas mainstays like Caesars, the Flamingo and Bally’s. William Harrah was emphatic about guest service, focusing on his customers and his employees. In the post-William Harrah era following his death in 1971, the company grew by focusing on venues catering to Middle America, avoiding the brighter spotlight of the flashier Vegas casinos. Instead of pouring their precious resources into building the next mega-casino many casino properties have discovered the profitability of becoming the everyman’s casino, with guest service being the magnet to attract more customers. No matter how a gaming corporation chooses to utilize their resources, the fact remains that no casino today can survive without making a guest’s time at the property as pleasant as possible.

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“I would argue that guest satisfaction for the mass market customer is delivering as few hassles as possible,” said Jim Kilby, a professor in hotel management at the University of Nevada Las Vegas. “When dealing with casino players, as opposed to a hotel customer, guest service gets them to continue buying. I see guest service in a casino as more guest sales. The nicer we treat you, the more you buy.” Kilby, a co-author of the book “Casino Operations Management,” says that gaming companies are investing millions in service and technology to please every customer, but not all customers, especially in the casino business, will be treated equally. This is by design. “As far as guest satisfaction, there are different standards depending on the playing level of the customer,” said Kilby. “We have players who are provided with a 24-hour butler. They have a private limo with a driver for their use at any time. Some players require this level of treatment to be satisfied.” Alternatively, many casinos have discovered that their bread and butter are the players who don’t require the around-the-clock staff or stretch limo. Not that they don’t want the business from “whales,” gambling’s highest rollers. But many casinos have never had the panache of a Bellagio or Venetian, so after trying for years to consistently land big money players, many have given up on it. Many casinos today are focusing on measuring and analyzing customer behavior through guest service surveys. Casinos use these surveys to garner the necessary feedback to help the property create and maintain an environment that appeals to its guests. “Guest surveys can be effective in designing a moments of truth cycle for casino play,” said William Thompson, a UNLV professor and author of several gaming books. Thompson says that casinos invest heavily in guest satisfaction, but there are still flaws in the system. The typical guest survey tends to highlight whether a gaming facility is meeting the expectations of its guests, what improvements are necessary and how it compares to the competition. But the most important piece of information, by far, that a well-executed guest service survey can uncover is the likelihood that a guest will return to the property in the future and why.

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CHAPTER 3: CUSTOMER SATISFACTION: TURNING YOUR BUSINESS INTO WHAT MEN AND WOMEN WANT

Customer satisfaction drives a customer’s intent to return. Knowing the differences between what men and women

want can give a business an edge to increase repeat business and profitability.

Successful business owners understand the importance of returning customers. Knowing the desires and values of

customers is vital to survival. Many successful organizations now recognize the importance of regularly surveying

their customers. A dedication to the survey process reaps the reward of increased knowledge about customer

behavior and increased profitability.

But not all customers are alike. A recent study conducted by the National Business Research Institute (NBRI)

examined the attitudes of men and women in an on-line survey including 50,000 responses from casino customers.

The survey, which was conducted from February through December in 2006, revealed that men and women are not

identical in how they evaluate businesses.

In this study, NBRI conducted Root Cause Analyses to identify the survey items that are predictors or drivers of

customer behavior. These analyses apply the science of organizational psychology and statistical analyses to business

processes. The result of this advanced technique is groundbreaking information about the drivers of customer

behavior.

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The Root Cause Analysis of the women who patronize casinos identified two root causes of customer satisfaction: the

Rewards Card Program benefits and a good mix of slot machine types. NBRI also uncovered one root cause of

women’s intent to return to the casino—the friendliness and helpfulness of casino staff.

NBRI found the factors driving customer satisfaction and intent to return to be different for the male customers in

this study. Several root causes of customer satisfaction were identified for males. Men want a casino with a lot of

action and excitement where they can have fun. They also want a casino with appealing restaurants and a gaming

rewards card program with good cash bonus rewards and offers. Two factors were also driving intent to return for

male customers: safety of the casino property and a good mix of slot denominations.

Peter Drucker once said, “The aim of marketing is to know and understand the customer so well the product or

service fits him and sells itself.” To know and understand the customer requires rigorous research. The exacting

knowledge gained from customer surveys, such as the one conducted by NBRI for the Gaming Industry, provide

businesses with precise information about customers—both male and female—to ensure a good person-product and

person-service fit for the entire customer base.

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CHAPTER 4: GAMING ESTABLISHMENTS USE RESEARCH TO COMPETITIVE ADVANTAGE

As gaming establishments have increased in number, so has the competition between them. As competition increases

it becomes vital to a gaming establishment’s survival to gain an advantage over the competition in attracting

customers. Just how can this be accomplished?

Through Research

Scientific research provides a competitive edge over the competition whether you own a gaming establishment or

any other business that faces competition for customers. Through research insight is gained into three types of

information that can be used to an advantage over your competitors. The three types of information are knowledge

of:

Customer attitudes;

Customer perceptions; and

Customer behaviors

Wesley Roehl’s research illustrates the importance of knowledge of customer attitudes. Roehl, in an article published

in the Journal of Travel Research, stated that research has shown that users of casino amenities (i.e. gourmet

restaurants, coffee shops, and large-and small-scale shows) spend substantially more money gambling than do non-

users of these amenities. According to Roehl, as competition between casinos increases, information on the role

amenities play in attracting customers and keeping them on-site becomes more important in maintaining a

competitive edge. Surveying customers regularly can keep you abreast of their attitudes toward such amenities and

the role they play in a customers’ choice of casino.

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Knowledge of customer perceptions is also valuable. How a customer evaluates a casino is heavily influenced by

the contrast effect. Psychologists tell us that how we judge a stimulus, whether it is a person, place, object, or service,

is influenced by other similar stimuli we have recently been exposed to. A customer judges a gaming establishment by

comparing it to other casinos he or she has recently patronized, rather than by comparing it to a fixed standard.

You can experience the contrast effect in a dramatic way by exposing yourself to three physical stimuli: three buckets

of water at different temperatures. Take one bucket and fill it with very warm water. Fill a second bucket with very

cold water and a third with lukewarm water. Simultaneously place one hand in the bucket of very warm water and

the other in the very cold water. Keep your hands in these buckets at least 15 seconds. Next simultaneously remove

your hands from these buckets and place them both in the bucket of lukewarm water. Even though the hands are

being exposed to the same stimulus, they will not perceive the water temperature in the same way. The lukewarm

water will feel cool to the hand that has been in the very warm water. However, the hand that has been in the very

cold water will perceive the same lukewarm water as being quite warm. Now imagine two customers coming into

your business, whether it is a casino, restaurant, service provider or retail store, the same phenomenon applies.

These two customers, each with their own unique experiences, will perceive your business differently because each

will compare it to other businesses they have experience with. Thus, the same two customers patronizing your

business during the same time period may form two very different perceptions.

It is critical to have both knowledge of the customer’s attitudes and knowledge of the customer’s perceptions of your

business. When you use scientific research to learn about the customer’s attitudes, you gain powerful knowledge

about the drivers of the customer’s behavior. Learning the drivers of customer satisfaction and intent to return to

your business enables you to tailor your business to the needs and desires of your customers. For example, if you own

or operate a casino, you need to know whether customers are driven by a fun and exciting environment, a good mix

of slot types, or the comfort of the chairs in the casino, among many other possibilities.

Once you have identified these drivers you can then look at how customers perceive your casino based on these

drivers. You can get a limited view of customer perceptions by simply looking at the mean (average) scores for each of

these drivers on your survey. However, mean scores are completely subjective. You will be able to derive objective

meaning from your survey scores only if you can compare your scores with benchmarking data. If you utilize a

consulting firm to conduct your customer surveys, any good firm will have a large benchmarking database to compare

your scores to. A benchmarking database is based on the responses of many other customers to the same survey

questions and informs you how customers typically perceive each item. This provides you with objective information

on whether a particular score is good or bad.

Take, for example, two items often used on customer surveys, “I would recommend doing business with the

company to others” and “Sales representatives are responsive to my needs.” Let’s say that each of these items

received an average score of 3.99 on a six-point balanced scale ranging from “strongly disagree” (with a value of 1) to

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“strongly agree” (with a value of 6). A score of 3.99 would put each item just barely below the “slightly agree” point

which is valued at 4.0. Although the two mean scores are the same, their meanings are quite different as

benchmarking data clearly illustrates. As it turns out, 3.99 is a poor score for “I would recommend doing business

with the company to others” as 3.99 is only at the 38th percentile for this item. That means that 62% of individuals

surveyed gave this item a higher score. However, for “Sales representatives are responsive to my needs” a score of

3.99 is at the 96th percentile which tells us that most customers give this item a lower score. Thus, 3.99 is an

outstanding score in this case. Benchmarking data provides the objective information you need to make profitable

changes in your business.

We have examined the importance of investigating customer attitudes and perceptions. Next let’s look at the

importance of examining customer behaviors. Ultimately, it is the behavior of the customer that a business owner is

most concerned with. Knowledge of attitudes and perceptions are important because they influence behavior. In an

article entitled, “The Science of Decision-making: Behaviors Related to Gambling” published in the

journal International Gambling Studies, Edmund Fantino and colleagues report that a behavioral perspective can be

very useful in understanding the factors involved in a customer’s gambling. For example, for a gaming establishment

it can be helpful to know about behaviors such as how often customers gamble, how much money they typically

spend when they gamble, etc. Even more important is information about a customer’s “percent of wallet.” That is,

how much of their gambling money is spent at your casino and what percentage is spent at other casinos. This

information gives you vital knowledge of your customers’ behavior. Combined with the information you have about

customer attitudes and perceptions, you can use this knowledge to gain a competitive advantage over your

competition.

NBRI has combined knowledge of customer attitudes, perceptions and behavior in a powerful way to help gaming

establishments increase their advantage over competitors. In a unique customer study, NBRI conducted a

comparative analysis between two customer bases: those customers who spent a high percentage of their wallet at

one particular gaming establishment with those who spent a low percentage of their wallet at one particular

establishment. NBRI was able to identify the drivers of customer satisfaction, intent to return to the establishment,

and willingness to recommend the establishment to others in these two groups. For those customers spending a high

percentage of their wallet at one particular establishment, drivers included customer perceptions that the casino was

fun, had lots of action, and was exciting. Comfortable seating in the casino was also a driver for the high percent of

wallet group. In addition, the perception of the quality of the food and beverages sold at the casino was a driver.

Finally, the customers’ perceptions of how friendly the casino staff was drove behavior as well.

NBRI found some similarities when comparing the high and low percent of wallet groups. Like the high percentage

group, those who spent a low percentage of their wallets at a particular gaming establishment were also driven by

their perception of the casino as a fun place with lots of action and excitement. The perceived quality of the casino’s

food and beverages was also a driver for the low percentage group just as it was for the high percentage group.

However, there were also drivers that were unique to the low percent of wallet group.

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These included items related to the player card program and the casino slots. For the player card program drivers

included the customers’ perception of how simple and easy to understand the program was and the value of the

program’s benefits. For the slots, customers were driven by their perception that there was a good mix of slot themes

and a good mix of slot denominations.

A gaming establishment can use this information to influence the behavior of both the high and low percent of wallet

groups. Since they have some common drivers, taking action to improve customer perceptions of those drivers will

increase satisfaction, intent to return, and willingness to recommend in both customer groups. In addition, addressing

the drivers that were found to be unique to the high percent of wallet group can help ensure that these customers

continue to spend the majority of their gambling money at that gaming establishment. Taking action to improve the

perceptions of the low percent of wallet group on the drivers that were unique to them can lead to a change in the

behavior of this customer group. As their perceptions of their drivers improve for that gaming establishment, they will

want to spend more time at that gaming establishment and will increase the percentage of their gambling money

spent at that casino. In this way the gaming establishment gains an advantage over its competitors.

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CHAPTER 5: GETTING THE MOST OUT OF YOUR CUSTOMER RESEARCH Regularly surveying customers is a common practice among successful companies. Customer research is a

complicated process that requires an investment of time and money. Many companies outsource customer surveys to

survey research firms for three reasons:

It saves time;

It saves money and, most importantly;

It leaves survey design and analysis in the hands of highly trained professionals

Why do companies make this investment in customer research? Because they believe that knowledge of customer

behaviors, attitudes, and perceptions can lead to increased profits. However, there are two different types of

research—basic and applied. If you conduct basic research with your customers what impact will it have on your

profits?

None

In order to have a positive impact on profits, you must conduct applied research. What is the difference between

basic and applied research? In science, basic research is research done solely for the pursuit of knowledge. It is

conducted when a scientist simply wants to know more about a certain phenomenon. Applied research, on the other

hand, is conducted to solve a practical problem. Since customer research is conducted in order to gain knowledge

about customers that can be used to increase profits, it is applied research—at least in theory.

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Applied research must actually be applied or used to qualify as applied research. When teaching introductory courses

in psychology and sociology, during the first week of class I explain the scientific method to my students. I will

describe the steps of identifying a research question, selecting a method, and collecting and analyzing the data. At

this point I will typically ask the class, “Once I have analyzed the data, am I finished with my research?” Even

introductory students know the correct answer to this question is “No!” When I ask them why I can’t just analyze the

data and then lock my results away in a file cabinet, they correctly respond, “Because then no one will know about

your research and if no one knows about the research it cannot be used.”

Simply learning about customer perceptions is not enough. Unfortunately, some companies conduct customer

research, look at the results, and then file the report away without ever taking action. Thus, what they have actually

conducted is basic research—they have learned some interesting information about their customers. However the

information is of no real value. Something must be done with the information. But what?

Let’s examine how customer research has been applied in the gaming industry. Recently there has been an emphasis

in the gaming industry on using customer research for customer relationship management (CRM). CRM involves

tracking customer behavior for the purpose of developing relationship building and marketing programs that bond

customers to a brand. CRM is used in casinos to identify preferences, demographics and other measures to predict

customer behavior and customize marketing efforts. In an article published in the Journal of Revenue and Pricing

Management, Rom Hendler and Flavia Hendler described how CRM can be combined with revenue management to

maximize profitability. Casinos are using customer research to determine the destination, dining, and gaming choices

of their customers. This information is used to build complimentary and special offer programs that are customized to

the individual customers. Customer relationship management enables the casino to determine the resources to be

allocated to a customer based on their value. The customer’s value is typically based on their theoretical revenue (the

total amount wagered multiplied by the house advantage) and/or their average daily theoretical revenue (ADT)—the

total revenue divided by the number of days a player gambled. After assessing a customer’s profitability, the casino

can customize offers and determine how much the customer is eligible for in complimentary rooms, tickets, gifts,

discounts, etc. The reinvestment is usually a percentage of the customer’s estimated theoretical.

Casinos typically obtain the data used for customer relationship management through gaming rewards programs.

Each customer enrolled in the program has a card that enables the casino to keep track of their demographic

information, their gaming behavior, and their spending in the casino’s restaurants and other entertainment venues.

As stated earlier, this information is then used for revenue management and determines the comps and special offers

given to the customer. While this approach to customer research is applied and does have some impact on profits,

you must go beyond this to get the most out of your customer research. This micro level approach will be ineffective

unless the customer returns to the casino. Whether you are operating a gaming venue or any other type of business,

you must keep customers coming back in order to maximize profits. So how is this accomplished?

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By utilizing applied research at the macro level

To maximize the effectiveness and profitability of customer research, you must conduct applied research that will

keep your customers coming back to your establishment. Research of this type examines the attitudes and

perceptions of your customers and then, using cutting edge statistical techniques, identifies the specific issues that

must be addressed to increase customer satisfaction and intent to return to your business.

In the scientific literature you can find studies that come close to this approach to applied research. For example,

Anthony Lucas and K. Pearl Brewer, from the University of Nevada in Las Vegas, examined how a hotel casino can

manage slot operations using applied research. Their study, published in the Journal of Hospitality and Tourism

Research, was designed to identify and explain the sources of variation in the daily slot handle (i.e., the amount of

money wagered in all the slot machines) of a locals’ market hotel casino in Las Vegas. Their results helped the casino

under study improve their marketing efforts to increase profitability by using inferential (predictive) statistics. Lucas

and Brewer’s research showed the hotel casino management that some of their beliefs were incorrect and some of

their approaches were ineffective. For example, the casino management believed that food covers drove the slot

business in a locals’ market casino however; the research showed that it was not significantly related to slot handle.

The casino was also aggressively advertising and promoting its restaurant business at the time of the study. However,

it recorded a net loss on its departmental income statement in the food department. Since the research revealed that

the effect of food covers was not significant in influencing slot handle, the casino’s management was advised to

reconsider their use of food covers.

Such studies in the literature can provide some insight into customer behavior but the information cannot be

generalized (applied) to other businesses, even within the same genre. Human behavior is extremely diverse and

dynamic. If you want to utilize science to help you understand your customers and predict and influence their

behavior, you must conduct applied research with your customers. Conducting applied research with your own

customers on a regular basis will enable you to identify the dynamic drivers of their behavior. You can also identify

the drivers of customer satisfaction and intent to return for every key segment of your target market.

Recently, NBRI conducted customer research for a large gaming company. NBRI utilized the gaming company’s

customer database to conduct customer research that identified the key drivers of customer satisfaction and intent to

return. Recall that this information is vital because customer relationship management is ineffective without it—you

have no relationship with a customer unless he or she continues patronizing your business. Not only did NBRI identify

the key drivers of customer behavior in general, but they were also able to conduct analyses based on customer

average daily theoreticals. Recall that part of CRM is using ADTs to determine the comps and special offers given to

customers.

In this study, customer behavior was analyzed by three card types based on ADTs. Card type “A” includes customers

with ADTs of $300 or more. Customers with ADTs ranging from $100 to $299.99 were classified as card type “B” and

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those with ADTs from $20 to $99.99 as card type “C.” A proprietary Root Cause Analysis (RCA) was utilized to identify

the drivers of overall satisfaction and intent to return for each card type. The RCA uses a combination of regression

analysis and a psychological path analysis to identify the drivers of customer behavior.

For card type “A,” both overall satisfaction and intent to return were driven by customers’ perceptions of the casino

being a place where they have fun. Overall satisfaction for card type “B” was driven by the customers’ perceptions

that the casino had a good mix of slot machine themes and by how appealing they perceived the casino’s restaurants

to be. However, intent to return for card type “B” was driven by their perceptions of the wait time at the player

rewards card center and by how fair they perceived the comps earned based on play to be compared to those at their

other favorite casino. For card type “C” overall satisfaction was based on the customers’ perceptions that the casino

had a lot of action and excitement. It was also based on the friendliness and helpfulness of the restaurant staff and

the perceived value of the gaming rewards program benefits. Intent to return for card type “C” was driven by the

customers’ perception of feeling lucky in the casino. Friendliness and helpfulness of the restaurant staff was also a

driving factor for intent to return for card type “C” as was the perceived quality of the food and beverages in the

casino’s restaurants.

This information can be used by this gaming company to take actions that will increase overall satisfaction and intent

to return for customers of all ADT levels. Taking actions to increase satisfaction and intent to return will make any

micro level or customer relationship management efforts more effective. This type of applied customer research is

vital to the success of any business.