CRM and Gambling in New Jersey

Print Action, May 2004 by Robinson, Jon

The Borgata won US$46.9 million from gamblers in its first month of operation, according to the state Casino Control Commission, making July 2003 the most lucrative month in the history of New Jersey's casino industry. Built for US$1.1 billion, the Borgata is the first new casino in Atlantic City in almost 13 years and its facilities rival those found in the famous caverns of Las Vegas. But what makes the Borgata unique is that its 3,650 slots, 145 table games and 2,000 suites feed information into one of the gambling world's most sophisticated databases.

A Customer Relationship Management (CRM) platform controlled by Vestcom International Inc. ingests Borgata's data and uses triggers to break down a client's arrival at the hotel, their eating habits, when the mini-bar is used or gambling chips bought, if they play slots or sit at the tables - when there is a break in the action. "They know your activity in the casino with excruciating detail," says Joseph Mislinski, CIO of marketing and business communicaitons at Vestcom, who helped build the Borgata's loyalty program called My Borgata Rewards. "The trick is to do it in a consensual way, with the opt-in, and the carrot here is the comp."

Casinos have always passed perks on to their more deserving players and now loyalty programs are turning the traditional free drink, meal, tickets to a show, maybe even a jet into the New Jersey airport into a measurable business strategy. My Borgata Rewards uses a black-label swipe card to identify high-end clients while everyone else receives a redlabel card. These two categories form the base of business rules - developed by Vestcom and set by Borgata - that determine what offers the casino will make to an individual.

Those business rules, including slots, tables, spend levels and so on, set off triggers in Vestcom's CRM system which manipulates them for a variable-data printing campaign. "If you look at the permutations there are over 36,000 combinations of offers that one might receive, so that every piece that comes off of our digital press is totally unique," says Mislinski, who adds that this campaign's response rates are nearly 30 times greater than those of traditional direct-mail campaigns. "Today, we think all of the way down to the micro-market of the individual."

Vestcom deals only with corporate clients primarily in the financial statement and leisure/gaming markets, and has always counted itself as a document production company that adds value to those documents. In the late 1960s, the company began to take reels of IBM tape and hang them on their own IBM mainframe to print documents on what were high-speed Xerox copiers. Considering the times, even back then, Vestcom could be counted as a company working on the edge of technology.

Today, Vestcom earns well over US$100 million a year in revenue and finds itself preparing for an incredible growth spurt. It is in the perfect business space - with established components of marketing, database management, CRM, mailing and digital printing - to take advantage of the emerging influence in one-to-one marketing. There are only a handful of companies in the marketplace that do similar things and Vestcom is unique in its service bureau approach to document production.

"I would say it is a challenge for commercial printers to move into the variable-data print market," says Mislinski. "It takes an investment and it may be a while before a commercial printer can see any real bottom-line results. You will see revenue but you are going to have a lot of costs up front. Not only do you have the operational issues of having to train people to utilize all of these new tools, with which they are totally unfamiliar, but you also need major sales and marketing channels."

Most commercial printers have a sales staff that can sell 2-million copies of the same piece for 2-million households. This type of print strategy, particularly in the direct-mail market, is becoming obsolete because companies in today's business world are changing their products and services at breakneck speeds. This is true of many sectors even outside direct mail, where forces like changing regulations and tight global markets cause the corporate world to adjust their offers constantly. They cannot afford to print a 500,0000 run and stick it on a shelf only to throw away 480,000 pieces two months later. Inventory control is a monster of an issue that is becoming a valuable tool in any good salesperson's arsenal.

Even inside direct mail there is a great deal of change in sales cycles because of the variable campaigns that can be developed through smart investment in technology. In the past it was considered advanced for a client to print a cell of 30,000 pieces at a certain price point for a certain demographic, and another 50,000 pieces at another price point for another demographic. The warranty manager of that direct-mail campaign would then take a look at the response rates to decide which program was most effective. The usual two per cent response rates on these programs are just not cutting it anymore.