Sky City wins big from loyalty system revamp

Sometimes you find out unpalatable truths when you ask your customers what they think of you. Sky City's Gold Card customers didn't feel valued and considered their rewards for loyalty were too cheap.

Sometimes you find out unpalatable truths when you ask your customers what they think of you.

Sky City’s Gold Card customers didn’t feel valued and considered their rewards for loyalty were too cheap. They thought the service they received was below expectation, that their interaction with casino staff was impersonal and that the IT system behind the loyalty scheme went down too often.

In short, says Debra Brooks, Sky City Entertainment Group’s loyalty general manager, Gold Card members were not being catered for. When the research was done, over 18 months ago, customers didn’t really even understand how the loyalty programme worked.

Brooks, speaking to an audience of marketers and IT managers at a Direct Marketing Association seminar in Auckland early this month, says Sky City conducted the research as part of a major revamp of the scheme. It knew the Gold Card had to go. It was focused on gaming machines and had no ability to integrate with the wider entertainment complex. The company had little idea of how members interacted with the programme and how often they played. The new Action card had to be able to let the casino:

  • build profiles of customers and track their behaviour
  • consistently reward the most profitable and loyal customers
  • build stronger relationships with customers and understand their needs better
  • incorporate all entertainment services and casino sites.
Cardholders would be able to pick up and redeem points for all spending in Sky City’s casinos in Auckland, Queenstown, Adelaide and, as of September, Hamilton — at the point of sale.

The ultimate objectives behind the new loyalty scheme were to increase gaming machine and table revenue and usage, along the way retaining existing customers and reactivating inactive Gold Card members.

The results sound impressive. Average daily visits were up by almost half and revenue was up 77%. Moreover, Action had attracted 47% of overall gaming revenue in November as opposed to 17% in September of 2000. Card uptake and length of visit had improved greatly, but most pleasing, says Brooks, is that Action’s percentage of food and beverage revenue — “a battle” — had doubled in 15 months from 7% to 14%.

The changes have also increased customer satisfaction, says Brooks, who is recommending Action to others. “That’s vital to the success of the programme.”

The project was “extremely complex and ambitious” from a technological point of view, says Brooks. The loyalty system consists of three different databases, five operating systems and three main interfaces. A dedicated team ran the project, which was split into phases.

All promotional activity is assessed against factors such as visits and revenue from cardholders, tracked play, wins, cost per response and cost per sale. The ideal is to spend the right amount on the right cardholders — 30% of cardholders contribute over 90% of Action’s profits.

Critical success factors? Top management buy-in, extensive staff training, good project management with business unit cooperation, listening to customers and focus on analysis of the results.

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