Total Patron Value – The Search for the Holy Grail

Defining Total Patron Value

Casinos do an excellent job of identifying, capturing and tracking information about their players. The challenge is to identify, capture and track information about customers not just players. Customers, unlike players, spend money throughout the entire resort that often goes untracked. It’s very easy to track casino play, and even hotel charges and food and beverage charges when a customer is using a player card or staying in the hotel and posting charges to their hotel folio. But a customer that spends cash or uses a credit card for their spending, is often completely missed and under the radar for marketing purposes.


All players are customers but not all customers are players.

All players are customers but not all customers are players.

A perfect true-life example of this happened to a friend that is the CEO of a major corporation (non- gaming). During his stay at a high-end strip casino resort, he spent well over $8,000 on his room, spa treatments for his wife, dinner and some excellent wine, but nothing in the casino. But when he tried to get a dinner reservation one night during his stay, he was told that the restaurant was booked that night, and only had availability at 5:30pm or 9:30pm – not the greatest time to have dinner. When he told his friend, who happened to be a slot player, the player made one quick phone call and secured a 7:30 pm reservation. That friend played dollar slots, came to Vegas 3-4 times a year, and usually lost about $500 each trip. This underscores the issue around total patron value and why there is a disconnect between casino marketing and marketing to the total patron value. And since my CEO friend is not a player, the casino probably only knows about his room charge because his dinners went on a credit card and were not posted to his folio. That’s an $8000 revenue customer, with a net worth to the resort of around $4000 that shows up in the hotel as a 2 night customer with an ADR of $199. The hotel might market to him, but it won’t be the right offer nor the right message – he might get an invite for a two for one at the buffet, but not complimentary night in a suite.

Understanding more about our customers will allow casinos to market more successfully – something needed now more than ever. In the past, it often sufficed to know a player’s basic transactional information such as game played, average bet, time played, win/loss, and etcetera. We used this information to calculate theoretical win, a key statistic used by every casino to determine the level of rewards, offers, cash back, promotions, and complimentaries to provide. Typically calculated as average bet multiplied by time played multiplied by the win percentage of the game multiplied by decisions per hour of the game, with perhaps some refinement for the type of player or game, theoretical win provided a good estimate of the player’s worth. A percentage of this number is then established to gauge customer rewards and enticements.

Theoretical Win

Theoretical Win

Including a customer’s hotel folio charges is an essential part of understanding a player’s worth to the casino. It includes all activity that the customer charges to his or her room, some of which may be comped, some of which may be guest pay (i.e., paid by the customer). But missing will be items not posted to the folio – for example when a customer uses a different credit card to spread out his or her spending. And of course any customers not staying in the hotel are not able to post charges to a folio, so all of their transactions are not included in their transactional history. Capturing these other transactions (credit card, cash, non-hotel charges, etc.) are the components that complete the total patron value picture. Please note that total patron value is a part of your business intelligence or CRM system, but is not the complete solution. Also note that BI and CRM do not always included total patron value.

To know a patron’s true net worth and the source of that revenue is to be able to conduct laser-accurate marketing. Combining casino win/loss with non-casino spending, and adjusting for hard and soft costs, is the only way to attain a true net worth. Many of us know the challenge well – we’ve heard about total patron value for years, and have searched for it like it was the Holy Grail; elusive, mystical, and perhaps only existing in our fantasy world of the perfect marketing system.

A Brief History

Gone are the glamour days of our business when being a casino marketing host meant you wielded the power of the comp – friends and customers could count on you for a wide range of amenities, all in the guise of promoting our business. And to some degree, it was justifiable – people in your casino usually translated to higher casino revenues. There wasn’t much issue around it, because casino revenues continued to rise. But closer to reality was that business was expanding each year, no matter how many hotel rooms, slot machines, or cranky celebrity chef restaurants were opened.

As casino resorts continued to expand and the number of hotel rooms reached quantities that were borderline ridiculous (5,000 or 7,000 rooms at one location) the dynamics of the casino business model changed. Because of the sheer numbers, revenues from areas other than the casino began to rise disproportionately compared to casino revenue. Quarterly reports indicated that room revenue when combined with other non-gaming profit centers such as food & beverage, entertainment, and retail, started to outpace gaming revenues. So when a slot machine on the strip averaged $125/day and room rates at some hotels were averaging $299/night – and you had more hotel rooms than slot machines – it was easy to understand the change.

Consequently, P&L meetings took on a different dynamic too. Division leaders that were rewarded in the past for merely breaking even, were now producing impressive profits. So owners and boards of directors put more pressure on them to continue to increase these newly found profits. Very quickly, division leaders were more interested in their own area being profitable then working for the common good of the property. They forgot that at the end of the day, all the profit went to a single line item, and not just their own division. Clouded by striving to beat expectations, they worried more about making their bonus than how to partner with other departments. This created conflicts with marketing groups like hotel marketing, hotel sales, entertainment marketing and others, each of which were functioning autonomously and coordinating very little with each other, let alone casino marketing. This is why that even today, I still receive hotel offers and casino offers from the same casino resort that compete with each other.

Some visionary executives realized how this had gotten away from a coordinated marketing approach and sought to create a single point that combined all of a customer’s activity that could be summed up and provide a profit and loss statement at an individual level. Gaming technology pioneers such as John Boushy, Marshall Andrew, and Glenn Bonner were some of the first to blaze the trail for us today. Working with rudimentary tools, they started what would become the future of marketing solutions in casino resorts.

The Search for the Holy Grail

Like Indiana Jones, casino resorts have been searching for their own Holy Grail, true and accurate total patron value. They start their search in the catacombs of their casinos, working to exploit their legacy systems for ways to conjure and cajole the bits and bytes to magically produce their grail. When their search leads them to lackluster results, there are enough clues to make them think that perhaps the grail does exist, but is to be found elsewhere. Egged on by marketing and technology evangelists they continue their search for a solution that is perhaps hidden away in a vastly more expensive system that is nearly impossible to find and even harder to implement.

So why is finding a system that provides total patron value so hard to find? The data often exists in separate systems, and merely needs to be extracted and loaded to a repository where it can be combined and associated. This of course is much easier said than done. Today, there are more tools than ever to assist in the data extraction so we can now access the data faster and more frequently. I remember back in the 1980’s when a marketing load might take almost 24 hours! Now, we would consider 24 minutes too long to wait. And as long as the data is associated to a customer, via a customer number or some other identifying tag, we can associate all the data together. This is a big step forward, but still doesn’t complete the picture.

The rest of the picture entails capturing unassociated data. We have to capture data that is inherently elusive: cash and credit card transactions. While the amount of actual cash spent by a customer is usually low, it does add up. And without it, we don’t have the complete picture. But more important are the credit card transactions which can completely change the level of marketing for a customer. Credit card transactions that are not linked to the customer are very difficult to associate to a customer. While some gaming companies have made great strides in accomplishing this task, it is not a perfect science. The concept is to match credit card information to data you already have on file (to the same credit card number or customer name). That’s easier for a customer named Saverio Scheri, but much harder for a customer named John Smith. Also, the laws around credit card information make it illegal for you to access key data that would make the process easier and more accurate.

In order to track unassociated data, such as the $5 tee shirt purchase at the gift shop or the $500 dinner at the steak house, customers need to identify themselves by using a card, usually their player card, in order to create that identifying tag. At this point, we really shouldn’t call it a player card any longer – it is a loyalty club card that should be used every time a customer interacts with the property. Some casino resorts have resisted trying to get their customers to use a loyalty card for non-gaming transactions, but others have embraced the concept.

Total Patron ValueWe should point to Harrah’s as an example of how it is quite possible: For many years, Harrah’s has claimed to capture total patron value in their Total RewardsTM program. While many industry experts were skeptical of these claims, it appears that their program is far more robust today and does live up to the hype. Customers can use their loyalty card whenever they interact with the property, even when they’re in the steakhouse using their credit card. But remember, just because customers can use their card doesn’t mean will use it, or use it all the time. It is important to note that Harrah’s and other gaming companies that are successfully capturing this data have invested many years and many millions of dollars to achieve this technology, much of which is customized and proprietary.

Solutions, Solutions Everywhere, and Not a One that Works

How has the industry survived so long without total patron value? The answer is both simple and complicated at the same time. For many casinos, they simply do without it. They use what they have available for marketing, and make the best of it. Most will use their player tracking system and hotel system interface (the most common scenario) and this will give them a good idea of a player’s value.

But our friend the CEO will not be marketed to properly, if at all, because he is only in their hotel system. Unless the resort independently markets to hotel guests, he won’t be invited back; and if they do, he may receive an offer that will more likely insult him than entice him.

A better approach that some casinos embraced, even when times were good, was to select and implement a marketing solution or solutions that would provide total patron value. What many didn’t realize was the cost, time and effort required to make these solutions work. Polished salespeople convinced casino executives that it would be easy and cost effective to implement these solutions. The reality was far different and unless you remained fully committed to the effort, the plug was often pulled without little or nil results. For everyone that was purchased and implemented successfully, there were three that failed fantastically.

Light at the End of the Tunnel

After years, if not decades, of total patron hype, real solutions are finally emerging. They are not easy solutions, mainly because it is not an easy problem to solve. They’re not cheap either, but they are less expensive than they used to be. They don’t take years to implement, but they do take months.

We’re starting to see solutions from a number of vendors that address the entire total patron value challenge, or at least a key component of it, that are real and reliable. One big reason for their success is that the casinos are better understanding the commitment needed to implement these solutions – a commitment not just from IT and marketing, but from the very top of the organization right down to the front line employees that face the customer every day.

Large multi-billion dollar corporations have committed to the gaming space with solutions that vary in their level of customization for casinos. Oracle, Teradata, IBM, Microsoft, SAS, Infor (ePiphany) and others have very robust solutions that are not for the faint of heart. These are the Cadillacs of marketing solutions that require a big commitment to implement (dollars, time, and people) but can yield amazing results if executed properly. These solutions can provide the full gamut of marketing system components including business intelligence, CRM, total patron value, direct marketing, and campaign management, and more, if you’re willing to pay for it.

IGT’s Mariposa™, Bally’s Business Intelligence System™ and Aristocrats Oasis 360™ are the slot manufacturer’s response to the entry of larger corporations into this marketplace. Their solutions provide more of a business intelligence spin, and less of a total patron value solution. These solutions are all very good, implement faster and cost much less than the larger solution sets. They provide a cost effective next step for the casino that may just beginning their journey to total patron value.

Somewhere in-between the large solutions and the modules offered by the slot manufacturers are revenue management systems. Rainmaker, Ideas, Amadeus, RMS and others are an essential component of your business intelligence or CRM solution. Again, not necessarily providing total patron value, they are still an important component system to augment total patron value, keying off the data to provide a complete solution.

Changing the Way Your Company Operates

The most important aspect of total patron value, or any advanced marketing solution for that matter, is changing the way people think. If you upgrade from a go-kart to a Ferrari but can’t get the Ferrari out of first gear, all you have is a system that is faster but provides the same results. More than just the basic training from your marketing system company, you will need to re-think your approach to data, information and knowledge. Moving from data to information isn’t too hard, and most of these solutions will get you there. But moving from information to knowledge requires a change in your thinking and approach to customer marketing. Knowledge of your customers, their true value, and what marketing triggers work best.


Real or near-real time answers about customers from all of your front-facing systems gets you as close to total patron value as possible, and can transform your data into information. Transforming data into knowledge is up to you.