Is Casino Direct Mail Done?
This post has very little to do with casino talent buying or talent buyers. Try to remember that we are also casino professionals who stay abreast of the latest trends and this is meant to be informative for casino patrons and curious executives.
It is no secret that many casinos consider their direct mail program to be the lifeblood of their marketing efforts. But just because it has been the cornerstone of nearly all casino marketing campaigns for decades, that doesn’t mean it is COVID-19 proof. The truth is, that like casinos revenues across the nation active mailer redemption has never been lower. And given the current circumstances, this presents an interesting opportunity for quick-witted marketers and casino executives looking to disrupt the expensive age-old industry trend. Prior to COVID-19, the average redemption rate for a standalone casino direct mail offer amongst active players has hovered around an impressive average of 80%. The cost of driving that level of redemption is equally impressive.
3 Reasons casino experts say permanently switching to online and free casino APPs to locate/redeem casino offers makes more sense?
Reason 1 Savings
The first reason is the most obvious, savings. The constant expense of a monthly direct mail campaign for a matrix of active players ads up quickly. Over the course of a year, a given property could save $1,000,000 or more, easily. An active mailer with 80,000 direct mail pieces will cost around $1 each and that is without considering any other hard costs such as postage, which alone will tack on tens of thousands more dollars. Unlike destination casinos in Vegas, most locals casinos are considered to be in a high-frequency market, which means they are also likely to have a weekly mailer for first-time players who sign up at the players club on the day of their first visit. Typically those are fairly large mailers as well, albeit often less fancy and bountiful offer wise. Depending on the size, location, and type of casino, it could be an additional 10,000 to 20,000 or more pieces of direct mail every month. On a side note, the types of offers within both types of mailers and the total liability for these offers vary greatly. Generally speaking, around ⅓ of the liability for active players will be redeemed as food or free play offers. And that alone can amount to several million dollars in soft costs. It is also important to note that roughly 10% of non-active and new players redeem direct mail pieces for any type of offer.
Reason 2 Safety
Circulating 472 million pieces of paper a day (mail) in any form is inherently susceptible to gathering bacteria and germs that can cause illness. The concept of dirty money is not a new idea and easily applies to the mail system given the rate of exchange and volume. Currently, casino players and the public in general, aren’t too keen on handling cash. In fact, most prefer to not even open their mailbox – even if they are certain a juicy casino offer or sweet pizza coupon is looming within. Of course, we know only one of those two offers could actually be redeemed right now anyways, but the aforesaid facts help illustrate our point. Obviously we all know nearly all casinos have been closed for at least two months, and for the most part, direct mail offers to are non-existent during this time. With all things considered if there was a time to move away from physical direct mail, now is the time to do it. Right now, the public for the most part is fairly accepting of new ideas and safer methods of living as it could help restore some sense of normalcy.
Reason 3 Convenience
There is no question that receiving a push notification or email through an IOS or Android-based phone is faster, less expensive, and more efficient than waiting for a piece of snail mail to be delivered across the country. Many casinos even deliver mail to Canada for inactive players. Imagine being able to views/redeem offers, locate the closest casino, and receive updates with a combination of useful – free casino APPs that provide data in realtime. Not only would we have less wasted materials which is better for the environment but we would have less wasted time all the way around. And let’s face it, time is money. Additionally, gambling is about instant gratification. These innovations could lead to more unique instant electronic bonuses, better rewards based on frequency, ADT, and time on device. Let’s not forget there is less room for human error.
Here are some additional details about the types of different direct mail pieces and the expense associated with them.
Types of direct mail
- Casino Event Invites
- Casino Promotions & offers
- Birthday Acknowledgments
- Player/VIP Prospecting
- Important Event reminders
The highest costs associated with direct mail
- Type of delivery i.e. bulk, first-class, etc.
- Internal Labor to design and external labor to produce (the mail-house)
- Liability (offer expense)
Will the digital coupon be perceived as less valuable or tantalizing if you can’t touch it? For some casino players, the answer is yes. For others, the only mail they receive is the undesirable casino mailer. Sure they may not event redeem it, but some still look forward to thumbing through the hodgepodge of cool art and colorful fonts. The biggest challenge may be converting the core demographic of 50 plus-year-old patrons (who usually have the most disposable income). Like any new concept, the process will surely come with its own set of challenges.
What do you think will happen next? Should casinos do away with direct mail offers?