3



ANALYSIS OF

THE TABLE MOUNTAIN CASINO

CLUB CARD PROGRAM

October 7, 2006

MBAe 211: Management Information Systems

Sasan Rahmatian, Professor

Team Members:

Leisa Biggers

Jim Bishop

Aaron Hartwig

Barry Mortichesky

Allysunn Williams

TABLE OF CONTENTS

1.0 One Sentence Summary 1

2.0 Executive Summary 1

3.0 The Existing System 2

3.1 The Business 2

3.2 The Structure 4

3.3 The Business Variables 5

3.3.1 The Mission Statement 5

3.3.2 Objectives 5

3.3.3 Performance Indicators 8

3.4 The Information 10

3.5 The Data 21

3.5.1 The Operational System 22

3.5.2 Data Generation 25

3.5.3 Data Storage 27

4.1 Analysis 28

4.2 Feedback 29

4.3 Conclusion 30

1. One-sentence Summary.

The Table Mountain Casino’s (The Casino) Club Card Program drives patronage and develops guest loyalty through rewards and optimum guest service, which results in increased revenue and profits.

2. Executive Summary

The Casino launched the Club Card Program in 2003 in order to reward guests for their play and to gain insight on how to optimize guest service. Modeled after the frequent-flier programs offered by the airlines, the Club Card was designed to provide incentives to visit the Casino. Data on Club Card activity confirms that the 80/20 rule applies -- 20% of our guests account for 80% of our revenue. While the Casino certain markets and rewards all guests, it is the Casino’s desire to significantly reward the top 20% of the guest population to ensure their loyalty and repeat business.

The first step is the extension of rewards to guests to continually encourage and entice them to patronize the Casino. Some of the rewards that are offered to the guests are:

• Cashback or Cash Mailers

• Food Complimentary to the Restaurant or Buffet

• Tickets or Discounted Tickets to the Entertainment Events

• Logo Merchandise

The guest’s perception of the reward will determine the value to them, so it is very important the Casino understands the wants and needs of Club members. The Casino takes steps not to offend a Club member by offering a reward that is not commensurate with their level of play. The process of appropriately rewarding a guest for their play while maintaining a healthy profit margin is a delicate balancing act.

Data gathered from the Club Card, when turned into information, provides fodder for management reports and subsequent feedback that greatly enhances the Casino’s ability to service the guest. When the Card is used, the member’s detailed information is captured in the database and informs the Casino as to guest preferences and behaviors.

For example, the Casino can query the database to determine what type of machines or what denomination the guest historically or habitually plays. Using this data, the Casino can add or eliminate certain slot machines. Alternatively, the Casino could use the data to identify what the guest’s tendencies are, thus the operation could better anticipate a Club member’s play habits and use this to entice additional plays or visits with targeted, behavior-specific promotions.

In conclusion, the Card contributes to the Casino’s guest-related knowledge, thus acting as an essential business driver. After all, for the Casino, the ultimate goal is to increase guest loyalty which ultimately results in increased revenue and profits.

3. The Existing System

1. The Business

Founded in 1987, Table Mountain Casino is a premier gaming facility, providing an entertainment experience with 2,000 Slot Machines, 36 Table Games, 9 Poker Tables, a 500-seat bingo hall/event center and two restaurants (a buffet and a coffee -shop). The operation employs 1,100 employees who operate the Casino 24 hours a day, seven days a week, 365 days a year.

The Casino has spent a great deal of time and money training all employees to provide its guests with exemplary guest service. The Casino has the following three significant competitive advantages over our competitors:

1. Location in relation to Fresno;

2. Perception of winning by most guests; and

3. Superior guest service.

The Casino enjoys robust business every day of the week but we do see increased visits from Friday afternoon to Sunday early evening. It is of great importance to peak the peak of our business but we also try to offer an incentive for our guests to make an additional trip during the week to help fill the attendance valleys. Additionally, the Casino does not have true seasonality throughout the year. There are no months where the operation truly performs better than any other month. This makes it difficult to evaluate marketing, advertising and promotions, thus rendering the Club Card Program as the only effective tool in evaluating our promotions.

Our competition consists of any entertainment facility in the Valley. There are two direct, industry-specific large scale casino competitors, Chukchansi and Tachi Palace. There are several smaller casinos that are considered competitors, such as Mono-Wind, the 500 Club, Club One, Eagle Mountain Casino, and Black Oak. Currently, there are several proposed Casinos in the Central Valley, with one proposed as close as one mile from Table Mountain and the second located north of Madera.

The market includes all residents of the Central Valley. Currently, the Casino’s most prominent demographic is the region’s blue collar worker population who reside or work within 50 miles of the property. As reflected on the attached map, the population within 50 miles of the Casino is greater than 1.1 million, of which 48% is of Hispanic descent. Similarly, the Casino’s guest demographic is approximately 50% Hispanic, and the Marketing and Promotions department see opportunities to grow guest patronage within this subset. The Casino is interested in using the Club Card Program to cultivate lasting relationships with its core guests – usually the blue collar workers who are repeat slot players – which would lead to greater and more sustainable profit growth.

2. The Structure

The Executive Structure of the Organization

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The Finance Division of the Organization

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3. The Business Variables

1. Mission Statement

Our Mission is to maximize value of the Casino and to assure stability of revenue and growth. Our operation will maintain a quality, satisfying and enjoyable gaming experience for all our guests and a positive work environment for all of our employees. Our intent is to market the property to local and regional market gamers, to obtain superior returns and create further business growth through property expansion. Our goal is to remain first choice for Casino gaming in Central California by all guests and be the recognized leader in revenue and guest satisfaction.

Vision

Guest

Honesty

Trust

Leadership

Results

2. A. Objectives

The major objective of the Planning and Analysis Department is to provide Senior Management with the appropriate information to make strategic and tactical business decisions for the property. This is related to the mission statement segment that discusses creating a satisfying experience that translates into a yield of superior returns, ensuring revenue growth for the property, thus maintaining its status as the leader in revenue.

While the overall objective for the Planning and Analysis Department is broad, the objective for this project is to use the Club Card Program to increase information and knowledge of the guest’s activity and expectations allowing senior management to better market to and service the guest. This objective, if successfully executed, generates guest loyalty. This type of evidence-based, decision support system is utilized here and by several of our competitors, to fine tune our marketing and guest services strategies to encourage guests to come back.

The hierarchy of objectives is as follows:

1. Increased Revenue and Profits through the Club Card

2. Increase number of Club Card member visits to Casino

3. Increase dollar play of Club Card member per visit to Casino

4. Increase number of Club Card members

Below is the Guest Loyalty Marketing Model used by the organization which demonstrates how analysis influences and provides the feedback to the Marketing Committee. This information is used to inform the Marketing Committee design of the rewards for the guest and the training programs for guest service. Finally, the rewards and service create loyalty and loyalty creates growth and profits.

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B. Objectives – Critique & Redesign

It appears the objectives are well-defined for the Casino. We believe that increased revenue and profit is the correct end objective and is comparable to the end goal for other for-profit organizations end goal. Further we believe the second, third and fourth objectives are the means supporting the Casino’s end objective.

We have designed a new hierarchy of objectives that accurately depicts the pictorial view of the objectives. While the Guest Loyalty Marketing Model is used at the property, we believe the following hierarchy of objectives is a viable alternative.

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The population within a 50-mile radius is 1,100,000. So, if 1% of the population visits Table Mountain for the first time, that would equal 11,000 visitors. Of the 11,000 first time visitors, 40%, or 4,400, of them would be existing gamers from other properties or markets; and 60%, or 6,600, of them would be potential new gamers. So the property needs to convert 75% of 4,400 existing gamers and 25% of the 6,600 potential new gamers to obtain 5,000 new Club members as stated in the KPI in the next section of the report.

3. A. Performance Indicators

Based on stated Objectives above, the following are corresponding performance indicators and standards for each.

1. Percent increase in both Revenue and Profits per month versus prior year month

Standard: 6%

2. Total number of Club Card member visits a month versus prior month

Standard: One tier higher

3. Total amount of Club Card member dollar play a month versus prior month

Standard: One tier higher

4. Total number of new Club Card’s issued a month versus prior month

Standard: 5000

Club Card Tier Summary

The standard for Performance Indicator 4 was established based on the average historical data of member play per visit and number of visits, which in turn leads to meeting standard for Performance Indicator 1. The marketing promotions for Club members are designed to increase amount of play per visit, as well as number of visits to Casino, placing them in a higher tier. Ultimately the

Club Card member program is trying to create a greater theoretical value of member for the Casino that drives revenue and profits.

B. Performance Indicators – Critique & Redesign

In general, we agree with the Performance Indicators as formulated by the Casino. The current Performance Indicators provide a solid basis for the operation to determine progress in meeting objectives. All of the indicators are clearly defined and easily measurable from captured data. Furthermore the performance indicators align well with objectives of organization.

As a group, we agree with the process by which standards were set. The revenue and profit standard was established by senior executives to ensure growth and therefore maintaining the position of leader in revenue versus other local casinos. The standards for performance indicators 2, 3 and 4 were established by the Marketing Focus Committee to align with strategic and tactical marketing programs.

However, we do not agree with the standards themselves. The standards for performance indicators 2 and 3 are too aggressive and require more definition. In essence, the standards measure upward movement of everyone in one tier to the next higher tier in one month’s time. Hence if the Casino staff were to meet these standards six months in a row, everyone in Tier G would be in Tier A; virtually adding over 6000 members to Platinum Club. In reality, the Casino executives are extremely pleased if one person a month is added to Platinum Club Tier. Therefore standards for performance indicators 2 and 3 should more closely relate to increasing the number of Club members in all tiers, or should be modeled after actual tier movement figures.

In addition, there may be too many tiers so the guest perception may be unclear as to how to move to higher tiers. Harrah’s Casino, for example, has only 3 tiers, diamond, platinum and gold, with respective rewards for each. There is a clear understanding of what is required to advance to the next tier, and guest aspire to reach the next tier. Table Mountain might consider consolidating tier levels toward this end.

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This chart signifies increasing the total # of members in all tiers.

4. A. The Information

Consistent with the status of a large, competitive, gaming venue, the Casino is collecting immense amounts of data. Within the scope of the Financial Analysis & Planning Department, surrounding and supporting the “Club Card” operations Table Mountain Casino is collecting DATA as follows using the IGT Advantage system which will be explained later.

The current flow from DATA to INFORMATION at a high level looks like this:

The data follows a direct flow, and utilizes three main entities.

1. Card readers placed on each machine

2. The IGT Advantage system, a data collection mechanism for the card readers

3. MS Excel, in which TMC gathers the data, and produces the Management Information

While focusing on The Information, this portion of the report will:

1. Proceed thru current situation, with analysis of the several reports in use

2. Critique & redesign the information sets, and

3. Conclude with a revised scenario and explore the benefits gained.

On a detailed level, the pertinent pieces of data that we see transferring to information are as follows: For each card strike:

➢ User number

➢ Machine type

➢ Dollars Played

➢ Time Played

➢ Number of Plays

➢ Count of “visits”

➢ Payouts ($)

Downstream of the IGT Advantage System reports are deployed in Excel.

An analysis of the three Management Reports used by the Financial Analysis and Planning Department follows.

Report 1:

Report titled: Tier Summary (inset: Table 1)

This is a simple analysis showing monthly summary dollars per tier member count.

This report directly supports measurement of the KPI:

• Increasing the number of cardholders to goal of 5K per month.

It also shows the bracket criteria for each tier, this is not in direct support of KPI, but is useful. Additionally, there is a somewhat misplaced, but useful mention of the current incentive distributed to each tier, the Cash Mailer Value.

Important elements:

1. Column A: Tier identification:

Tier A is the highest based on theoretical winnings, K the lowest.

2. Column B: “Theoretical Win” tier division criteria.

NOT actual winnings. It is possible to be in tier A, but never won $1.00.

3. Column C: Cash mailer value

This is the cash value of the current incentive.

A guest can bring the mailer to the Casino and receive this cash value.

4. Column D: Count of cardholders per tier for the month of the report summary

From this report, the Planning & Analysis Department is able to track their total number of cardholders and their relative tier ranking. It is limited in its scope, however what it lacks in merit, it makes up for in simplicity for later discussion.

Report 2:

Report titled: Daily Revenue Report. Abbreviated DRR (inset Table 2)

The “Summary” page is a two-sided report, reading from the left portion it shows daily total revenue vs. plan and quantifies the variance. On the right it shows a “vs. yesterday” performance and the total variance.

The intent of this report is to monitor the KPI:

• Increasing revenue/profit 6% monthly

Important elements:

1. Column B & C: Total daily revenue vs. plan.

2. Column D & E: Variance monitoring. A good visual for trend monitoring

3. Column I: Not as significant as the others, vs. yesterday can show comeback or slumping.

This is a useful report for an accounting office, but the lack of clear connection to the KPI is an issue.

Report 3:

Report titled: Tier Analysis – Response Statistics - Master Workbook (inset Table 3)

This is an important, extensive, and highly detailed report. However, the report is too large for a numbering system like Report #1& 2, so I will overview the varied areas and describe what they are in general, highlighting only the pertinent points.

• Report 3a contains three major sub components

First, a summary sheet that is very heavily formula driven to quantify the values generated by the “players who redeem vs. the players who don’t”.

This is directly connected to the KPI of:

• Increasing the # of trips/month

• Increasing play/trip

This summary sheet is targeted at “high level” members wanting more of a bottom line summary than a detailed analysis.

Much greater working detail is available from the monthly reports feeding this summary report.

• Report 3b (inset Table 4a, 4b, &4c)

This is the upper portion of the monthly detailed worksheet. It has pertinent cardholder tiers in rows, matched with pertinent business information in columns.

In this portion of the report can be found such detail as:

• Redemption rate per tier

• Summary revenue statistics per tier, and

• The cost related to the incentive, again per tier

This adds detail measurement for the KPI’s mentioned, although it is not intuitive.

• Report 3c: (inset Table 5)

The third sub-component of the report takes the detail of the revenue in (Coin-In) and shows Management where it is falling in relation to “Slot A, Slot B, Etc and Table A, Table B, etc.

The intent of this report is to link the guest, the guest preferences, and the incentive result back to the revenue result.

B. The Information – Critique & Redesign

The Financial Analysis & Planning Office has known success to date with the current reports. However there is room to grow and much to be gained.

General performance summary:

• Frequency: Insufficient. The pertinent, useful data is monthly. Daily indicators relevant to the KPI are not present.

• Level of Aggregation: Low. No KPI comparison data is processed within the reports, it must be done manually.

• Form: Not Optimized. All reports are numeric only. No graphics. The reports are difficult to read.

• Content: Average. There is a lot of data. Too much actually, It is difficult to pick out what is important.

Report 1:

Reformat the report for additional monthly numbers, as well as targets.

(Inset table 6)

This format also enables charting progress to multiple comparison points:

(Inset chart 1)

Finally, extend addition to the report, to accommodate the calculation of growth statistics

(Inset Table 7)

This report is now more robust, can offer more information for extraction, and options for presentation. Most importantly, this method aligns more with the KPI measurement.

For the KPI objective of increasing # of Card Holders 5K/month we can see that from August to September this KPI objective was attained.

Report 2: (inset Table 8)

Reformat the report to separate out daily revenue monitoring and have the new format accommodate on board measurement for increased revenue KPI by adding a cumulative to target. Since the KPI is imbedded in the monthly plan (increase revenue 6%), adding a line graph showing target and achievement to target is simple, but classic; most importantly It is easy to read and the KPI line can be added to the same graph.

Adding the graph for summary will allow us to visually analyze if we are hitting the KPI or not without digging thru the numbers.

(Inset chart 2)

Report 3:

Redesign concept:

Because of the complexity of the report, a different approach is needed.

This data seems to be an almost perfect candidate for implementing a relational database.

The flow of data will be modified to:

The relational (Access or SQL) database will have tables such as:

Table-Cardholders - Cardholder info – Primary key being the unique card ID

Table-Slots-games

Table-Table-games

A sample idea of the tables looks something like this: (inset Table 9)

As can be seen in the “cardholders” table, information can be added easily.

From these types of tables we can make several queries, such as:

Query-Transactions - Appending transactions from card strike information

Query-KPI-measures – adding in expected performance criteria to match actual.

The queries will feed reports, which can be written and revised easily, without balancing formulas across many Excel sheets.

Most importantly, the information gathered will allow the reports to be structured to clearly measure KPI objectives for:

• Increasing the # of trips/month

• Increasing play/trip

Benefits gained:

We now have both more robust reports, and also a relational database to draw upon.

It is entirely possible that the database will supplant some of the reporting that exists in Excel, which represents an opportunity for future growth.

Summary of specific points gained by redesign:

• Visibility (charts!)

• Readable, intuitive formats

• Information separation, no confounded numbers

• KPI objectives incorporated onto reports

• A relational database capable of growth

Other opportunities for improvement that were addressed in redesign for functional management:

• The Excel reports were not well designed to clearly and directly support any single business KPI, they were in use because they had evolved into the role with additions being cobbled on as required.

• The previous reports were not “user friendly”. They required someone trained to “drill down” for key elements of information, which is neither apparent nor easily discernable.

• The reports do not present the key elements next to the comparative KPI and result.

In conclusion:

The amount of data available to the Casino is immense, however not all of the key elements were apparent in the information produced. We made a few minor changes, and a structural modification which will require a little getting used to, but will result in better business support and information processing now and for the future.

5. The Data

The following is the Table Mountain Casino’s operational system with the information produced by the MRS to provide feedback from the transaction processing system via the database:

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3.5.1.A. Operational System

The big picture of the Casino’s operational objective for guests to visit the property, enroll in the Club Card Program, increase guest visits, and increase guest plays per visit with each positively impacting The Casino’s operations. The end result is increased profits and revenue. A step-by-step explanation of the detailed operational system is as follows:

A Guest Visit triggers the business process. Upon entry into the Casino, the business triggering decision activity is contingent upon the guest’s status as an existing Club Card member or a prospective Club Card member. Existing Club Card members proceed to the Casino game of choice and elect to use or not to use their Club Card during plays. An election to use the Club Card allows for plays to be tracked and rewards to accumulate. Data from these activities is collected and stored in the International Gaming Technologies Advantage System database (IGT). No data is collected on existing card members do not use their card. Feedback is subsequently provided to the Marketing and Promotions Department which essentially implement methods to encourage card usage. Thereafter, existing Club Card members receive marketing materials directly.

Prospective Club Card guests or non-existing Club Card guests entering the Casino decide to either enroll in the Club Card Program or not to enroll. If the decision is to enroll, the new Club Card member’s activities thereafter mirror the above mentioned activities for existing Club Card members. This data is also stored in the IGT database. No data is collected on guests who choose not to enroll in the Club Card Program. Nonetheless, Marketing and Promotions continue its marketing campaign by promoting the Club Card membership to non-members and to those who reside or work in the surrounding the Casino community by saturating the local community with direct mailers and advertisements. This data, however, is not stored in the database.

Through continuous use of the Club Card, plays and visits are tracked and stored in the IGT database. The tracking system calculates accumulated reward points. The reward point accumulation is an incentive to increase plays and to engender loyalty through increased visits. Rewards accumulated are stored in the IGT database. Club Card members with accumulated reward points have the option of redeeming points for a reward or maintain and/or increase their point balance through increased plays per visit. Rewards redeemed result in a received reward and data from both activities are stored in the IGT database.

When the accumulation of reward points appears to have little to no influence on Club Card member visits or plays, feedback is provided to Marketing and Promotions with subsequent promotional alternatives implemented to capture and redirect the behavior of the Club Card member. This data, however, is not stored in the IGT database. The accumulation of rewards through increased plays per visit or increased number of visits is the incentive employed to reach the ultimate goal of increasing the Casino’s revenue and profits.

3.5.1.B. Operational System Critique and Redesign:

The current operational system for the Club Card Program appears adequate in assisting the Casino with reaching its objective to increase profits and revenue. Adequacy, however, raises the bar moderately high. The Casino must expand its data collection to include more personal and guest identifiable factors. In addition to its current collection of names, addresses, ages, etc., the Casino must include details about personal gaming expenditures and which games they prefer. Doing so will not only create loyalty, but will cement a more personal bond between the Casino and Club Card Members by establishing a customized marketing approach.

Another recommended system redesign is to have a promotional Club Card program awareness marketing blitz on a periodic basis. TM currently relies on happenstance for promoting the Club Card Program. That is, guests find out about the program because they stumbled on it. A Club Card Awareness Program leaves nothing to chance. It is a deliberate and strategic plan to increase and solidify loyalty. The awareness campaign will be effectuated by strategically positioning Casino staff at Casino entry points to display or provide program information pamphlets to entering guests. This is not only an opportunity for staff to explain the program, but to make a connection with the guest and influence returned visits. A method for discerning whether increased enrollment occurs thereafter should be implemented with data collected and stored in the IGT database. Marketing and Promotions will receive this feedback and evaluate the type of methods proven to be effective and during what time periods Club Card membership enrollments are increased.

When marketing and promotions receive feedback that guests are not enrolling in the Club Card program, instead of only saturating the community with promotional enticements through direct mailers and advertisements, TM should adopt the following; 1) New Club Card enrollee’s should be asked how they became aware of the program; 2) This data should be stored in the IGT for feedback providing which marketing activities work and which do not; 3) Collect special information about guest aimed at making a more direct connection with them; 4) Eliminate marketing methods that are marginal performers. This will do away with unnecessary expenditure and add to the revenue and profit increase.

Finally, TM must focus on methods for refining its relationship with its core members, generally those who have an affinity for slot machines. The objective is to ensure a long lasting relationship by studying collected data that demonstrates behavioral tendencies and subsequently adopt a multi-prong strategy to retain their patronage and solidify loyalty. A SWOT analysis can be instrumental in determining which multi-prong strategies to adopt.

3.5.2 A. Data Generation

The initial data generation stage, when a guest enrolls in the Club Card Program, provides guest-specific information: name, address, age, phone number, email (optional) and date of registration (see attached registration form). During this stage, general background information is gathered which provides information that will later be used to contact guests for marketing purposes; i.e. special events, offers, and promotions. Although information is rather basic it does provide some insight regarding guests coming to Casino for entertainment.

The next stage of data generation is when a guest uses their card while playing a machine or table game. During this stage, several valuable pieces of data are being captured regarding guest play:

• Which machine they are playing

• How long they played

• How fast they played

• How much money they played

• In what denominations the bet, and

• How much they won.

Furthermore data is captured regarding visits to the Casino. In summary, member play data is cumulative and visit data is singular; i.e., if a member visits and plays at the Casino twice in one day it is measured as one visit, even though they left and came back.

The last stage of data generation happens when a guest visits The Club to convert points earned into cash; for every $1 played $.01 is gained in points. Further-more, during this stage information is gathered when a guest applies points to Table Mountain purchases within Casino; i.e., paying for items at gift shop, buying meals at restaurant. During this stage, the Casino gains knowledge as to how the guest is redeeming points, and thereby how to market better to the individual guests.

[pic]

B. Data Generation – Critique & Redesign

We feel there is great room for improvement in capturing and recording data about the Casino guest population. To begin with, email needs to be required during member registration. Today the Casino does the majority of Club Card member communication through regular mail. Through utilization of email for primary communication, marketing costs would be greatly reduced. Second, the IGT Advantage System has numerous open fields for definition which are not being used for collecting member data, which if captured would allow the Casino to develop stronger marketing programs. Third, member visit data needs expanded to include time of day and day of week at a minimum. Currently the only data generated is number of visits per month.

New data generation stages should be created to capture entertainment interests of member and factors affecting the Casino’s guest volume. Today the Casino does not capture data when a member attends entertainment events at its facility. This data could be used by marketing to ensure successful marketing programs for member. By appealing to members’ unique preferences, the Casino would increase amount of play per visit, as well as number of visits to the Casino further driving revenue and profit.

Furthermore, data needs to be gathered which has impact on daily guest volume in the door; i.e., weather, holidays, other events in town. Currently the Casino only tracks daily guests in the door, and has no trigger to identify cause of fluctuation in volume. This data would allow Casino to assess whether or not an internal process requires improvement or something exists outside their control.

3.5.3 A. Data Storage

The information gathered in data generation is organized and stored in IGT Advantage System. The data is organized in the following six tables:

1. Patron management 4. Cage and credit

2. Table games 5. Ticketing in-out

3. Slot machines 6. Player tracking.

The data is linked within tables by the unique Club Card member number. Because each member has their own number, a consistent variable exists between tables.

Data Storage Diagram

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3.5.3 B. Data Storage – Critique & Redesign

From our perspective the data is being organized and linked in the right way. One suggestion is for Casino to have back-up database in the event IGT Advantage System were to fail. If this data were lost there would be a significant amount of member history lost which could not be replaced.

4.1A. Analysis

Recently, aggregated data from the Daily Revenue Report (DRR) yielded “negative news” in that one month’s revenue receipts increased only 1% over the prior year month. The standard for this objective is 6%, as discussed in the performance indicators; thus the 1% yield raises a red flag for the CFO and results in the generation of a host of queries in an attempt to improve next month’s performance by pinpointing the impacts.

The first step in the analysis of the DRR is to rerun the data to ensure the dates and figures are correct. Variables from other reports that are examined include:

1. Head Count

2. Coin In

3. Hold % of slot machines and table games

4. Tier A&B Activity

The Head Count Report with daily, weekly and monthly data is reviewed first. If the head count numbers do not meet target, this results in a notation to marketing and promotions for follow-up. There are many environmental factors affecting Head Count, such as weather, competing events, etc., but this is an important data point and accounts for the entire guest pool. The Casino needs people to visit the property in large quantities so they have the opportunity to make money. Head Count is directly and positively correlated with monthly revenues. The CFO has used regression analysis to prove this correlation.

Next, the CFO reviews the Coin-In statistics for the month, comparing it to the monthly average and analyzing the report for daily variances. If Coin-In is low, it suggests that volume of play (for the total guest pool, both non-Card and Card Members) is not at the level it should be and that is cause for great concern. Low coin-in means that even if the guests are there, they are not playing and we must find the reason. Was there an event in town? Was there poor guest service? Did we not have the right slot machines available?

Also, the Cash Mailer Report is also reviewed to note the numbers of promotions redeemed and if these numbers are low or below target, adjustments are made in an attempt to incite guests to make additional trips to the property and increase their plays. Marketing and Promotions will be asked to provide feedback on whether the right offers were made? Was the dollar amount of the mailer equal to their play or appropriately calculated? What other factors, such as competing events, might have inhibited the Casino’s promotions?

Subsequently, the Hold Percentage of the slot machines and table games in reviewed in a separate report. This Percentage can have a significant impact on the monthly revenues. If the Hold Percentage is low, the machines have been making (perhaps excessive?) payouts which translate into reduced revenues on a daily and monthly basis. In response, the CFO would normalize the revenue to see where they should have been. They know that slot machines will return the hold to the correct theoretical hold percentage, so it is only a matter of time until this would correct itself. If the normalized amount is good, then there was no problem. This step is conducted last because it is important to monitor volumes in Coin-In and Headcount. If those two check out, then the reduced revenue is most likely linked to the hold percentage.

Finally, there is a review of the number of Platinum Players, Tiers A&B, who gamed that month. If that number is below benchmark, Marketing and Promotions will tweak the incentives and tailor a specific strategy to encourage increased patronage of the Platinum Guests.

The data in each of these monthly reports are drilled down to daily statistics and are mined for aberrations or significant variances. Currently, there is no drill-down mechanism, this review of reports and data is essentially an intuitive process.

4.1B Analysis: Critique and Redesign

Given the data resources available, the information appears to be analyzed properly even though it is an intuitive process. There are many factors that contribute to variances in revenues on a daily, weekly or monthly basis, including weather, competing entertainment, special events at the Property, etc. In order to improve upon the process, it might be useful to set daily targets and install data prompts to indicate to management if trends over days are developing so changes can be made on a daily or weekly basis vs. monthly.

Other suggestions would be to use the data in a more proactive than reactive way. The Finance Office could use it to start to predict future outcomes. With analysis, they could determine what should and would be expected from an event, holiday weekend, etc. With regard to tier movement, Finance could also better figure out how to predict and motivate players to move up in tiers and conduct analysis to determine what tier movement, up or down, is actually occurring. This action directly impacts revenues and is worthy of further analysis.

4.2A Feedback

The mechanisms used to provide feedback to operational levels include reports with raw data, directly lifted from the management reports discussed above. What typically follows is a discussion with the operations team members who include personnel from:

1. Slots and Table Games: The manager of this division then checks their labor numbers for the month in question, and examines the daily, weekly and monthly counts to ensure they had the appropriate ratio of staff to guests and are able to service guests as needed;

2. Marketing and Promotions: The managers from this division look at the Cash Mailer Report to examine the number of rewards redeemed or not. They adjust promotions and incentives accordingly to drive guest visits and plays per visits;

3. Food and Beverage (F/B): This staff then examines the numbers of guests served and compares that number to their monthly target. Historical data indicates that 25% of all guests eat during their visits to the Casino, which represents F/B’s monthly target. As a measure of improvement, they might make menu adjustments or may work with Marketing and Promotions to create F/B-specific promotions. F/B staff also examines their staffing counts as well, to ensure they had appropriate staff ratios for the month. This can have a significant impact on a guests’ choice to dine or not, and can impact their dining experience and overall visit. For example, if the food line is long, people may not eat at all, if there is a perception of inconvenience.

In these feedback discussions, the CFO drives home the interdependence of all these factors and their resounding impact on revenue received.

4.2B Feedback: Critique and Redesign

The feedback is provided in the right form, we believe, with raw numbers distributed via electronic report, and verbally, face-to-face in monthly meetings. While this seems appropriate, the frequency at which these meetings take place might need to be adjusted. If data is analyzed on a weekly basis and problems are indicated, then the monthly data might yield improved monthly outcomes. Some data need to be reviewed on a monthly basis vs. weekly basis, because trends are challenging to determine at short intervals.

Timeliness is critical and the operators/managers must have a handle on information prior to meeting with the CFO. They are on the floor and should be checking the information regularly.

Another opportunity for The Casino would be capturing guest communications via survey or focus groups. The Casino does not currently hear the voice of the guest and it would be vital to know what they think.

Because there is little seasonal variance, it is often difficult to predict guest behavior in any given month, let alone any given week or any given day, but staff-to-guest ratios and promotions mailed, for example, are clear factors that can be adjusted on a daily basis and may significantly impact revenue flows.

Conclusion

While the Casino’s Club Card program enables promotion of the operation; tracking of patronage plays, visits and preferences; and helps the operation to drive revenue, there are areas within the scope of the Club Card Program that would benefit from redesign and further analysis. It is our hope that The Casino considers the suggestions brought forth in this paper.

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President/

CEO

Exec. Director of

Gaming

Operations

Exe. Director of

Non-Gaming

Operations

Chief Financial

Officer

Senior Vice President

Legal Counsel

Director of

Marketing

Chief Financial

Officer

Controller

Director of

Cage

Operations

Director of

Count Room

Operations

Director of

Materials

Management

Director of

Information

Technology

Financial Planning

and Analysis

Accounting

Revenue Audit

Accounting

Warehouse and

Receiving

PBX

Track this number vs. last month total

Machine/Table

Card Strike event

IGT

Advantage

System

EXCEL

Reports

[pic]

Multiple days below plan. This trend needs investigation

Good data, but needs to have “expected” to be complete

From these variances, it looks like only ~50% redeem!

Both on the same report

Chart 1

KPI measurement

We can see what days are the revenue drivers and be ready

KPI measurement

Visual KPI

Analysis

Chart 2

ACCESS

(or SQL)

Machine/Table

Card Strike event

Reports

IGT

Advantage

System

Management

IGT Advantage

System

Visit Casino

& Play Games

Register

Member

Redeem

Awards

Casino

Guest

Guest with

Club Card

Name

Address

DOB

Phone #

Email

Hierarchy of Objectives

1%

60%

40%

25%

75%

Population within 50 miles of the Property

First Time Visitors

To the Property

Potential New Gamers

Attract Existing Gamers

Active

Club Members

4.) Increase in

New Club Members

3.) Increase in the Club Members Dollars Played per Trip

2.) Increase in the Club Members Trips to the Casino

1.) Increase in

Revenue and Profit

Produce

Management

Report

Visit and

Play info

Mgmt.

Report

Cash,

Food,

Prizes

Member

info

Table Mountain Casino

Club Card Registration Form

_____________________________ _____ ___________________________

Mr. Mrs. Ms. MI Last

_________________________________________________

Street Address

_____________________________ _____ ___________________________

City ST Zip

______________________________

Birthday

______________________________ ___________________________

Home Phone Cell Phone

Email _________________________________________

E

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