Behavioral Science

8 Practical Business Tips We Can Learn From Casinos

by . May 27th, 2014

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Why Would I Want to Learn From Casinos?

Because if there’re two things any casino worth going to is good at, it’s keeping customers happy even as they’re bled dry, and making a ton of dough in the process.

While it’s true the addictive nature of gambling makes things a bit more straight-forward for casinos, running this type of venture involves an enormous amount of long-term planning and an attention to detail you won’t likely find in most other industries. Many of the principles behind what makes casinos so interesting are directly applicable to businesses of any size.

It doesn’t matter if you’re a freelance designer or artisan baker – anyone  can use the ideas in this countdown.

8.) Customer Loyalty Uber Alles.

Casinos generally tend to be in the same areas and have the same services. Differences between different establishments tend to be superficial. The house always wins in all cases. Regardless, gamblers tend to have a favorite establishment. Some might even have a favorite machine or dealer. What gives?

8 Practical Business Tips We Can Learn From Casinos - Customer Loyalty Uber Alles!
Casinos do everything to earn customer loyalty. Like any business, casinos rely heavily on repeat patronage – perhaps more so than other industries. Free food, free drinks, exclusive entertainment, and in some cases hotel accommodations are made available to loyal customers. It’s in these things or similar areas that they try to outdo each other. In this sense, the seemingly excessive spending is almost downright frugal in context.

Redditor xteneritasx explains his preference for one casino: “Caesar’s reward system is pretty boss. If you get to their top level (which admittedly, takes a s**t ton of money) they give you a free dinner for as many people as you want for any restaurant that the casino owns on your birthday. They will also fly you and one other person to any property that they have across the country for free and give you money for food AND drink. They will do that once a year. Free air fare, room, and board, for at least a week.”

What You Can Learn

You should always give your customers a reason – or reasons – to come back. Especially when your core offers are pretty much the same as everyone else’s. It could be something as simple as a loyalty program or a coupon for discounts on the next purchase.

This holds true even if no one else offers a product or service comparable to yours. How far do you think Time-Warner Cable and Comcast will fare once Google Fiber or similar services start to penetrate even deeper in the American market?

7.) Cater to ALL the Senses

8 Practical Business Tips We Can Learn From Casinos - Cater to all Senses
Even the smallest casinos tend to be spotlessly clean. A clean environment gives the impression that you’re being taken care of.

They also tend to smell very distinct. Top casinos all over the world often commission signature scents that help keep gamblers comfortable and allow them to associate a certain scent with a specific casino.

We can’t talk of smell without giving a nod to taste. Casinos are well known for bacchanalian buffets, attracting tourists in their multitudes with “free” food they’ve already paid for.

Casinos are also lighted in a very specific way. They’re often lighted almost in the same way you would light a living room. Casino lights tend to be soft – almost cozy, even. This sends a subconscious message that you could feel at home and relax.

Music played in casinos also tends to be soft, and somewhat cheesy – great for keeping you docile and putting you in the zone for a couple hundred rounds of blackjack.

Speaking of blackjack, casino cards and chips are always new. Dealers change cards at least once per day, and two or three times per day isn’t unheard of. This keeps the cards looking fresh and more importantly, keeps them feeling fresh. This can help reassure gamblers and adds to the impression a casino gives.

What You Can Learn

Sight and sound aren’t your only senses. Smell and touch for instance, are often overlooked way to reach out to customers. While you can’t touch or smell an e-commerce site, the same site can benefit from real-world promotions with flyers and business cards, and perhaps the occasional free cookies.

Speaking of cookies, bakeshops and confectioners rely on scents and samples to do most of their talking. It isn’t just food-related industries that use smell to their advantage either. The automobile industry for example, has taken to faking the rich-leather new “car smell” as new automobiles no longer use as much leather as they used to, and are more likely to use vinyl instead.

If nothing else, keep your establishment clean and free from anything that looks or smells (or tastes) off.

6.) Don’t Make Your Customers Think

8 Practical Business Tips We Can Learn From Casinos - Dont Make Them Think!
Casinos often offer free drinks – which can help customers be more impulsive. Lighting, music, and visual design are all meant to keep you mollified. Gaming room design is all about keeping you hooked on the action inside. They don’t even have windows or wall clocks, since these can  unwelcome distractions that shift your focus away from your game.

What You Can Learn

Your customer processes should be as intuitive as you could make it – even if it means limiting their options. Having a lot of options is pretty overrated anyway. No matter what your offers are, as a rule of thumb you should try to keep things as straightforward as possible.

5.) Make Your Customers Feel Like Winners

Casinos are notorious for gaudy, ostentatious visual motifs and cheesy happy music. Most people would never design their living spaces to look like a casino. Those things however, perform an important function – giving the appearance of fun, good times, and WINNING!

Tacky visuals, cheesy music, coins and chips clicking and clanging, gold-encrusted surfaces – everything is calibrated to make it seem like everyone’s winning, when the truth is the exact opposite.

This is why slot machines tend to play happy music even if you lose. With music like that, why would you keep losing?

What You Can Learn

Even when you deny customers and clients something, there’s almost always a way to make the most of it. Small tokens – when given properly, can help any business retain a positive impression no matter the situation. It will never hurt to have some class.

Or to fake it. I had a neighbor who was a passenger in a plane crash about 15 years ago. The airline gave him flowers and a fresh fruit basket every week for years. Even today, he talks about it like it was a good thing. Would probably have been cheaper for the airline to do that than to get sued and ultimately lose.

4.) You Control Time and Space.

8 Practical Business Tips We Can Learn From Casinos - You Control Time and Space!

“Turning day into nighttime,
Turning night into daytime.
If you see it once.
You’ll never be the same again”

– Doc Pomus and Mort Shuman for Elvis Presley’s Viva Las Vegas

Few things are harder to find than a legit casino with clocks. Casino gaming areas also tend to consciously lack windows to the outdoors. The lack of clocks and windows is intended to keep gamblers from realizing what time it is, hence ruining their losing streaks.

Sure, you could use a wristwatch – but you’d be surprised how few people wear wristwatches, especially these days when most people use their phones to help them tell the time. And speaking of phones, major casinos are notorious for not allowing electronic devices in gaming areas.

Casinos also tend to have convoluted floor plans. A lot of the time, you have to through rows of machines and gaming tables before you get to a buffet smorgasboard, restrooms, or hotel rooms. This all maxes out the chances that at least a few customers will stop for a couple of unplanned games.

What You Can Learn

As far as customer service goes, the perception of time and space – is perhaps much more important than those ideas themselves. Houston airport had such an issue recently, when they realized that there were an inordinate number of complaints about their baggage claim system.  They succeeded in lowering the average wait time to just eight minutes. The complaints however, persisted.

Analysts found that it took passengers a minute to walk from arrival gates to baggage claim and seven more minutes for their bags. Around 88 percent of the passengers’ time was spent just standing around waiting for their bags.

The solution? They positioned the baggage claim area so customers had to walk nearly six minutes to get to their bags. Complaints dropped to nearly zero.

People are pretty bad at estimating the impact time has on our lives. BUT we hate waiting.

More:  Why Disneyland is Freakin’ Awesome

Whether we’re waiting for a website to load or for a call to come through to the right people, we tend to abhor doing nothing. But distract us during that time and it’s not so bad.

Disney in particular, employs several strategies to making waiting bearable. It puts on side shows for guests in queue, it uses buildings and other obstacles to hide the true length of lines, and it routinely overestimates waiting periods so as to delight guests when they get to the Haunted Mansion ahead of schedule.

How you handle time and space can make a huge impact on your customer’s experience and give you more opportunities for an upsell – often at a negligible cost.

3.) Appearances Matter

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Like we’ve discussed elsewhere in this post, very few things in casino design are accidental. Everything is so clean, shiny, and reassuring – all intended to communicate easy money and a fun time. Fact is, hardly anyone is winning and not a few people are having very serious problems.

The interesting thing is – everyone knows this. Yet, people flock to casinos anyway, and the vast majority of them are just normal folks on vacation. Casinos are fun. Or at least they seem like it. How could they be anything else when everything in them suggests they are?

What You Can Learn

No one has any illusions about businesses being anything other than businesses. All of them are there to make a profit. But even though everyone knows this, it shouldn’t be blatantly that about money.

No one wants to see it that way.

A little pleasantness and familiarity can take you so much further than a cold, all-business approach.

2.) Take Care of Your Low-Rollers

While high-rollers get most of the attention, low-rollers are invariably also well taken care of. Following the Pareto Principle, low-rollers – mostly tourists or transienst as opposed to locals – often contribute the majority of a typical casino’s earnings – typically 70-80%.

To earn these customers’ loyalty in such a short span of time, casinos will often hand out a ton of freebies . Coupons and loyalty cards for meals, shows, and prizes can go a long way into convincing a gambler to stay in one particular casino instead of another.

What You Can Learn

Even if your income follows a “normal” Pareto distribution where 80% of your profits come from 20% of your customers, each customer remains a potential brand evangelist. Just because they didn’t buy anything the first time you met, doesn’t mean that they won’t later on. Customers that don’t make a transaction the first time around could very well refer you to someone else who’d become a long-time customer.

Plus, can you even afford to skimp on customer satisfaction these days? With social media the way it is, it won’t take much for one unhappy customer to create a disproportionately bad review.

1.) Keep Your Eye On The (Long-term) Prize

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While gamblers are all about short-time thrills, casinos themselves are anything but that. Nearly everything about a casino is subservient to its main purpose: to make money in a sustainable manner.

This is why they spend so much time and effort keeping everyone as happy as they can. Even when a casino gives out freebies, it’s always so it can get something back in the future.

What You Can Learn

Taking a short-sighted view of your business – whether you run a sole proprietorship or a large business employing hundred or thousands – is a sure way to failure in short order. It takes time to build something worthwhile. In many cases, building means ignoring things that are immediately profitable in favor of things that bring sustainable growth.

You’ll only need to recall the 2007-2008 Financial Crisis and the ensuing Global Recession to understand how short-term profiteering can be detrimental not just for small businesses, but entire economies as well.

Image Credits:

Thomas Hawk via photopin cc
Profound Whatever via photopin cc
garlandcannon via photopin cc
dullhunk via photopin cc
Jeff Kubina via photopin cc
jackol via photopin cc

 

What other business tips can we learn from casinos? Comment below!

ABOUT THE AUTHOR:

Arthur Piccio manages YouTheEntrepreneur and has managed content for major players in the online printing industry. He was previously BizSugar's contributor of the week. His work has appeared multiple times on The New York Times' You're the Boss Small Business Blog. He enjoys guitar maintenance and reading up on history and psychology in his spare time.

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