Direct: Hotel's Loyalty Program Pays Off

Byline: RICHARD H. LEVEY

Stephen Moore's "Aha!" moment came at Las Vegas' Treasure Island casino, one of the properties he runs as vice president of loyalty marketing for MGM Mirage. Moore saw a player at Treasure Island approach a host and ask for dinner reservations and tickets to a show. His request was refused.

"But I'm a $100,000 player!" the patron responded. Which he was - at Golden Nugget, a sister property with a loyalty program not tied in to Treasure Island's systems.

Players Club, MGM Mirage's loyalty program, enables the hotel operator to capture gaming activity and rewards behavior throughout its seven properties. A gamer can book a room at The Mirage, put his dinner at a Treasure Island restaurant on his room tab, play slots at New York-New York, get married in Bellagio's chapel, and have all points earned accrued to a single account. (The other participating properties are Beau Rivage, MGM Grand Detroit and MGM Grand Las Vegas.)

As legend has it, that incident was the catalyst for MGM Mirage to consolidate 17 different systems housed in 16 different databases - including hotel, food and beverage consumption tracking - into a single program.

Not that MGM Mirage imposed a cookie-cutter loyalty scheme. Where they differed, Carolyn Leveque, MGM Mirage's director of loyalty marketing, tried to retain their flavor. "We were not looking for a one size fits all, lowest common denominator program," she says.

One hurdle the companywide program faced was buy-in from the properties' managers, some of whom were wary of having rewards from customers spending money at one location redeemed at another. MGM Mirage recruited and trained program advocates at each site, and got approval from top financial officers.

Each property could have been ordered to implement the program, but management realized that front-line and midlevel executives have ways of hindering progress without actually refusing, such as not making opportunities to join front-and-center at each customer touch point, or not being quick to offer rewards.

The properties' trust in the Players Club has paid off. Play has increased 40% since the program's inception, Leveque says. She suspects this hearkens back to the Treasure Island experience: Participants realize they will be rewarded for keeping a larger share of their business within the MGM Mirage family, and are less likely to go out of network.

"As we are seeing throughout the industry, nearly half the revenue is outside of the games," says Terri Gaughan, a consulting program manager at The Colloquy Group, a division of program coordinator Frequency Marketing Inc.

Gaughan continues, "If you have a high-stakes player coming in and playing the games, he might get a free room, free food and beverages. But if you have a dentist from Des Moines who spends time playing the slots, but pays something for his room and pays full price at the gift shop, it's conceivable that the dentist is more profitable than the big player."

In addition to recognizing a customer's total value throughout the properties, MGM Mirage recently began issuing a credit card that earns points toward rewards for purchases made at outside merchants. According to Gaughan, the jury is still out on the card's effectiveness as a loyalty-building tool.

"With resort casinos, the co-branded credit card is relatively new," she says. "We're not sure if it's viewed as a commodity in that space or if it's novel."

The cards are branded to each property, meaning that consumers can hold a Bellagio, Treasure Island or New York-New York card, for instance. This allows consumers who enjoy a particular location to have that affinity reflected on the card, rather than branding it with the corporate parent, which doesn't have a name that resonates as highly with participants.

Leveque does not receive credit card information on an individual level, but Visa gives her aggregated top-level data, such as the states users are from and the merchants they patronize. Buffets and retail stores represent a large percentage of transactions made on the card.

"I'm thinking I need to restructure the value proposition of the program to reflect more [buffet and retailer rewards]," she says.

The company does not append data to Players Club participants, preferring to rely on basic name/address/date of birth and captured transaction information. And the company is leery of using lifestyle or psychographic information to find potential look-alikes. Moore tells of following non-gaming data to an illogical conclusion.

"People who own car dealerships love to game," he says. "No system told us that. Relationships with people told us that.

"A large segment of car dealership owners own private planes. Therefore, private plane owners should be good gamers, right? But it's not true."