WHAT TO DO IF TIERING REGULATIONS CHANGE

Club managers at all levels have started to discuss what would happen if regulations around membership and loyalty program tiering led to either severe restrictions on how they operate, or even having them taken away completely. For many years clubs have used tiered loyalty programs to assist in building relationships with their members and differentiating their business from other competitors. From the player’s perspective, tiered programs reward their loyalty to a club in exactly the same way as loyalty programs in any industry operate, by the accrual of points or status based on their value to the business.

There is no doubt that if tiered loyalty programs were to be restricted or removed many clubs would need to restructure the way they operate membership and how clubs in particular, (I suspect casinos won’t be restricted), market to their regular members. So what happens if the goal posts move?

While many clubs operate tiered programs there are also many very successful venues that don’t. Often tiered programs don’t vary much from club to club, or have remain unchanged for so long that they don’t assist in differentiating the business. With a much tougher economic environment there has also been a tightening up of benefits that are offered in this way, and there are many restrictions already on what can be given as a “reward” in clubs that other businesses, such as airlines, banks and grocery stores don’t have to deal with.

The Drop recently spoke with Danielle Rayner to get some insight into operating a successful loyalty program that doesn’t necessarily require tiering to be effective.  Danielle is the inventor of the industry’s Points to Cash Spend loyalty system,   Gobsmacked Loyalty (GSL).  Around 30 per cent of GSL’s client base still don’t run any tiering and opt to just run the GSL points-to-cash spend offering as the basis of their loyalty program.

According to Danielle, “Venues are choosing to just run our system as everyone is then rewarded exactly the same way. It doesn’t matter how many points they earn, they are converted to an equal amount, which is added onto their re-loadable prepaid eftpos card.  Every single member who earns points can benefit, irrespective of the tier level”. Based on Danielle’s experience and knowledge of loyalty programs, she believes, “If a club’s current tiering program has to be replaced due to a change in gaming laws, a venue can still run their gaming specific promotions as another avenue to directly reward gaming patrons”.

Changes to the regulations may mean clubs need to reassess their promotional budget and push it towards those that actually spend in the venue. For example, a closer look at the costs of activities such as bingo and raffles may mean a reduction of expenditure if it isn’t assisting you with your gaming revenue. While clubs will always strive to provide a community space for all, the business still needs to be commercial or it won’t survive, so reducing a bingo day or raffle prize pool may be required if it’s not effective. Even simple strategies, such timing gaming promotions to ensure that you aren’t competing in the same time slot with a competitor with a bigger promotional budget, and looking at what you are offering as the prize in the promotion is important, as this is going to become the loyalty driver.

According to Danielle, Eftpos gift cards have also become very expensive. “There are some gift cards offerings in venues where club patrons are having to pay up to $6 for a prepaid eftpos card regardless of its value so they have no option but to take a limited gift card offering”.

Mark Malloy, from the Railway Hotel at Lidcombe, which has been running as the number 1 hotel in gaming revenue in NSW for 7 out of the past 8 quarters, says “treat all of your customers as platinum customers.  We don’t run any points program at all. We just treat everyone as well as we can and provide a great return to player on the machines. It is easy to do when you are a smaller venue, but the results show that it works”.

Mark Malloy’s point about treating everyone as a platinum customer is going to be a key trend if the regulations change around tiers. He doesn’t throw money at players to reward loyalty. He just ensures his staff treat players with respect, values their business, and builds a strong relationship with them. After all, this is all that tiering offers in a structured, but much less personal way.

If you want further information on how the GSL system can work for your venue contact Danielle Rayner on 02 8090 6533 or email at danielle@gslsolutions.com.au

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