Three Tenets of Club Management
The
past five years of the club industry in Australia has been marked by fierce
competition among gambling providers and rising regulatory constraints. With industry
revenue predicted to decline or stagnate over the next few years, navigating
this business environment would be a challenge for any executive. With the
right mindset, however, clubs are in a position to attend to initiatives that
would ensure sound financial performance and prosperity.
Capitalizing
on the turbulent macroenvironment will require strict adherence to three
precepts across the organization: (1) fact-based decision making; (2)
enlightened people management practices; and (3) providing a high-quality
customer experience.
Fact-based decision making
Clubs
are in an enviable position whereby their cash registers (EGMs and POS) also
double up as powerful instruments of customer research. Yet, there is a
tendency in far too many clubs to turn a blind eye toward the insights these
data can provide, and make decisions on past experience, intuition, and
managerial whim instead.
Data,
when properly analyzed, can provide answers to almost every pain-point any club
executive might face. From floor layout to player reinvestment, and optimum AEMP
investments to diversification of services offered, insights from primary and
secondary data should be the principal input for decision making.
While
quite a few clubs do spend some of their resources on customer and competitor
research, such research often lacks reliability and validity. Reliability refers to the degree to which
a test is consistent and stable in measuring what it is intended to measure.
Most simply put, a test is reliable if it is consistent within itself and
across time. To understand the basics of test reliability, think of a bathroom
scale that gave you drastically different readings every time you stepped on it
even though your body mass has not changed. If such a scale existed, it would
be considered not reliable. Validity refers to the degree to which the test
actually measures what it claims to measure.
For example, if the money a player drops into a machine is used as the sole
measure to test whether that player is a problem gambler, it would be a poor
test for gambling addiction. As a rule, all research should be tested for
underlying reliability and validity before any credence can be based on its
findings. Using invalid data for decision making can sometimes be a lot more
dangerous than having no data at all.
Enlightened people management
Andrew
Carnegie probably said it best, “Take
away my people, but leave my factories, and soon grass will grow on the factory
floors. Take away my factories, but leave my people, and soon we will have a
new and better factory.”
Clubs are social institutions and employees
constitute the public face of your club. A study by Mercer Consulting suggests
that around 70 percent of your guests’ perception of their experience is
determined by the attitude and behaviors of your employees. So, if there is one
lever you can use to attract more customers and retain them, look no farther
than the people you have working for you.
People management starts with organizational
culture—the norms, beliefs and practices that signals to organizational members
and others the “way things are done around here.” Peter Drucker, probably the
greatest management guru who ever lived, always said that “Culture eats
strategy for breakfast.” Great U.S. companies such as Southwest Airlines,
Zappos, and Nordstrom (or Mecca Brands and Mindshare in Australia) work hard at
developing and perpetuating a culture that is characterized by integrity, fun,
and customer-centricity. In order to have a right culture in place, management
should first assess the club’s existing culture. Then follows an arduous
journey toward determining which aspects of current culture you need to keep,
which ones to discard and which new elements to adopt and embed within the
organization. Cultural assessment and change is a complex scientific process,
and needs to be carried out and facilitated by experts in the area. For those
organizations serious about putting an appropriate culture in place, the
rewards are significant in scope and long-term in duration.
The
two main goals of putting in place a solid organizational culture are (1) to
create engaged employees; and (2) to provide employees unambiguous behavioral
guidelines. However, culture alone does not bring about ongoing employee engagement.
An
engaged employee is one who is “fully involved and enthusiastic about his or
her work.” Gallup Organization reports that less than one in four employees in
Australia are engaged in their workplace. Workplace engagement enhances
productivity, reduces absenteeism and conflict, and has a strong positive
influence on the customer experience. Club management can enhance employee
engagement by (1) Consistently demonstrating that management values its
employees; (2) Communicating a clear vision for the organization; and (3)
Demonstrate to each employee how their inputs contribute to the success of the
organization in a meaningful way.
Providing high quality customer
experience
Numerous
consumer surveys report that people are looking less to “things” and more to
experiences to achieve satisfaction with their lives. Be it a gaming or a
non-gaming customer, what she looks for when visiting your facility is an
enjoyable experience. The customer experience occurs across several touchpoints
or “moments of truth” whenever there is an interaction between the customer and
the club. Not all touchpoints are equally important in determining the
customer’s satisfaction (if not delight) with her experience. However, it is
important to understand each touchpoint during the course of the entire
customer journey and analyze the underlying elements that would make this
touchpoint proceed as intended.
One
effective and proven way to understand the customer experience is by designing
a service blueprint to depict the customer journey for each segment of
customers you serve. I have designed customer journeys for several large gaming
operations and the results in terms of customer retention and revenue generation
have been nothing short of phenomenal.
For each touchpoint in the blueprint, the following
components are teased out: (1) The physical evidence of service quality
witnessed by the customer; (2) the customer’s expected behaviors; (3) the
contact employee’s expected behaviors that are visible to the customer (frontstage
behaviors); (4) the contact employee’s behaviors that the customer does not get
to see (backstage behaviors); and (5) the support systems and staff behaviors
required for each touchpoint.
After designing the preliminary blueprint, the next
step is to flag current fail points and offer suggestions for correcting these
fail points so that the entire journey is more rewarding for the customer and
more profitable for the club. Inputs for the various touchpoints are gathered
by (1) Interviews with key staff personnel; (2) Participant/Observer activities
by the Consultant; (3) Company records; (4) Customer feedback; and (5) Informal
mystery shops.
The task of correcting fail points draws attention
to several existing lacunae in the service delivery process which need attention.
These shortcomings, inter alia, may be due to employee headcount, employee
training and motivation, standard operating procedures, technological
bottlenecks, or lack of understanding of customer needs and expectations. When
failpoints are corrected and each touchpoint constantly monitored, service
blueprints become living documents that can guide all major activities within
the organization to deliver a truly fulfilling customer experience.
Conclusion
This
article touched upon the three tenets of club management: fact-based decision
making, enlightened people management, and providing a high quality customer
experience. Volumes more can be written on each of these tenets. My main
purpose here is to sensitize club management to each of each issues so that
they become embedded in the DNA of management ethos.
_________
About
the author: Sudhir Kalé, Ph.D., is Senior Consultant with Bullseye Services (www.bullseyeservices.com.au),
a boutique firm that provides marketing consultancy and analytics services to
the club industry. He has written over 100 papers on the marketing and
management of gaming businesses . Sudhir has also consulted with clients on
five continents on matters relating to service quality, organization culture, market
research, customer service, and CRM. You can write to him at
sudhir@bullseyeservices.com.au.
Read my latest article in the Oct. 2020 issue of Inside Asian Gaming (pp. 90-95) if you're curious to learn more.