Wednesday, November 11, 2015

The Macau casino market has been taking severe blows for seventeen months now. I had raised this possibility in my interview with Macau Daily Times a few years ago, and not many people gave me credit or credence for speaking to this scenario. I had also mentioned that the only way to grapple with impending declining revenues is to develop a strong consumer franchise while the going is still good.

In the current situation, what I find illogical is how all operators in Macau are dealing with revenue declines. They have cut advertising expenditures, not renewed contracts of capable consultants and newly employed executives, and tightened the belt on player reinvestment. It appears that in the eyes of many executives, sales cause advertising and not the other way round. At a time when customers are worth their weight in gold, they are being driven away with the so-called austerity move which makes the executive decision makers look good and puts a brake, albeit not very effective, on the decline in market capitalization of their company. But austerity at a time when marketing should be fortified is at best a short-term fix. This myopic strategy will take a toll on customer loyalty in the short-term and on customer lifetime value over the long-term.

If I were running a casino in Macau  (and I don't envy my good friends who do), I would focus primarily on making the customer experience better. I would increase my spending on player reinvestment. I would use my analytics capabilities for mass customization of my offerings. Rather than paying lip-service to concepts such as customer-centricity and customer intimacy, I'd change the corporate culture whereby marketing becomes everyone's job, and customer service becomes a part of every job description. Without an organic and cataclysmic culture change, some casino operators may not be able to weather the storms created in Mainland China and felt all over the world. Your thoughts???

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