The Impact of Casino Loyalty Programs on Satisfaction, Emotional Binds, Loyalty, and Price Sensitivity

Customer online gaming on his laptop

When it comes to the world of casinos, loyalty isn’t just a virtue but a strategic game-changer. There is hardly any online or land-based casino that doesn’t offer some kind of a loyalty program, like the iRush Rewards program or any other like this. But do those programs really work, and how?

In the glittering realm of spinning wheels and high-stake bets, loyalty programs have become the secret sauce, enticing gamblers to stay, play, and keep coming back for more. A study led by Jonathan Barsky and Todor Tzolov from the University of San Francisco takes us on a thrilling journey through casino loyalty programs and how they influence casino players.

As the casino industry faced the recession trials and changed player behaviors, loyalty programs emerged as the knights in shining armor. These programs not only aim to keep the dice rolling but also to decode the preferences of the diverse casino audience.

The study, conducted using data from the Market Metrix Hospitality Index, unveiled seven distinct customer segments, each with its own set of preferences and behaviors:

  • High Roller — high spenders, frequent travelers, predominantly male, very high income. Usually non-members of the loyalty program, fairly satisfied with the casino services.
  • Elder Elites — Elite loyalty members, oldest, predominantly male, high income, sufficiently satisfied with the casino services.
  • Unmoved Members — Regular loyalty members, lowest satisfaction among all members but inclined to recommend and return, take shorter trips.
  • True Blue — Regular loyalty members, highest satisfaction among members and most likely to recommend and return, would pay a premium for the room.
  • Happy-go-lucky — Happy non-members, highly satisfied with service, optimistic about gambling, likely to recommend and return, young, average income, would pay a premium for the room.
  • Ice Queens — Hard to please non-members, not satisfied with service, pessimistic about gambling, unsure about returning or recommending, young, predominantly female, average income, rely on reviews for selection.
  • Accidental Travelers — Least frequent travelers, non-members, fairly optimistic and satisfied, youngest, average income, say they may return but seldom seem to do so.

After studying the segments, the research, which is one of the most comprehensive of its kind in the casino industry, found that customers who participate in casino loyalty programs are more likely to be satisfied with their overall experience and to be loyal to the casino. They are also more likely to feel a sense of emotional connection to the casino and to be willing to pay a premium for certain amenities. However, the study also found that loyalty programs can lead to customers becoming more price sensitive, as they may start to feel entitled to certain benefits and discounts.

The study’s authors suggest that casinos can design loyalty programs that are more effective by focusing on creating emotional connections with customers and by offering rewards that are tailored to individual needs. They also suggest that casinos should be careful not to make loyalty programs too complex or difficult to understand, as this can lead to customer frustration.

Overall, the study suggests that casino loyalty programs can be a valuable tool for increasing customer satisfaction, loyalty, and revenue. However, casinos need to be careful to design loyalty programs that are effective and that do not lead to customers becoming too price-sensitive.

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