In the gaming industry today, understanding large volumes of customer data is critical to increasing share of each customer’s wallet. In an effort to create and sustain a competitive advantage, cutting-edge gaming organizations rely on predictive analytics to monitor customer behavior and increase customer lifetime value. With predictive analytics, an organization can better understand why customers take particular actions and anticipate what actions they might take in response to specific offers. This enables an organization to develop marketing campaigns to boost customer loyalty and profitability in every segment. Predictive analytics also enables an organization to predict and increase customer lifetime value.

How predictive analytics benefits gaming organizations
On average, 80 percent of a gaming organization’s revenue comes from the top 20 percent of its customers. Since today’s customers are more sophisticated than ever before, an organization may need to reassess how it identifies and retains its most valuable customers. Some visit property simply to gamble while others may dine at restaurants, stay in hotels, and attend events, in addition to playing slots or their favorite table games. Non-gaming customers, the fastest growing customer segment, also generate significant revenue.

In the past, organizations may have relied on reporting and analysis technologies to track a customer’s theoretical value and report on it. In addition, they may have created a number of customer segments based on data describing customer behavior and profitability. With predictive analytics, organizations can improve customer segments through the addition of feedback, text, and Web data, and consistently monitor actual customer behavior to recommend the best offer for each customer. They can also predict which low-tier and mid-tier customers are likely to become the next “high rollers.”

Predictive analytics combines advanced analytic techniques and decision optimization to inform and direct decision making. The evolution of customer analytics is shown in Figure 1.

Gaming organizations operating at Stage 3 and above are gaining a competitive advantage. These organizations use predictive analytics to forecast customer profitability, refine those predictions, and deploy that information across marketing channels and operational processes. The bottom line: greater numbers of profitable customers.

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