Helen Fletcher discovers how operators are working harder than ever to keep their customers coming back

Loyalty programmes are nothing new and all sorts of businesses have their own way of keeping our custom.

From coffee shops offering a free coffee and cake if you accrue a certain number of stamps on a loyalty card and hairdressers offering free products after a number of appointments, to retailers and supermarkets awarding vouchers to spend in store the more points you earn and credit card companies offering cash back on your account the more transactions you put through on your card - they all want our business and will do almost anything to keep us coming back.

The gaming and amusement industry is no different and today’s operator has to work even harder to keep their customers coming back. No longer is it enough to rely on good game play alone - operators need to be imaginative in their thinking and offer their players promotions and bonuses to suit them.

"The recession has created some serious problems for the arcade and FEC owners," said Elmac’s Tiziano Tredese. "Only the skill of the operators has allowed them to survive and thanks to new ways of managing the locations through loyalty programmes. When I supply a location with ticket redemption for the first time, I include a kit that contains all the necessary equipment to start up - even for those without any experience at all. It includes quick coin games, novelties and sport games, a ticket eater and management kit to take control of the operations and a showcase full of prizes of different values and types."

For Cory Haynes, who has a substantial amount of experience in the US amusement industry - previously working for Dave & Buster’s and now president and COO of Sega Entertainment, which operates the Gameworks brand of FECs, since the recession it has become more important than ever for operators to hang on to their loyal customers. "Trying to get new trials in today’s market is extremely difficult," he told InterGame. "There is so much noise out there it can be hard to be heard. Redemption machines by far attract the most repeat business, therefore we are always keeping an eye out for quick play exciting redemption games and have about 20 per cent of players who drive 80 per cent of our redemption business. With video we have some speciality fighting video gamers who come regularly so we try catering to their needs by having the latest fighting games."

Gameworks locations use a rewards program that utilises the play card to gather guest information. When the player purchases a play card they are asked if they would like to sign up to Gameworks’ Replay Rewards  - once a member they receive a bonus amount on their card for game play and throughout the year are sent emails with various offers and discount coupons.

Haynes also told InterGame that the company has been looking at various marketing tools to help further promote business and has found the internet to be very successful. "Our demographics are in line with heavy internet users," he said. "We are also doing some mobile phone text marketing and other social media marketing."

Tapping into the social media mainstream is certainly a step in the right direction when it comes to encouraging loyalty to both locations and products. Photo booth manufacturer Fantasy Entertainment, based in the US, has taken this idea and run with it on its latest product - BlabaBooth. Users are given a unique code at the bottom of their photo strip, which allows them to view their photos and videos online and then share them with friends through sites such as Facebook and so on.

"Players are naturally more loyal to locations rather than machines so features such as these are good incentives for players to go back to the machine," said Justin Burke of Sega Amusements Europe (distributor of the BlabaBooth).

"It is essential to draw players back and machine features are a good way of doing this - good operators will also understand that they need to give prizes back, while changing them regularly and keeping things fresh."
According to Andamiro’s Satinder Bhutani, it is essential operators tap into the social media mainstream. He told InterGame: "Operators need to be hip and get bold with the most desirable product on the market, promote ranking systems and after every prize is won create a ‘wall of fame’ so other players can see real winners.

"Be involved and innovative with what is going on in the community. Always emphasise the attractiveness and glamour factor when implementing marketing techniques in conjunction with your machine."

While European operators remain a little sceptical of the debit card system to say the least, they have become a popular way of attracting and rewarding repeat business, while keeping a handle on the administration side of things, in markets such as the US, Australasia and the Middle East and the number of players in the market is continuing to increase - the main providers currently include Coin Tech, Embed, Intercard and Sacoa.

For Santiago Barbero, sales manager at Coin Tech, based in Argentina, with the current economic climate customers are more likely than ever to go back and spend their money in places where they have been treated with the best customer service. "Customer loyalty towards a location relates to well-maintained machines, cleanliness and security," he said.

"Having a debit card system running at the location ensures a stronger customer loyalty due to special member benefits such as discounts and so on. Loyalty programmes are broadly recognised and are a widely implemented strategy for managing and reinforcing the company’s relationship with customers and sales prospects.

"For operators these programmes provide the information they need in order to know their guest’s preferences and needs, resulting in individual offers being put together and a stronger relationship between the customer and location. For this reason loyalty programmes are of the highest importance for operators in order to survive the global recession."

The Timezone Group, one of the largest operators in Australasia, has the advantage of having a debit card system provider within its group of companies. According to Sonaal Chopra, at Timezone retaining customers has always been one of its key focus areas. "Our high-powered Embed debit card system is a powerful tool to help us develop strong loyalty-based programmes," he said.

"Timezone operators on a strong loyalty tier system just as you see most of the airlines doing - our customers can graduate from an entry level card to a VIP card and thereafter aim for the gold, platinum and sapphire card status. Of course, the benefits keep scaling up as you move up the loyalty tier - loyal customers are the ambassadors of our brand and we take that extra step to understand their wants and ensure they have a great time."

##image2##

According to Embed’s Mark Easte, the principle tool used for loyalty in a debit card system is the card itself. It carries the brand and is a constant reminder to the holder that they have value on the card and should return to the location to use it. The system allows the operator to automatically recognise customer loyalty. "Creating a loyalty system that rewards guests well but does not burden the operator with manual tasks was recognised early on in our product development and the result today is a set of features that enable the operator to set quite specific loyalty programmes in place that run themselves," said Easte.

While locations have their own role to play when it comes to encouraging repeat business and player loyalty, there are some games that attract loyalty in their own right and while ticket redemption and large family attractions would be the most obvious choice for attracting repeat business - certain games in the video arcade sector can have their dedicated followers. Bandai Namco’s Tekken series is a good example of this - "Tekkenites" as Namco Europe’s John Brennan puts it, will flock to a known location once the game’s whereabouts are circulated via social networking.

"Players that are less focused on their game preferences tend to remain loyal to a location," he said, "buying entertainment time in a nearby venue. Retaining their loyalty will depend largely on the operator frequently reinvesting in their product mix, refreshing their offering to cover the right products at the right time."

Some video arcade games have benefitted enormously from card-based personalisation and loyalty systems and Raw Thrills’ H2Overdrive incorporates a keypad entry code system that allows players to record their statistics. "This allows peers to race against them in their absence and foments a rivalry that encourages repeat play and enhanced cashbox performance," said Brennan. "Essentially though, it’s the depth of game play and player interactivity that are the key ingredients behind revisits."

Konami is another manufacturer that has implemented player loyalty features through its online e-AMUSEMENT system. First introduced in Japan over nine years ago, Konami is now making plans to introduce the system into Europe, while keep costs to the operator at a minimum.

"Customer loyalty is not a new concept from a game developer’s perspective," said Konami’s James Anderson. "We always want to ensure our games receive as much repeat play as possible. Of course the downturn in the economy has compounded this need to a point where games must offer an incentive for a repeat play or visit. Sometimes this incentive can be as little as beating a high score, other times a more personalised experience needs to be presented to the player to induce repeat play."

The e-AMUSEMENT service is online, with internet rankings, head-to-head, real time battles and tournaments wile also developing online gaming communities and creating a social and competitive side to each title and the Konami brand as a whole. The system offers exclusive features and has many loyalty bonus features for core players.

According to Anderson, the advantage of the e-AMUSEMENT service is that both players and operators have a lot to gain from the experience. Players simply need a pass, which can be used on any of Konami’s titles connected to the service. "This card is essentially the player’s loyalty card and opens up an array of new features designed to enhance game play and increase operators’ profits over a longer period of time," said Anderson. "Not only does this card work across all e-AMUSEMENT titles but it can transfer saved data and unlock content from previous games in the series to the latest version."

For Kevin Weir of Electrocoin (distributor of Konami products), Konami’s Guitar Hero Arcade draws people in time and time again because it is fun and simple to play yet challenges at the extremes for the core players.

"Guitar Hero goes from beginner mode, which isn’t on the home console version and is even easier than the home level, to Expert with a more durable guitar and less issues of lag, reliability of buttons, quicker response times and better quality feel and hold," he said. "Many players I’ve spoken to tell me they get that extra one per cent they couldn’t get at home because of the ‘industrial strength guitar’."

Going back to the debit card systems and the benefits they can provide, for Alberto Borrero of Intercard, while historically operators installed the system due to the cash control element, the true added value of the technology is in the marketing and promotions it allows.

"We have masterminded an extensive membership program with unique features that reward customer spending," he said. "There are built-in tools in the system that alert the operations manager when some customers are not coming back, or reward those that keep spending more frequently than others.

"It all starts with a good customer database that collects all the relevant data and then used to create promotions. Without having the tools to collect all the demographic information it is going to be hard to keep customers coming back."

For Sebastian Mochkovsky of Sacoa, there are certain age groups that tend to develop more marked loyalties to machines, such as teenagers. "Games like Pump It Up and Dance Dance Revolution are among the top machines teens tend to become fans of," he said. "There are innumerable forums discussing techniques and tricks to dance better, endless arguments about one brand over another. There are even discussion in forums about which locations have the best maintained equipment or most updated versions of the games. Similarly there are certain retro games that have their entourage of fans."

Debit card systems, whoever the provider, naturally encourage loyalty. The balance on the cards never expires and this in itself is a powerful motivation to return to the location. As well as this, because the cards tend to be customised to the location they become a sort of souvenir and a constant reminder of the good times had at the location.

##image3##

"Operators are realising that debit card systems empower their operations with advantages regarding control, marketing and customer loyalty that they cannot afford not to have," said Mochkovsky. "They are realising that operating with coins or tokens is a thing of the past."

But it is not just the amusement- side - of the business which is working hard to retain its customers. The low-stake gaming industry has had a really tough time of it lately - probably even tougher than the amusement side and operators and manufacturers are working hard together to bring new customers in while keeping their loyal customers happy.

According to Christine Jinks of game developer Games Media, based in the UK, industry figures on pub closures speak for themselves about the pressure licensees are facing and retaining loyal customers has to be an essential part of their business strategy.

"Gaming machines have always been a valued additional income stream for pubs supporting the mainstays of drink and food sales," said Jinks. "Having the right gaming and entertainment offer is essential. Keeping loyal customers engaged by a regular flow of fresh gaming content along with clear communication about that content, is certainly important - but it is also worth addressing casual and non-machine players with planned promotions to encourage them to show an interest in the machines and further boost revenues."

Games Media has recently introduced Ticket Out technology with about 50 per cent of its venues now using it and the rest in the process of being converted. A great way of building loyalty to that particular venue and encouraging repeat business and not just on the machines, Games Media can print bespoke promotions on the ticket, such as discounts on food and drink purchased on site. These offers are printed in real time at the machine so can be easily changed and updated. Ticket Out also allow?s venue staff to forge relationships with players, according to Jinks, which is key to improving repeat business as it makes them feel valued and their custom appreciated.

"Marketing and promotional support is a major part of our customer offer," continued Jinks. "Each venue receives a marketing toolkit packed with ideas and promotions for attracting new players and building loyalty with existing ones.

"Proactive retailers realise the benefits of promotion and introducing new players to the machines and embrace the opportunities we make available to them."

A current example of this is the World Cup, where Games Media has devised a simple sweepstake promotion to draw attention to the machines, encourage players to interact with them and gather player contact information so they can communicate with customers in the venue.

"Players register by inputting their details at the terminal and are then randomly allocated the name of a participating World Cup nation via text message," said Jinks. "All players with the World Cup’s eventual winner go into a prize draw to win a holiday to one of the semi-finalist countries. We are promoting the sweepstake in venue via POS material and through on-screen messaging at the machine. The text function can also be used by the pub to talk up new game updates or releases, offer hints and tips on game playing and promote any special World Cup offers on food and drink that the venue is planning to run."

This initiative shows how easily machines can be integrated into the marketing mix for big sporting fixtures and should, according to Games Media, deliver considerable benefit for the pub venues that encourage their customers to take part.

While times remain tough it is going to be imperative that operators think outside the box in order to retain customers. While discounts, competitions and promotions do work and will bring in those players that may have not visited the location for a while, if ever, they must also invest in the best games and the most suited games for their clientele. This should, in theory, go some way in ensuring their future within the amusement industry while providing players with a fun and entertaining experience.

First published June, 2010