Casinos provide an enticing, luxurious environment of bright lights and loud sounds designed to distract players from any thought of their losses and build loyalty in customers who keep returning time after time. They use clever marketing techniques to increase customer retention rates and ensure repeat business.
Casino loyalty programmes tend to focus on serving high-revenue customers, including those with disordered gambling behaviors. As such, their pursuit of rewards and status may inadvertently benefit such gamblers.
Studies examining loyalty programs tend to focus on behavioral outcomes due to its difficulty of objectively measuring attitudinal loyalty; however, both need to be considered simultaneously for an in-depth analysis of customer behavior.
Customer who purchase from one establishment without comparison shopping demonstrate behavioral loyalty. For instance, customers might order Coke from their favorite drive-thru at their favorite restaurant because it’s more convenient than having to travel elsewhere for another competitor’s version of it.
In their study, the authors utilized transactional data to examine how buying behavior changes after joining a multi-vendor loyalty program. Their researchers discovered that, generally, purchasing in the establishment where one joined tends to influence behavior toward other establishments associated with that particular loyalty program (e.g. an optical shop). Longitudinal research is needed in order to fully explore this phenomenon.
Attitudinal loyalty refers to customers’ positive associations with a particular brand. It’s closely tied to customer satisfaction and can even lead to advocacy among its adherents; evidenced by people willing to pay more for products they deem superior.
Loyalty programs have become an indispensable means by which companies across industries (including gambling ) seek to influence customer purchasing behavior. Unfortunately, much of the research on casino loyalty programs has taken an economic perspective rather than considering any possible risks from such programmes.
Prentice and Wong (2015) conducted research that demonstrated a correlation between tier status in loyalty programmes and disordered gambling symptoms and cravings, programme participation and gambling expenditure. Their results suggested that higher-tiered loyalty programmes may amplify disordered gambling cravings which then influenced program participation and expenditure – so it is imperative that operators design loyalty systems in such a way as to minimize gambling harms.
Psychologically speaking, loyalty can be defined as an individual’s persistent involvement with associations that form an intrinsic part of their identity. Many view loyalty as a virtue and seek to promote it within relationships and memberships: families expect it, organizations mandate it and countries encourage it. One may also develop personal ties to abstractions beyond individuals.
Behaviorally, it’s easy to see that loyalty stems from deep empathy and identification; yet psychologically its essence remains more abstract. Some have even claimed that its concept is an illusion or myth – that loyalty only refers to feelings or sentiment rather than choices or commitment. Yet closer examination reveals it as both feelings and actions combined into one concept.
As part of casino customer retention strategies, behavioural loyalty can also play an integral part. Unfortunately, it can become problematic for vulnerable players; disordered gambling (pathological gambling) is the most prevalent form of addiction to gambling; one study divided a moderately large sample of treatment-seeking pathological gamblers by their preferred form of gaming; FOBTs (fixed odds betting terminals) were chosen by 60%.
Goal gradient models suggest that gambling expenditures would increase as players got close to reaching certain tiers in the past; this suggests loyalty programs could contribute inadvertently to maintaining disordered gambling behavior patterns.
Casinos can reduce their reliance on behavioral loyalty by offering personal budgets or encouraging responsible gambling through behavioral tracking systems.