Knowledge of Generational Differences Increases Gaming Profits
Is it really important to know about age differences amongst your gaming customers? Only if you want to keep customers of all ages coming back.
Player development is an important goal of any gaming establishment and repeat business is required to meet this goal. Gambling is a form of entertainment enjoyed by adults of all ages. While much research has been conducted on gambling behavior, empirical research on the topic of gambling behavior in specific age groups is quite limited. Is it really important to know about age differences amongst your gaming customers?
Only if you want to keep customers of all ages coming back.
In order to increase intent to return, it is important to be knowledgeable about each segment of your target market. So how do you get this knowledge? Knowledge comes from two sources – experience and science. Much of the knowledge each of us has about age differences comes from our own personal experience. We have all interacted with people of various age groups in our families, friendship groups, at work, and in our neighborhoods. Your knowledge of older adults may be based on observations of your parents or grandparents. What you know of young adults may be based on your own current experiences or memories of your past. You may also have knowledge of generational differences gleaned from discussions with others or from your own exposure to different forms of media such as television, movies, newspapers, or magazines.
Unfortunately, knowledge gained from personal experience, our “common sense”, is limited and incomplete. Most college students are required to take an introductory course in psychology, the science of behavior. Many of these students expect this course will be an easy “A” because they believe psychology is simply common sense. Any psychology professor will tell you that the first exam is a real eye opener for these students. Psychology is a science and scientific knowledge can only be gained through scientific research, not personal experience. Only through employing scientific methods can you gain unbiased knowledge of human behavior.
Even without consulting the research, we know that attitudes and behaviors are influenced by the generation in which we grow up. Our society uses labels to identify groups of people based on generational effects. For example, the label “baby boomers” is used to identify individuals born between 1946 and 1964. Baby boomers were the first generation to grow up with television. Since they did not experience the Great Depression, baby boomers tend to be economically optimistic. They are usually well educated and comfortable with technology since they grew up in the era of computers. Baby boomers are an important part of any market because they are typically big spenders.
Senior citizens represent an important segment of the target market for a gaming establishment and this segment deserves special attention. Not only are senior citizens increasing in number in the U.S., they are also faring better financially today than at any time in recent history. Once the poorest age group in society, seniors are now much less likely to live in poverty, and they have more disposable income. Also noteworthy is their improved health status. Life expectancy in the U.S. has never been higher and improved medical care also provides seniors with a better quality of life. The end result: seniors have more leisure time available to enjoy their wealth; money that many of them are spending on gaming. In an article published in the Journal of Gambling Studies, Dennis McNeilly and William Burke note that for a significant number of retired adults, gambling has become a new form of recreation and entertainment.
People born between 1965 and 1980 are referred to as Generation X or Gen X-ers. Generation X grew up with both parents working and thus became self-reliant. Individuals from Generation X want to control their own destinies and experiences. As customers, Gen X-ers are more volatile than previous generations and higher-maintenance. They desire immediate information and are sophisticated in their approach to filtering that information even when it comes from numerous sources. Many Gen X-ers research products before they consider a purchase.
Generation Y is used to categorize individuals born between 1981 and 1995. Unlike previous generations, Generation Y has been pampered. They have also been nurtured and programmed with a slew of activities since they were toddlers. As a result, they are high-maintenance and high-performance. Generation Y, compared to previous generations, is less likely to respond to traditional command-and-control management. They have a speak-your-mind philosophy and they are not afraid to challenge the status quo. Generation Y is also more racially diverse; one out of three consider themselves non-Caucasian. Marketing successfully to Generation Y members requires using more involved techniques than the traditional techniques used to attract their parents. Generation Y is attracted to products and services they perceive as popular, but not too commercial.
In spite of their differences, all of the generations discussed above are potential customers for the gaming industry. Information about the characteristics of Generations X, Y, and Baby Boomers is interesting and gives you some appreciation of generational differences, but it is of limited usefulness for marketing purposes. More specific knowledge is needed to improve marketing efforts and increase intent to return for customers of all ages. Research can give you this knowledge. Conducting research is like watching an artist creating a painting. The artist starts with a blank canvas. When you look at this blank canvas, you realize the possibilities are infinite; neither the artist nor the observer knows exactly how the end result will appear. The artist may have some idea, but the image the artist has in mind when beginning to paint may differ in many ways from the end result. When a scientist decides to conduct research, the first step is to identify a research question. What is it I want to know more about? Let’s say we want to know more about generational differences in gaming customers. Identifying our research question also involves what scientists call a literature review, conducting a search of the available literature to learn what other scientists have already discovered. Perhaps someone else has already answered your question or a similar question. Often the scientist gains information that will help narrow the research question and direct the research. So what does the available literature tell us about generational differences in gaming behavior?
As we turn to the available literature, it is like watching the artist begin to take paint from the palette and apply it to the canvas. We begin to see shapes take form, but we still have little idea what the end result will be. As the artist continues to apply paint to the canvas, in what may seem a random fashion to the observer, the image may be confusing. A patch of green may, at first glance, appear to be a tree, but moments later appear to be a bush. Reviewing the scientific literature on a topic can lead to a similar experience as different studies on the same issue can have conflicting results.
Looking at the research on gaming behavior in older adults, we learn from Joni Vander Bilt, in a study published in the Journal of Gambling Studies, that among older adults, gambling can serve as a community activity that brings people together. Older adults who gamble were also found to have greater levels of social support. Participants in the study who gambled were more likely to report that they had people to talk to and meet with as often as they liked when compared to participants who did not gamble. In another study on later life gambling conducted by Dennis McNeilly and William Burke, the researchers found that adults aged 65 and older gambled for relaxation, to relieve boredom or pass the time, and to get away for the day.
A national survey on gambling participation in the U.S. was led by Dr. John Welte. This study found that older gamblers gambled as often as younger gamblers. Yet Dr. Nancy Petry, when comparing older gamblers with middle-aged gamblers, found that older gamblers wagered on fewer days and B. Grant Stitt found that the elderly visited casinos more frequently than younger adults! How can you use such conflicting results to market your gaming establishment more effectively?
If you want knowledge of generational differences that you can actually utilize to increase intent to return, improve player development, and enhance profits, then you need to conduct your own research with your customers. One of the reasons we find conflicting results in the scientific literature is because human behavior is very diverse. It varies across different regions of the country and over time. When you conduct survey research with your own customers and get the results, it is like the artist has put the final touches on the canvas and at last you can see the final painting. There is no more confusion. A scientific survey of your customers can empower you with knowledge of customers from all age groups. What drives their overall satisfaction with your establishment and their intent to return? This is information that you can use to increase profits.
Professionals in the gaming industry realize the importance of being knowledgeable of generational differences amongst their customers. The National Business Research Institute (NBRI) was recently asked to conduct survey research for a large hotel and casino chain in order to gain knowledge of their customers from various age groups. This research revealed that different factors drive overall satisfaction and intent to return in older and younger customers.
For customers between the ages of 21 and 45, overall satisfaction was driven by customers’ perceptions of the fairness of the comps earned based on play for the gaming rewards program. The perceived quality of the food and beverages offered in the hotel and casino restaurants was a second driving force of overall satisfaction. Intent to return for these customers was driven by the perception of a good mix of slot machine denominations. And these customers also wanted a casino where their gambling budget lasts longer.
Customers age 46 and over were more satisfied when they perceived the casino’s player card program was simple and easy to understand. Overall satisfaction was also related to cash bonus rewards and offers. For these customers, intent to return was driven by their perception of the casino being a fun and exciting place. Intent to return was negatively correlated with wait time. The longer a customer had to wait for hotel check-in or a casino cashier, the lower the customer’s intent to return.
This specific information about generational differences has helped this gaming establishment tailor marketing campaigns specifically for each segment of their target market to improve profits. Whether you want to tap into the spending power of baby boomers or the billions earned by members of Generation Y each year, a scientific survey can provide you with the knowledge and power to do so.