Examining the effect of direct mail on casino customer visitation and value
Customer relationship management in the form of direct mail is widely used by regional and local U.S. casinos for the purposes of building customer loyalty. Casinos can spend hundreds of thousands to millions of dollars each year sending direct mail, both with or without offers, often experiencing low response rates. As a result, managers need a better understanding of the impact of direct mail on customer loyalty. This paper investigates the impact on customer loyalty, defined for purposes of this study as frequency of visitation and customer monetary value, when a customer receives a mailing piece from a casino and upon redemption of an offer from the direct mail piece. Data analysis of secondary data from a regional U.S. casino was conducted to determine if relationships existed between direct mail CRM programs and casino loyalty. This resulted in identifying a significant positive relationship between both the receiving of direct mail and the redemption of a direct mail offer with increased visitation. Also revealed was an increase in customer value, as supported by a significant positive relationship between the redemption of a direct mail offer and an increased customer spending; however, no significant relationship existed between receiving direct mail and increased customer spending.
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