Instead of hit-or-miss self-created mobile apps, casinos may be better off fostering chatbot and other multimedia messaging solutions

Authors’ Note: In the fourth of a 12 article series themed on where the money is now for “smart” casinos, VizExplorer executives debate the promise and peril of casino-produced mobile apps and a potential solution in the form of chatbots. Please note these articles are meant to stimulate thought and that we are using some deliberately provocative metaphors which should be taken with a grain of salt.

According to a recent report from Pew Research Center, nearly two-thirds of Americans are now smartphone owners, and for many these devices are a key entry point to the online world.

This number is up from 35 percent from 2011 and represents a remarkable adoption rate in the space of five years. What is even more interesting is that the usage is concentrated in younger users; we can only expect this number to gradually increase to the day where virtually everybody has a smartphone.

So, what are people doing with these incredible devices? Pew Research shows that nearly 90 percent of people use the iPhone for e-mail; and nearly as many have a smartphone in order to access social media.

Surprisingly, what they are evidently not using the phones for are mobile apps. In fact, nearly 80 percent of mobile apps are abandoned after their first use according to a study by SAP. So, after spending tens of thousands of dollars carefully planning apps for customers, research shows that four out of five of the people who download it will use it only once before deleting it. This phenomenon is going by the name of app fatigue.

APPLIED MATH

App fatigue is even more frightening we you consider that only a subset of customers will even download the app, and an even smaller amount spend any time on applications outside of “main Media” apps such as Facebook, Google, Instagram and of course e-mail. To analyze this further, let’s consider the data as it applies to casinos (please note that the app adoption rate is an estimate based on the authors’ interviews of multiple executives in gaming):

• Percentage of casino customers that own a smartphone: 64 percent.

• Percentage of casino smartphone owners who use the device for e-mail: 58 percent.

• Percentage of casino customers that download a commercial app from the property (usually 10 percent of those with a smartphone): 6 percent.

• Percentage of casino customers who will use the app beyond its initial download (usually 20 percent of those that installed the app): 1 percent.

The inevitable conclusion from this math—despite lots of time and money and the best of intentions, property-created mobile apps will simply not be used by a significant subset of their patrons. Furthermore, as smartphone adoption rates continue to rise, the level of commercial app adoption is not likely to change materially.

COMPETITIVE DISADVANTAGE

Now if these incredibly low numbers are not enough to make you reconsider your mobile strategy, consider the competition for app time. For example, when a customer is looking for a dining option at your property, will they use your app or instead go straight to Yelp? If a patron is looking for general property information, will they use the app or, more likely, go through Google? The harsh reality is your property-specific app is competing with incredible amounts of capital being poured into sophisticated application developments. Furthermore, these incredible applications are full of rich data collected from social media and the like.

Now of course operators can compete with these platforms, but they will need constant investment and a real dedication to driving value from the application. Even then, these operators can still only expect very low usage rates.

To be clear, difficulties in establishing applications does not exonerate gaming properties from trying to become more active participants in the mobile space, since casino customers are still buried in their mobile devices looking at social media, responding to text and e-mail and, quite frankly, entertaining themselves if they are bored. The challenge is how do operators enter this world in a meaningful way? Enter interactive media and chatbots.

GETTING CHATTY

A chatbot is a clever computer program that responds to typed questions from a human. The technology behind the chatbot is complex and relies on natural language processing, artificial intelligence and sophisticated rules engines. Facebook has launched a Bots for Messenger that allows a person to automatically communicate with hundreds of millions of users using direct text interaction. We’re excited about these bots and what they mean for operators who need to step into the mobile world and interact with their customers. This means we are entering the age of interactive automated messaging.

Interactive e-mail and multimedia messaging (MMS) is emerging as a vastly better and less expensive option than a mobile app, giving casinos the opportunity to deliver enriched messages directly to their target audiences, and with which those audiences can interact. Interactive e-mail and messaging can deliver everything that a mobile app can, and is a cost-effective replacement for developing a branded app and the marketing spend required to get people to use it. This approach also lowers the barrier to entry as virtually all smartphone users are accustomed to using e-mail and messaging to communicate. Casinos can change the flow of communication with interactive e-mail and messaging, and can promote engaging interactions that solidify relationships and enhance the player experience.

Let’s imagine what is possible with this chatbot technology. Perhaps the casino creates a mascot to represent the chatbot, and this mascot becomes the bridge between the casino and the customer—one that replaces the commercial app.

In our example, let’s say that the casino has created Bob the Cat as their mascot.  There are multiple options for introducing Bob to their customers, from traditional marketing channels to on-floor signage. But to really understand what is possible we must go back to the data.

As a casino and through the use of loyalty cards, we know much more about the buying habits of our customers than traditional businesses, including when they walk onto the property and start to gamble. Now let’s say Mary, a casino customer, enters the casino and puts her card into her favorite slot machine. The casino system recognizes this and the chatbot Bob springs into action!  Bob sends Mary an e-mail (or possibly text message) welcoming her to the casino and explaining that Bob is available to assist her with a wide variety of services.

Mary can then respond to Bob and ask for a number of helpful pieces of information. She can ask where she played last time she was here, which slot machine performs best for her, which slot machine is red hot today or, on the other end of the spectrum, which game is very cold and is “due to hit.”  She can also ask about her marketing offers—does she have a food offer available today?  Does she have enough points to get a free sandwich at the deli?  What time is the car drawing?  The possibilities are immense; Mary can even ask something as simple as where the nearest restroom is.

SMART SET

We’ve written many articles discussing the migration casinos are experiencing from traditional casinos to smart casinos, and no doubt this chatbot technology would provide significant benefit to any smart casino.  In addition to the interactions described above, with a smart casino the interactions between casino and customer can go much deeper.

Going back to Mary, in a smart casino environment our chatbot will know the minute Mary pulls into the casino valet and can direct her to participate in the daily promotion, give her access to all the information she needs to pick which slot machine to play today and, when it is time to leave, Mary can tell the chatbot she is ready to go, and by the time she gets to the valet her car is there waiting for her.  The entire experience for Mary will make it feel like she owns the casino.

Now let’s dig deeper into the data.  When a customer interacts with the chatbot, every interaction is stored and can be used for analytics; so now the chatbot can constantly be bettered over time through an analytical continuous improvement process. Perhaps there are some questions that are either not getting answered or are answered incorrectly. Through analytics, we can improve the chatbot to properly handle these new questions.

We can also leverage test and control to identify characteristics of the chatbot that drive additional revenue or additional loyalty.

Our chatbot can also learn from its interactions with customers and, through a complex machine learning process, we can teach our chatbot to provide individualized responses—meaning that the chatbot may respond differently to our customer Mary than it does to our customer Bob based on how Mary and Bob like to be treated.

Finally, from the conversations with our chatbot, we will collect a vast amount of data on our customers and their preferences and personalities. This data will allow us to be better marketers to our customers, and will empower our hosts to provide better individualized service.

They key to this new and interesting concept of replacing apps with e-mail or MMS driven chatbots is data. One cannot simply setup a basic chatbot with generic information. The data from all your casino systems needs to be integrated, and in addition the vast new data that comes from interactions with the chatbot needs to be a part of this integration.

The technology is here and ready to be used. What the industry needs are innovators to leverage this technology and take the casino and its customer interactions to the next level.