Know When to Hold Them: Applying the Customer Lifetime Value Concept to Casino Table Gaming

This article considers the impact of relationship marketing in the casino gaming industry. It illustrates how 'customer lifetime value' (LTV)--the estimated profitability of a customer over the course of his or her entire relationship with a company--can be uniquely and successfully applied to improve casino profitability. Findings indicate that increasing customer retention rates for prime customers and upgrading middle-tier customers to higher-volume betting tiers can both significantly increase long-term casino profits. Implementation of such a strategy also reduces a casino's reliance on the high-risk 'junket' segment for achieving targeted revenues and profits.