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Casino Service Quality, Tiered CustomerSegments, and Casino Player RetentionCatherine Prentice a , Brian E. M. King b & Keis Ohtsuka ca Marketing, Operations and Management, Faculty of Business &Enterprise, Swinburne University, Victoria, Australiab Centre for Tourism & Services Research, Victoria University,Melbourne, Australiac School of Social Science and Psychology, Victoria University,Melbourne, AustraliaVersion of record first published: 27 Sep 2012.

To cite this article: Catherine Prentice , Brian E. M. King & Keis Ohtsuka (2012): Casino ServiceQuality, Tiered Customer Segments, and Casino Player Retention, Services Marketing Quarterly, 33:4,277-291

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Casino Service Quality, Tiered CustomerSegments, and Casino Player Retention

CATHERINE PRENTICEMarketing, Operations and Management, Faculty of Business & Enterprise, Swinburne

University, Victoria, Australia

BRIAN E. M. KINGCentre for Tourism & Services Research, Victoria University, Melbourne, Australia

KEIS OHTSUKASchool of Social Science and Psychology, Victoria University, Melbourne, Australia

Building and maintaining service quality is one means of retainingcasino customers, and thus establishing competitive advantage.Conducted in Asia, the current study investigated the relationshipbetween casino service quality, player segments, and customerretention using tiered segmentation. The research involved theconduct of 40 in-depth interviews with gamblers from differentsegments. The results provide insights into how the various tiers ofcasino player perceive the key dimensions of service quality andhow such perceptions affect future purchase intentions. A numberof significant implications are identified for casino managers.

KEYWORDS casinos, casino player segmentation, customerretention, service quality, customer tier system

INTRODUCTION

Numerous casinos have been established in Asia in recent years, andcompetition has intensified, notably in Malaysia. The four-decade monopolyenjoyed by Resorts World Genting has been threatened by the recent open-ing (in 2010) of two megacasinos in Singapore and by newly erected casinosin Philippines. Meanwhile in Macau, with its miniscule landmass of less than

Address correspondence to Catherine Prentice, PhD, Marketing, Operations and Manage-ment, Faculty of Business & Enterprise, Swinburne University, 91 Lancaster Drive, Point Cook,VIC 3030, Australia. E-mail: cathyjournalarticles@gmail.com

Services Marketing Quarterly, 33:277–291, 2012Copyright # Taylor & Francis Group, LLCISSN: 1533-2969 print=1533-2977 onlineDOI: 10.1080/15332969.2012.714700

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30 square kilometers, 33 casinos compete for players from Mainland Chinaand Hong Kong. These sources are also the primary market in the case ofcasinos such as Walker Hill in South Korea. Competition prompts casinomarketers to undertake aggressive promotions to acquire domestic and inter-national players. This approach to acquisition has typically been ineffective,since competitors are generally well placed to match or exceed any pro-motional activity (see Klebanow, 2002). Casino marketers have becomeaware that retaining loyal customers is more profitable than acquiring newplayers. A positive relationship between player retention and casino profi-tability has been reported by researchers (e.g., Kale & Klugsberger, 2007;Watson & Kale, 2003). This has prompted casino marketers to adopt strongerrelationship-based marketing. The deployment of customer relationshipmanagement (CRMs) by casinos is evidence that this marketing approachis becoming more common.

Customer retention is the central aim of relationship marketing and isclosely related to company profitability (e.g., Heskett & Schlesinger, 1994;Rust & Zahorik, 1993). The relevant literature has indicated that customer sat-isfaction is an important antecedent of customer retention. Does this viewapply in the case of the casino industry, given the nature of gambling? Kale(2005) has argued that service quality is a more stable construct than cus-tomer satisfaction, for predicting player loyalty and retention. Baird, a promi-nent gaming consultant, views customer service as essential for customerloyalty and sustainable competitive advantage (see Kale, 2005). However,the connection between service quality and player retention is rarely citedin the gaming literature. Noting this limitation, the present study employs aqualitative approach to gain insights into the relationship between casinoplayer perceptions of service quality and their intention to return. Further-more, this study segments casino players into differing tiers on the basis ofcustomer pyramid theory (see Zeithaml, Rust, & Lemon, 2001) and analysesplayer perceptions of service quality through a series of interviews conduc-ted with casino players at different tiers.

Casino Service Quality, Customer Satisfaction and Retention

Service quality has been widely discussed in the services marketing literature,and involves customer perceptions of an entity’s overall excellence orsuperiority, often by comparing expectations with perceived performance(Parasuraman, Zeithaml, & Berry, 1988). Service quality is commonlyacknowledged as an antecedent of customer satisfaction (e.g., Liljander &Strandvik, 1995; Oliver, 1993; Parasuraman, Zeithaml, & Berry, 1994). Basedon the service-profit chain proposed by Heskett, Jones, Loveman, Sasser, andSchlesinger (1994), customer satisfaction drives customer loyalty and com-pany profitability. Quite a few studies have investigated this relationship.Rust and Zahorik (1993), for example, tested a mathematical framework

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for assessing the value of customer satisfaction, and linked it sequentially toindividual loyalty, aggregate retention rate, market share, and profits.Hallowell (1996) examined the link between customer satisfaction, customerloyalty, and profitability and concluded that customer satisfaction is respon-sible for as much as 37% of the difference in customer loyalty levels. Suchevidence indicates that service quality is linked with customer retentionthrough customer satisfaction. Woodside, Frey, and Daly (1989) found thatcustomer perceptions of service quality affect the level of satisfaction withservices, and that customer satisfaction impacts on behavioral intentions.Storbacka, Strandvik, and Gronroos (1994) provided a more comprehensiveframework linking service quality, customer satisfaction, customer retention,and company profitability. This relationship chain assumes that customer sat-isfaction is improved by enhancing service quality. On this basis a satisfiedcustomer is likely to have a strong and enduring relationship with the serviceprovider. Long-term relationships tend to generate stable revenues thatimprove profitability.

Service Quality and Player Retention

Although it is commonly believed that customer satisfaction is an importantdeterminant of customer retention, academics, including Kale (2005), haveasserted that it is not a sufficient precondition to ensure customer loyalty.Satisfaction may be viewed as a summary psychological state, and is oftenmeasured on the basis of a single transaction. However customers may behappy on one occasion or encounter, but may be dissatisfied on other occa-sions. It is this combination of experiences that shapes overall customer sat-isfaction. As a consequence of this composite, satisfied customers may fail toreturn, whereas those perceived as being dissatisfied may generate repeatpatronage. Kale (2005) recounts the example of a car manufacturer that dis-covered that 90% of satisfied customers generated only 30% to 40% ofrepurchases. Satisfaction may be viewed as an emotional state, which is sub-ject to influence by a variety of factors. This emotional dimension is of parti-cular importance in casino settings. Emotions change in response to differentsituations, especially in the case of casino players. A gambler who just hada big win may be happy with the casino even if the service provision waspoor. However, after a big loss on the gaming table, the same customermay be highly critical of the very best service, and vent his frustration atcustomer-contact employees. In this scenario, player satisfaction alone maynot generate repurchase.

The concept of service quality is relatively a more stable construct andencompasses a global judgment or attitude towards a firm’s overall services.When measured at the level of an encounter, it can be a predictor of encoun-ter satisfaction. As a function of multiple experiences, it can be a predictor ofoverall service satisfaction. The evaluation of the single encounter may

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correlate with the measures of overall satisfaction. This in turn correlates withoverall perceptions of service quality (Bitner & Hubbert, 1994). Research byZeithaml, Berry, and Parasuraman (1996) has shown that service qualityimpacts on customer retention. They reported that improving service qualityincreases favorable behavioral intentions and decreases unfavorable inten-tions. The current study starts from this premise and examines casino playerperceptions of service quality and their intentions to return.

Service Quality and Casino Player Segmentation

Although service quality is an important determinant of customer retention,an organization’s service resources are limited, and customers are not servedequally. Nor are all customers equally profitable to the firm. Some organiza-tions segment customers into categories on the basis of their profitability.Federal Express Corporation, for example, categorizes its business customersinternally as ‘‘the good, the bad and the ugly.’’ Zeithaml, Rust, and Lemon(2001) have noted that it is neither practical nor profitable to provide all cus-tomers with superior service. The authors have suggested that firms shoulduse the customer pyramid as a tool to rank customers into different tiersbased on the level of profitability that they generate and to manage discretetiers of customers differently with a view to increasing profitability.

Most organizations that have deployed the customer pyramid approachto segmentation have done so on the basis of the profitability associated withparticular customers. Though this is applicable to casinos, it is particularlychallenging to pinpoint player profitability in the casino context. In otherindustry settings, customers enter a selling environment, purchase the goodor services that they are seeking, and then obtain them. The seller profitsfrom the transaction, as well as from any subsequent patronage that is forth-coming. Gamblers enter a transaction with the casino through their gamblingactivity. The player wins or loses, and profitability for the casino depends lar-gely on the customer losing. Where casinos do adopt the customer pyramidtool for segmentation into different tiers, they do so according to visitationduring a given year, average betting volume and time spent gaming per visit.Gaming systems such as Platinum Card, Gold Card, Silver Card, and GreenCard represent this tiered approach to segmentation. The various servicesprovided by the casino are adjusted for each player according to the typeof card that is held. Some casinos offer VIP gaming rooms and free foodand beverage (F&B) to their gold and platinum cardholders, and airportlimousine services for international VIP players. Although every player mayhave an expectation of receiving optimal services from the casino, Zeithamlet al. (2001) indicated that customers vary widely in their behaviors, expec-tations, and responsiveness to marketing on the basis of their tiering. Forexample, casino high rollers often demand the best of everything, from‘‘six star’’ amenities to the most generous discounts and commissions

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(MacDonald, 2001). Green Card holders may be content to receive discoun-ted casino accommodation. Different customer expectations are likely toaffect perceptions of service quality. On this basis, the following propositionis made:

P1: Different tiers of casino players have differing perceptions of casinoservice quality.

Dimensions of Service Quality and Player Retention

Service quality is a widely discussed and debated construct. Most researchers(e.g., Cronin & Taylor, 1992; Parasuraman, Zeithaml, & Berry, 1985, 1988)agree that service quality is not a unidimensional construct. In their earlierexploratory study, Parasuraman et al. (1988) developed a SERVQUAL scalebased on the criteria used by customers in assessing service quality.SERRQUAL is based on gap theory, which suggests that the differencebetween customer expectations about a firm’s service performance and theirperceptions of actual performance. The scale is composed of five dimensionswith 22 items, namely tangibles, reliability, responsiveness, assurance,and empathy. The researchers applied the following labels to the fivedimensions:

. Tangibles: Physical facilities; appearance of personnel; equipment usedto provide the service; physical representations of the service; othercustomers in the service facility.

. Reliability: Accuracy of billing; keeping records correctly; performing theservice at the designated time.

. Responsiveness: Willingness to help customers and provide promptservice.

. Assurance: Knowledge and courtesy of employees and their ability toinspire trust and confidence.

. Empathy: Learning the customer’s specific requirements; providing indivi-dualized attention; recognizing the regular customer.

Most of these items involve an element of human interaction throughthe delivery of services. In the case of services characterized by a high degreeof person-to-person interaction and by the absence of an exchange of tan-gible goods (e.g., casino gaming), customer perceptions of service qualityare comprised primarily of personal interactions between frontline employ-ees and customers in each service encounter (Chandon, Leo, & Philippe,1997). Such personal interactions often involve negotiation and communi-cation processes, which may affect subsequent customer attitudes, inten-tions, and behaviors. In the casino context, service encounters include

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interactions between players and hotel receptionists, along with thosebetween croupiers and casino hosts, and will vary according to the tieringcategory. In the case of the VIP gaming rooms, the primary points of contactfor high-end players, apart from croupiers, are casino hosts. In sharp con-trast, casino hosts are barely visible and not readily available in the low-endgeneral gaming areas. Inevitably, because of the distinct service encountersthat occur, different tiers of player will have different perceptions of casinoservices. In the mind of the customer the levels of personal interaction withcasino service representatives will affect the importance attached to dimen-sions of service quality. Dimensions of service quality play different rolesin determining the attitudes of customers towards the casino and will affecttheir intentions and behaviors. On this basis, the following proposition ispresented:

P2: Dimensions of service quality have differing effects on the patronageand retention of players on the basis of their tiering category.

METHODOLOGY

This study was conducted in Asia and the results have particular relevance forthe Asia Pacific region. Data were collected from regular gamblers whopatronize the casino at Genting in Malaysia. The sample was selected becauseit suits the needs of the study objectives. Before the launch of the two recentlyestablished casinos in Singapore, Malaysia’s Casino De Genting enjoyed avirtual market monopoly in Southeast Asia (including Singaporean gamblers)because of its proximity. The opening of two megaresorts in Singapore haslured regular patrons away from Genting and has ushered a period of intensecompetition between the two destinations. What factors are likely to influencethe outcome of this commercial battle? The literature has shown that servicequality influences customer loyalty and competitive advantage. Given thecompetitive position of casinos in these two locations, prospective respon-dents were approached at the survey casino with a view to investigating theirperceptions of service quality and intentions to return, in order to determinewhether, consistent with the literature, the former determines the latter.

The study involved a series of semistructured interviews. A qualitativeapproach was employed because of the exploratory nature of the research.This method was believed to be better suited for obtaining a deeper under-standing of gambler perceptions of casino service quality and their intentionsto return. The research also intends to identify gambler definitions of goodservice expected from the casino. Despite the absence of relevant researchin the casino context it is widely believed that customer services are animportant determinant of casino success.

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Survey respondents were recruited from various tiers of casino player.The casino uses a tiered card system and segments gamblers on the basis oftheir average betting volume, hands per hour and frequency of visit. Thesystem involves five types of card: thematic card, green card, silver card, goldand platinum card. The Thematic Card is a non-gaming card, and is designedfor any casino visitor. It can be used at all points of sale, including hotels,restaurants, shows, and theme parks. The Green Card is the minimum levelof gaming card recognition and can be used in the general gaming area. TheSilver Card, one class above the Green Card, is used in the International Room.The next level is the Gold Card, used in the VIP gaming room. The PlatinumCard occupies the highest level, and Platinum Card holders are normallyhigh-end players (also known as high rollers), who play at the VIP roomand two specially designed high-end gaming areas. Following advice providedby the vice president of casino marketing, the researchers classified Gold andPlatinum Card holders into a single category referred to as VIP players.

The card system allows customers to earn redeemable points, and tocategorize players into tiers. Players at particular tier levels receive differinglevels of service. For example, the casino only provides free F&B in the VIPgaming properties for Gold and Platinum Card holders. The researchersspent a few weeks in the casino and interviewed 10 players from each seg-ment (40 in total). Prospective respondents were drawn from the casino’sCRM system, based on the segmentation criteria used by the casino and onthe basis of place of residence, including acknowledgment of accessibilityto the Singapore casinos. This selection was undertaken to minimize thecompounding effect of extraneous variables such as interviewee place ofresidence on the research objective—player retention is determined by ser-vice quality of the casino not convenient location. Interviews were under-taken during nonplaying periods in the designated guest room wherepatrons can rest and have drinks.

To test the first proposition, the 22 performance-based SERVQUAL itemswere used to investigate interviewee perceptions. The dimensions and itemsof SERVQUAL represent core evaluation criteria that transcend specific com-panies and industries. The scale was developed through a systematic, multi-stage, and iterative process, designed to be applicable across a broadspectrum of services, and reported good reliability and validity (Parasuramanet al., 1988; 1991). However, Cronin and Taylor (1992) have argued that thesimple 22 performance items are adequate to define the service qualitydomain, and are supported by the procedures used to develop the items.Their study supported the superiority of the performance-based approachto measuring service quality, named SERVPERF, over the gap theory-basedSERVQUAL. Hence, this study adopts the 22 SERVPERF items to measuregambler perceptions of casino service quality.

These items were subsequently reworded to suit the context of thestudy. According to Parasuraman et al. (1991), the items used to measure

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service quality provide only a basic skeleton, encompassing statements foreach of the five service quality dimensions. The scale can subsequently beadapted and supplemented with context-specific items to fit the characteris-tics and specific needs of a particular study setting. In the present study,interviewees were encouraged to share their opinions about casino services.The 22 SERVPERF items were also adapted to suit the casino context and thecharacteristics of the gaming experience.

To gather information which would inform the testing of propositiontwo, respondents were asked about the relative importance of each SERV-PERF item in determining their intention to return and their willingness toprovide referral. For the purposes of this qualitative study, player retentionis interpreted as an attitudinal intention to return to the casino. The litera-ture indicates that customer retention is generally preceded by customerloyalty (e.g., Ennew & Binks, 1996). The concepts differ in that the formeris a behavioral construct, whereas the latter as an attitudinal construct.Whilst attitudes and behaviors are related, in the casino context, notall returning gamblers have a positive attitude to the casino and not allgamblers with a positive attitude are retained. Retained players may eitherbe genuinely loyal, or spuriously loyal to the casino, simply because ofsituational factors such as locational constraints on choice, or a positiveexperience of winning. The latter may convince certain Asian gamblersthat the casino has good feng shui. When the prevailing situational factorsbecome more favorable to switching, these customers are more likely tobe lured to a competitor. Personal circumstances may dissuade a gamblerwith a positive attitude from returning. For instance, a sequence oflosses in the casino may change a person’s financial situation, thereby,restraining their gaming activity. However, genuinely loyal clients arehighly likely to spread positive word-or-mouth communication and toprovide referrals.

The researchers used a discussion guide to ensure consistency with theinterviews. Player perceptions of casino service quality were addressed usingSERVPERF, including their intention to return and willingness to refer. Inter-viewees were also encouraged to articulate the reasons for their patronageand intention to repatronize. Data collected was transcribed, translated,and analyzed by pooling all of the relevant information.

ANALYSES AND RESULTS

The interview results provide a number of useful insights. In general, inter-viewees holding a Silver Card were more proactive in contributing theiropinions. This group of respondents was particularly interested in have theirconcerns addressed and would want their voices to be attended by casinomanagement. Players from different segments have distinct views about

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the effects of each service quality dimension on their patronage and reten-tion. Their responses revealed that gamblers have different interpretationsof service quality from clients of other businesses. The specific responsesare discussed next.

Proposition 1

This proposition was supported based on interviews findings.

THEMATIC CARD HOLDERS

For the tangibles offered by the casino, Thematic Card holders focused onboth gaming and nongaming facilities, namely, hotels, theme parks, restau-rants, shows, and gaming rooms. These casino visitors were impressed withthe casino facilities. They expressed enthusiasm for both the indoor and theoutdoor theme parks, for the stage show and for the gaming area. Some sta-ted that the casino is the perfect vacation destination, since there are facilitiescatering for all family members, for example: indoor and outdoor themeparks for kids, exclusive shops for wives, concert show for teenagers, slotmachines for grandparents, and table games for fathers making a few bets.However, the respondents reported some unpleasant experiences withcasino hotels and expressed an unwillingness to return to these hotels.One customer stated, ‘‘The hotel really sucks. The room is so small and dirty.The reception is always busy and a long queue.’’ Respondents also com-plained about the restaurants, noting that despite the profusion of outletswithin the casino complex, they are always busy and noisy. They are moreunderstanding of noisiness and crowding in the gaming rooms, on the basisthat this is customary. Nevertheless, most would prefer a quieter room withhosts providing services.

Thematic Card holders focused on service encounters with the employ-ees of the hotels, restaurants, theme parks and croupiers. They reportednegative experiences with casino employees. They perceived employees asunspontaneous, and as slow in responding to their requests. They alsorecounted experiences of requests being declined using unconvincingexcuses. Since a majority of this group is made up of tourists and non-gamblers, there are few encounters that require sophisticated knowledge.These customers appear to be relatively indifferent towards employeeprofessionalism. However, most have not received any individualized inten-tion from the casino over the course of their visit. They feel neglected or as ifthey are regarded as unimportant.

GREEN CARD HOLDERS

Unlike tourist visitors, most Green Card Holders are day-trippers. The excep-tion is when casino hotel rooms are on sale. For example, a standard room that

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normally costs RM200 may be reduced to half price during the sale period,sometimes for as low as RM1. Themost influential tangibles for these customersare the gaming area and the casino’s F&B catering. Their responses were gen-erally quite negative towards casino tangibles. Respondents expressed a strongintention to try the Singapore casinos in future. As for the intangible offerings,respondents were unimpressed with employee services, describing them asneither prompt nor courteous. Despite feeling neglected by casino hosts andreceiving minimal services from them, they surprisingly continue to patronizethe casino. This may be attributable to inertia or to the cooler temperaturesprevalent in Genting (the casino location is atop the Genting Highlands wherethe weather is cool throughout the year. They indicated that they would haveno hesitation visiting casinos in nearby jurisdictions to try them out.

SILVER CARD HOLDERS

This group visit casinos regularly. They appreciate everything that casinosoffer: fining dining, shows, gambling, and casino hosts. Gambling is trueentertainment for them. They are not high rollers, but may stay at the gamingtables for a few hours a day over a couple of days per week. They enjoyinteractions with the croupiers and hosts. A combination of tangibles andintangibles shapes the judgments of these players about the quality of thecasino. Respondents from this group indicated that they like the casino facili-ties. One player stated, ‘‘It’s got everything here, fantastic. I love it.’’

In considering the intangible services provided by casino service repre-sentatives, respondents were positive about reliability and helpfulness. Theystated that representatives typically deliver what is promised. If their requestcannot be fulfilled, a sincere apology is received with some compensationprovided. However, they were less positive about the timeliness of service.They indicated that it was hardly worth the effort of addressing requests tocasino hosts, because they are powerless and always refer matters to super-visors who in turn report to those in more senior positions. Nevertheless,they appreciate the politeness and friendliness of the hosts.

VIP PLAYERS

As was previously indicated, such customers enjoy all of the casino’s VIPfacilities. Tangibles that form a basis for their perceptions of quality are theVIP gaming area including F&B within the VIP facility, hotel rooms andtransportation. Surprisingly, respondents were largely indifferent towardsthe casino’s luxury offerings—French vintage wines, limousine or helicoptertransportation, or the hotel suites. However much the casino has enhancedthese offerings, such customers appear to take them for granted.

Unlike other customers, VIP players interpret reliability as referring tothe transfer of their gambling funds, how accurately the hosts keep records

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of their nonnegotiable chip rolling, and if the hotel rooms are consistent withthe original promise. These players recounted unpleasant experienceswith the casino in relation to aspects of reliability. Although less impressedby the promptness of the employees, they unanimously agreed that casinohosts are polite and helpful. Respondents enjoy interacting with the hostswhom they believe are taking good care of them. Croupiers might strikethem as being skilful and professional, but are viewed as less entertainingthan they had expected. Whilst expressing dissatisfaction with the rigidityof management, these players received close attention and recognition, suchas a personal greeting from senior managers upon arrival at the casino hotelentrance, and surprising birthday gifts presented by casino management.

In conclusion, Thematic Card and Silver Card holders had positive per-ceptions of casino tangibles, whereas Green Card holders were negative, andVIP players were indifferent. Only Silver Card and VIP players perceivedcasino intangibles positively. The results from the interviewees are summar-ized in Table 1. The terms positive, indifferent, and negative are used todescribe their perceptions of the five dimensions of service quality.

Proposition 2

This proposition was supported.The interview findings indicate that tangibles and responsiveness are

the primary factors in determining the prospects of future patronage fromThematic Card holders, particularly in the case of hotel facilities and thepromptness of service; whereas for Green Card holders it is only tangiblesthat are influential. The intention amongst Silver Card holders to returncan be attributed to the physical facilities of the casino, to employeedependability and to the degree of attention provided by employees.Surprisingly, VIP players paid a great deal of attention to reliability andassurance. They indicated that the reason for their repeat patronage isthe dependability and trustworthiness of casino employees. However,when they were asked to rank the relative importance of the five dimen-sions of service quality for their future repeat patronage, interesting resultswere obtained (see Table 2).

TABLE 1 Service Quality Perceptions of Casino Players at Different Tiers

SERVPERFdimensions

Thematic Cardcustomers

Green Cardcustomers

Silver Cardcustomers

VIPcustomers

Tangibles Positive Negative Positive IndifferentReliability Negative Negative Positive PositiveResponsiveness Negative Negative Negative NegativeAssurance Indifferent Negative Positive PositiveEmpathy Negative Negative Negative Positive

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The results indicate that Thematic Card and Green Card customers applysimilar rankings. Silver Card customers value individual attention paid bycasino employees, whereas VIP customers seek security and dependencefrom the casino.

DISCUSSION AND IMPLICATIONS FOR FUTURE RESEARCH

It has been widely claimed that service quality is one of the key factors lead-ing to casino player loyalty and retention. This article has provided insightsinto the relationship between the various dimensions of service quality, cus-tomer segments, and retention through interviewing casino players at differ-ent tiers based on the card segmentation system. The interview findingsindicate that players at different segments have distinct perceptions of servicequality. Operationalizing service quality into five dimensions, this study hasshown that various dimensions of service quality have differing effects oncustomer retention for players at different tiers. The findings have thefollowing implications.

Firstly, it is insufficient to view service quality as the customer’s judg-ment about an entity’s overall excellence or superiority as has beendefined in the services literature. Differing perceptions and attitudes ariseas a result of the variety of service encounters that a customer experiences.The overall assessment of service quality is made up of a combination ofperceptions formed from each service encounter between the customerand service provider. To obtain positive customer perceptions towardsthe organization’s service quality, it is advisable to manage each serviceencounter closely.

Since the various dimensions of service quality affect player retentiondifferentially for customers at different tiers, casino management shouldfocus on those aspects that concern the specific tier of player loyalty andretention, in order to be cost effective and maximize the use of casinoresources. For example, it has been claimed that the majority of casino rev-enues are derived from high rollers, or VIP players. ‘‘Casinos will do almost

TABLE 2 Effects of Service Quality on the Patronage and Retention of Different Tiers ofCasino Players

SERVPERFdimensions

Thematic Cardcustomers

Green Cardcustomers

Silver Cardcustomers

VIPcustomers

Tangibles 1 1 4 5Reliability 4 5 2 1Responsiveness 2 2 5 3Assurance 5 4 3 2Empathy 3 3 1 4

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everything to cater to the fancies and superstitions of their high-endcustomers’’ (Kale, 2005). However, the present research has revealed thatthe casino’s luxurious tangible offerings have little effect on the loyalty andretention of these players. They are not fascinated by luxurious hotel suitesor by vintage French wines; nor are they excited about pop concerts orimported Las Vegas magic shows and appear to take such offerings forgranted. Their intention to return is primarily concerned with their interac-tions with casino frontline employees. In this context, it is essential to buildrapport between the employees and the casino guests, since this willenhance customer loyalty and retention (Gremler & Gwinner, 2000). Provid-ing relevant training for player contact employees is imperative. On theother hand, although VIP players expressed indifference towards tangibleofferings, complaints would be received if they were not provided; or theywould be lured to competitors. It is important that casino managementresolve this dilemma and ensure the efficient use of casino resources to max-imize revenues.

Although the tiered player system was created largely to support theefficient use of casino resources; the practice should not be allowed to implyany prejudice or discrimination against lower tier customers. Such an impli-cation can influence customer perceptions of service quality and judgement.Defined as overall judgement of an entity’s overall service excellence, servicequality may also be viewed as a comparison of services that customers expectfrom the provider with the service performance that they perceive. Casinoplayers at different tiers logically expect differential levels of services,although it is possible to optimize their expectations. It is important for casi-nos to manage player expectations and make appropriate adjustments basedon the level of their relationship with the casino.

The interviews have revealed that casino hosts are inadequatelyempowered in their capacity as first contact point for players. This is reflectedin the slow response by hosts to player requests, when they are required torefer matters to their supervisors and=or more senior management. This hier-archical process is time consuming and may be intolerable for gamblers whoare seeking an immediate response so that they can regain their anticipatedturnaround luck. To minimize player complaints and the possibility ofswitching to competitors, casino management should attend to the issuesraised by empowering frontline employees.

Some limitations of the research should be challenged. Firstly, the studywas originally designed to include both qualitative and quantitative methods.However, despite the offer of attractive incentives to participate fewresponses were received for the quantitative survey. The low response ratemight be attributable to the sensitivity of gambling and reluctance on the partof prospective respondents to describe their gambling activities. It also indi-cates the difficulty of large-scale, random sampling on gamblers in the casinoindustry context. Second, the gathering of survey results from a single

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location may limit the generalization of the findings. Future research shouldendeavor to overcome the obstacles encountered in concluding the presentstudy.

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