Some companies are relentlessly focused on writing an order above and beyond all other concerns. The question at Concept: 3 is the quality of that order. That's where our partners come in. Our dominance in this space comes from the fact that the goods that we offer to our clients are superior to all others. It makes the selling process easy and it creates demand for future orders. This gives the company extension into the marketplace that's broader than our competitors community of clients.
As we move forward we plan on gaining market share based upon these core principles. The measure of our future success is not our ability to communicate with our clients, which we do well it's our ability to harness, develop and train our people on the technology to communicate better so that we have the right product, the right price to the right decision maker at all times.
Concept: 3 has achieved tremendous financial success in 6 years, despite the challenges of COVID. We took advantage of the downtime to build a rock-solid foundation. We are well funded, poised, and ready for the success that is coming our way.
HISTORICAL & PROJECTED REVENUE
The casino industry is an opaque industry that does not match or resemble traditional retail or bulk wholesale industries in any way. That's why our expertise and leadership in this space is critical to determining our success. Gaming clients purchase differently than non-gaming enterprise companies. The marketing budget is critical. This budget is determined not on the value of a product, but on the value of a player.
That value is determined in a complex set of algorithms that determine a player's worth based upon the value of their play and participation. In a casino property this value known as “theoretical value" and is what all investment decisions are made in, and why our company is better at selling in this space than all others. Our adaptation to an understanding of casino gaming culture gives us the upper hand when communicating with clients. It instills a trust that we understand and value the core tenants of the gaming industry and that makes us the vendor of choice.
To date, Concept: 3 has had tremendous success and at least 30% growth per year from relatively no advertising. The tide is shifting for 2022. Armed with exceptional brands and out-of-the-box campaigns, our sales team is prepared for battle. Our plan for Q1 2022 is to visit each and every property in our database.
We will be relentless in our approach and consistent in our messaging. Concept: 3 is the ONLY provider in the casino loyalty market that can bring product, brands, celebrities, guaranteed fulfillment, and 24/7 customer service in that arena.
HOW OUR MARKETING DOLLARS ARE SPENT
Industry jargon like “continuity programs" is misunderstood by many people outside the gaming industry. Continuity programs are designed to create player and consumer predictability above all other considerations. An investment in the gaming space is only valuable If it creates behavior in line with casino operator metrics. When an investment in a player is made and a redemption occurs along with incremental gaming it is a win for the casino.
When executed properly this cycle is the main determining factor of how much would be spent on a player per gift redemption and the frequency in which that offer would be made. In today's player environment the average continuity program is based upon a $15 to $20 per gift cost to the casino.
We see it trending to a larger number, and what we are fortunate that our industry is unlike traditional retail businesses where the value of the product is not based upon a consumers desire to spend and buy that but rather on their behaviour on the casino floor. Therefore we believe that continuity programs will continue to increase investment value and we've seen some programs grow to as much as $30 per gift.
EXAMPLE FOUR (4) WEEK CONTINUITY PROGRAM
When selling to a casino client, would you rather one order or four orders from them? The continuity methodology creates predictability and behavior and players but it also creates the same predictability with casino marketing people. Casino marketing departments are often faced with the challenge of selecting gifts that incent their players and fall within the casino financial metrics.
When we put 4 week continuity campaigns into the decision-making cycle it guarantees if selected that you get 4 times the order value than if you offered them individual items and they use their own judgment to make a decision. Therefore these programs typically have a multitude of higher level of gross margin attainment due to the fact that these gifts are bundled into 4-week sets.
Historically, Concept: 3 maintains a 23% gross profit margin on sales. Selling the same product to multiple clients, managing logistics and very strong customer loyalty has allowed us to achieve this goal. Increasing sales of branded products provides an additional 2-4% margin. This product cannot be “shopped” by our clients and the increase in player redemption for a branded product far exceeds any increase in cost.
In our industry, inventory is a bad word. We are a build-to-order business and typically the only times we carry inventory is if we have an unexpected cancellation or if we decide to take a return back from a particular customer for strategic reasons. Other than that we do not build and maintain inventories because we are not selling to a consumer channel but to a wholesale channel, and that channel buys product not by demand but according to a promotional window or segment.
