Direct Mail, SWOT Audits, and 14 Years in Casino Marketing: Rick Harshman

0:00 · - Meet Rick Harshman and H2R Agency

Jordan:0:00
Welcome back to the [High Ticket AI Systems] Podcast. Everyone please welcome the one and only Rick Harshman. Rick, how you doing today my friend?

Rick Harshman:0:08
Jordan, I couldn't be better. Thanks a lot for having me on. I appreciate this.

Jordan:0:12
Absolutely. Yeah, it's truly our pleasure, my friend. Now for people that do not know the brand, know the company, can you please kind of describe what you do at a very high level and who you guys serve?

Rick Harshman:0:22
Yeah, absolutely. Our company is called H2R Agency and that's a derivative of the three owners myself, which is Rick Harshman, Ivy Rice and Steve Hammond. So it's kind of a math puzzle, two H's and an R. So Harshman, Hammond and Rice. Typically 90%, 80 to 90 % of our clients are casinos and we perform full service marketing agency things for them. Anything from Data analytics to creative to outdoor to commercials, you name it, whatever they need, we can provide it for them.

Jordan:0:59
It's so interesting. We've never had an agency owner specifically working with the casino space. I know you and I connected kind of off camera here, but how did you manage to get into the casino space?

1:10 · - How Rick got into the casino industry

Rick Harshman:1:10
Yeah, it's like the mafia, right? Every time you try and get away, they just pull you right back in. honestly, when I got out of the service, I got a degree in computer engineering. And one of my first jobs was in the casino environment. I answered an ad in the Wall Street Journal, an upstart gaming company called Grand Casinos out of Minnesota was looking at starting casinos on the Mississippi Gulf Coast.

So I went down there, I interviewed, I totally blew the interview. I realized I didn't have what it took. Real life experience, wrote a nice little thank you note to the director of IT.

And he responses, I want to hire you now. You proved to me that you may not know the answer, but you know how to get the answer because I wrote down exactly what he asked me that I wasn't sure, found out where to get it, what it did. And he says, what I liked about you is you're different. I love your personality. You're fresh. You're very honest with everyone. You're not going to run over anyone and you'll ask questions. That's how I got in the casino industry. So I was opening and setting up networks.

I had to tie in the cage and credit system, the POS, their surveillance system. So I learned more about casinos in a short period of time.

As I'm doing that, we opened up Biloxi, Gulfport, Cachata and the Voyals in Louisiana, Tunica up in northern Mississippi, and then they sent me out to Vegas to open up Stratosphere. So in a short period of time, that was within a three year period, in a short period of time, I became an industry expert very fast.

Rick Harshman:2:56
But then I realized, you know what, I'd rather be playing fantasy football than Dungeons and Dragons. So I wanted to start using the other end of my brain. After I left Stratosphere there, I worked with a company called Hospitality Network that provides all the in-room movie systems to just about every casino resort there is and out there. Finally, long story short, kids were old enough to start school, move back to Colorado, where we're from. and started working with an advertising agency. Me and two people, Steve and Ivy, met. We worked together for about eight years and we developed all these relationships in the casino industry, just from servicing them, doing their direct mail, anything that we needed. And we just decided, you know what, I think we can do this on our own. So we went and had lunch and decided let's do this. And that was about 14 years ago. And since then, We've been doing this.

Jordan:3:55
Okay, correct me if I'm wrong, but you worked in the casino world on the engineering side of things, making all the computers talk to each other. Sounds like the company really scaled quickly to open up many locations in over three years. You said, did you work at an agency, you said, because you wanted to use the other side of your brain. You wanted to play fantasy football.

4:17 · - From IT engineer to VP of Marketing

Rick Harshman:4:17
Yeah, as I developed inside the casino, I started getting more more involved with promotions and the creative side and trying to figure out how to do things in different realms. For instance, when we opened up the stratosphere, my goal was was to have the greatest check-in system. So no one would wait in lines for 30 seconds. So my boss is saying, we need redundancy. We need redundancy. Well, my side of the brain is thinking, hey, that's great. But why don't we eliminate the lines? And that's when I came up with the idea, why don't we have them check out of hotel rooms, their hotel rooms themselves through the television? So all of a sudden, that just opened up a whole new world. And they realized, yeah, there's always a different way. It's not always just pushing horsepower from the engineering side or from a server or an AS400, if you eliminate the lines, have people do what they want when they want, you'll never have a line, you'll just have happy customers. So as I progressed through my casino side, I got into the marketing side. I was working as a slot director, a VP of operations, and then finally a VP of marketing.

And from there, I went and worked for an agency because the agency at the time were doing other things, banks, franchises, fulfillment, but they wanted to get in the casino space. And they thought the smartest way of doing that, let's bring some casino experts in and let's start, you know, trying to bring in more casinos. And that's that's how we started. So Ivy Rice kind of recruited me to do that.

And then we just started developing more more casino clients. And that's how we started our relationships with the casinos.

6:02 · - Landing the first client (and why losing it was the best thing)

Jordan:6:02
On that topic of first acquiring clients, when you and your two partners decided to start going into business for yourself, how did you guys actually acquire your first couple of clients?

Rick Harshman:6:15
Actually through a relationship, we had answered an RFP from probably, I won't say the name, but it was the third largest casino at the time, especially with slots. So we had answered an RFP. They were looking for print production, promotional items, a bunch of different things. Well, They called us in. They called us in. They interviewed us. We went through the process. And next thing you know, they called us back and we were the second people. So there's two people that they did. It was the existing agency that they had in us. So we're in front of a board of about 12 people, the marketing team. the operational team just getting grilled and grilled on questions. And so here we are, our first pitch actually is what it was. We're already in the finals and we're like, I think we can do this. Well, long story short, they asked a question and they said, Rick, how do we know your company will be in business, you know, six months from now, a year from now, even four years from now?

And before I could answer, the chief marketing officer on the board asking questions said, I'll take that question. And she proceeded to tell them how well that I've helped them in the past with this other agency back in the day. And we thought, this is a slam dunk. We're looking at each other. We're outside high fiving each other. We didn't get it.

Jordan:7:47
No way.

Rick Harshman:7:48
They stayed with the other company. We're hitting our shoulders and everything else. But what that did to us, Jordan, it says, you know what? Right out of the chute, we had a pitch for over a multimillion dollar company. This is going to be easy. Well, we also realize we didn't get it. And we thought, you know what? We don't have the manpower right now. They would own us. We would not have time to even try and get another client. We couldn't drop the ball.

You know, everything that we needed, we would need quickly. You know, we don't even have a lot of the procedures in place yet. We don't have the insurance. So there's a lot of things we still had to do, but that gave us the confidence to say, wow. whatever we're telling them, whatever we're saying, we're getting in front of people. And then we realized we need to scale a little bit lower, kind of go to a smaller level type of casino, something that really can use our services right now and slowly build our business up. But that first failure was actually the best thing that ever happened to us.

Jordan:8:54
I want to agree my friend, not I want to, I will agree with you because like you said, if you would have taken on that client, you would have been strapped. It would not have been a good experience how you articulated. But at the same time, it was that confidence booster that you needed. I really don't think there's too many failures where we cannot extract lessons or extract positive things from that experience. And I'm definitely glad that you and the team did.

In regards to marketing specifically for casinos, is there a specific avenue, whether it's print, TV, don't know, billboards, that yields a greater return that works across the board almost every single time for any single casino? Or is it pretty diverse and pretty different for every casino out there?

9:44 · - Why direct mail still runs the casino world

Rick Harshman:9:44
Yeah, sure. It's slowly evolving. mean, as boomers are gaming and it's Generation X, then it's Millennials, and it's going to be Gen A, whoever it is. It used to be it's a 65-year-old female just pulling a slot handle, putting in quarters. OK, that's your bread and butter. That's what Atlantic City was built on. And it's pretty easy. Get them a bus down there. They give you five bucks. You show them magic.

Well, then what you have to do is keep getting them back. And the way it evolved was it was always direct mail. You got a slot card. That slot card kept track of everything that you did, how much money you put in, how much money you took out, what day you played, what machine you played, if you won, lost, everything.

And then they would take that information and create a direct mail campaign. Go back and say, hey, you came and played such and such. Here's $5 in free play. Here's a free buffet. Here's to bring them back. So direct mail used to be the bread and butter. And it was more of a way of rewarding your existing play to come back in.

That slowly evolved as slot machines became more electronic, more fun, more like gaming. Table games became huge, more of a social event. So casinos had to change. No longer was it just outdoors, was it direct mail? It became digital. Digital became the great thing because the goal is always to get the right offer to the right person at the right time in the right place. And that's why direct mail was perfect people would sign up, give you their address. You knew where they lived. If they moved, they had a change of address. Then it became mobile. If you can contact them on the cell phone, if you can text them an offer. So many things evolved in the digital space.

Rick Harshman:11:43
That way, as you're pushing things out to people, you don't know if they're looking at it or not on a billboard, if they're getting their direct mail, unless they bring that in. On the digital aspect, you know right away if they clicked on something, if they went to your website, if they asked for an offer, if they're engaged in your social media. So it really shifted over and over. The biggest thing is to take that digital footprint. get them back to your website, tell them exactly what you want them to see, show them what you want and get them back. And then with the mobile side of it, it's all about geo-fencing. If they're going to one of your competitors, that's when you send them an offer, a bigger and better offer than what they can get and entice them to come back. And vice versa, when they're closer to your casino, entice them, don't forget today we've got this special coming in. So it's slowly moved to the digital.

But honestly, Jordan, no one's ever going to get rid of direct mail. The gaming industry lives and breathes and dies by direct mail because it's cheap, people expect it, and no matter what, you can tailor their offers. If it's a table games player, if all they do is come to the entertainment, all they want to do is play slots, book a room, all that. It's all about rewards and putting the offer that they want back in their hands quickly.

Jordan:13:11
Oh man, I have so much to say. So my parents, but my dad and stepmom, they love Vegas and they also love cruises. I cannot tell you how many times when I go and visit that there's just like piles, not piles, like mail from these casinos and these cruise lines encouraging them, inviting them, enticing them to come back. And it definitely works because they're always going back. In addition,

Rick Harshman:13:15
Thank you.

Rick Harshman:13:19
Yes.

Rick Harshman:13:38
Exactly.

13:41 · - Personalization and the power of tailored offers

Jordan:13:41
It's a very similar approach when you said the direct mails, they have how much they spent, where they stayed, how much money they took out, their winnings, their losses, et cetera. Overall, it's personalized. Now, basically what we do internally and on behalf of clients is send personalized emails and personalized gifts that are really, really applicable and again, personalized to the recipients. And I think when you can make

Rick Harshman:13:54
Yes.

Jordan:14:09
Personalization happen on behalf of your clients or potential clients Sure, they respect you more but because it's personalized the probability of them converting Really goes through the roof because it's like wow, this is made just for me It's not a generic template or generic outreach or generic mail a mailer, right? So I'm glad you guys have that personalization there the second Second thing I want to say is you said

Rick Harshman:14:34
Yeah, you're absolutely right.

Jordan:14:39
Offers you brought up the word offers. I'm not sure if you can see my book back here, but it's all about offers, right? Businesses literally live and die on offers, right? So if a competitor does have a better offer than you, if your current customer is going to that other casino, because again, they have a better offer. How do you beat that? By making that customer a better offer than the other casino, right? So people really make decisions that they purchase things based on the offer. Not all the time, not every decision.

But from a business standpoint, marketing standpoint, it's really going to be the office.

15:14 · - The escalator method for player segmentation

Rick Harshman:15:14
Yeah, correct. You couldn't hit the nail on the head better on that, Jordan. Absolutely right. And one of the analogies I use, like when we go back to the players card, is everyone is segmented. I know you've heard the 80-20 rule, and that's 20 % of your business. makes up 80 % of your revenue. It's that simple. So you can't get rid of that 20%. You have to figure out how to keep that 20 % coming back time and time again. Otherwise, the business just suffers. And what we do in the casino industry is I like to call it the escalator. You've got new people coming in, they're on the bottom of the escalator, right? New people always coming in, they want to check you out, see what you have to offer.

And as they progress and become better players, they move up, which means they get better offers. They get better deals, cheaper discounts in hotels, longer stays all the way up to the top of the escalator, which are your VIPs, your 80-20 rule that you need consistently to come there. What's going to happen now is eventually, unbeknownst to you or not through any fault of yourself, they're going to get off that escalator.

They're either going to die and pass away. They're going to move somewhere else. They're going to find a better deal or honestly, you're going to upset them, make them angry, and they're going to go look for a better deal. So you always have to fill that escalator by figuring out what is it somebody needs to get to that higher level. And when you're looking at the data from that, it's easy to determine, wow, if we take this segment and just move them two more spaces or even one space on that escalator. and bring them back to the casino one more visit per month, that in turn just, it increases the bottom line expansionally onto something else. And when you look at the rate of play, how frequently they're coming in, it's easy to take that data and show them. The only thing that keeps them from moving up is, is it worth me giving you a bigger share of my wallet if I don't like the offers you're giving me?

Rick Harshman:17:26
So that's where it comes back into play, like we talked about, personalization, surveying, finding out what they want, what their needs are, and then delivering it to them and still trying to make them happy.

Jordan:17:39
my gosh, yes. So what you're describing, the escalator method is what we call like ascension pathway offers, where level one is an offer that almost everyone could afford to get a taste of what your services are. If you want to make it free, so more people can consume what you sell, fantastic. Not everyone can't make that offer free though. And I imagine that's level one with the escalator, right?

Now, once they get, once they get a taste of your services or the casino, it's like, how could I move this player up or move this, this person up? Now, I don't know what that looks like for the casino. mean, I'm sure it's going to be an offer that they probably want, but on our end, it's like the next problem that the business would face. So as an example, most businesses probably need more leads to get more revenue. Cool. What happens when you have too many leads, you're to need salespeople. What happens when you have too many clients, you need fulfillment help, right? That's kind of like the three pillars of business.

Rick Harshman:18:09
Absolutely.

Jordan:18:38
And if you, as a business owner, can solve each of those problems, not only can you, I mean, sure, increase your lifetime value, but the enterprise value of your business can go through the roof if you have a desire to sell it. Question for you specifically on the offer creation side for casinos, is it just offering more stays at a discounted rate, more free play? Like what do you feel like dictates a truly $100 million dollar offer as they say on the streets. Fort Ferguson.

19:09 · - Building offers that move players up tiers

Rick Harshman:19:09
Right. Yeah, well, the first thing you need to do is tier your players or your customers or your guests, whatever that is. Right. And usually it's two out of three recency, frequency or monetarily. So you don't want to you don't want to reward someone just because they're visiting all the time. They're in there all the time because they're retired, but they're not really playing much, you know, and they're

Jordan:19:24
Okay.

Rick Harshman:19:38
They're not there that often for a long period of time. They're just coming in. So you pick two and you put them in that tier. You pick the other two and put them in that other tier, knowing that no matter what's going to happen, these people are going to be here three times a week and they're going to be here four times a month. And they're going to take X amount in their share of wallet. It may not all be gaming money. They may not be putting it all in the slot machines, but they're also staying at the hotel. They're also... eating dinner, they're going to the entertainment, the shows, everything else. So then what you need to do is find out what they like. What do they want to do to bring them in to elevate their play again?

So that's what they normally do there is take it, take a look at it, and then it's just cutting segmentations, surveying them, asking them what they want to do, whether it's spending time with the GM, dinner with the GM, actually doing an online survey, rewarding them for the survey, looking at the SWOT analysis, what the strengths, weaknesses, opportunities, and threats are, and where they fit in with the casino with that.

Jordan:20:45
Okay.

Jordan:20:48
Sorry interrupt, but you said the SWOT analogy. I've never heard of that before, so I was like impressed when you mentioned that. I assume when you work with these casinos, you implement these strategies, you implement the analytics. They should have them, but maybe you can speak better about that. Do all casinos have the analytics that you currently install and you just optimize what they already have? Or do you feel like you have to install more analytical data points?

21:12 · - SWOT analysis and competitive audits

Rick Harshman:21:12
Yeah, every casino has an expert, whether it's offering promotions, some of them just want to be in front of camera on the social, doing meets and greets behind the scenes for entertainment, bringing those people in the fun side. The data side, typically they will have someone internally that can pull the data, not necessarily strategize about the data, but they know where to get the data.

Every casino has a slot accounting system, whether it's IGT, whether it's aristocrat, multi-million dollar systems that track everything. And then they've got templated reports that they can pull out what the coin in is, what the coin out is, what the hold is, what the machine is producing, the table games. But then it comes down to that card and that card doesn't lie, it just tells you when they're playing, when they're not, when they're winning. So you take that information, you take a look at it, you segment your players, and then you develop strategies and processes to bring that player back. The analogy I use for our clients is to bring your better bettors back. And that's what you want. You've got 2 % that are always there, but you know what?

They're looking for the freebies. They're only there if you're giving them something or buy this, get this, but they're always there. And that's the traffic, that midweek traffic that makes up your labor costs. You get to the weekend and the weekend is where your bread and butter actually is.

So you take a look at all those tiers that you're doing and putting those people in there and figuring out what is that next level for them. Now we offer data analytics as a company. Other casinos have a full staff that do it. And quite honestly, probably do it better than us because they've known their players, they've known their competitors, they've known the competitive market a lot better than we have.

Rick Harshman:23:19
You know, that's what they love to do. Others, that's the last thing they want to do. You tell us what we need to do. We'll work as a team. We'll strategize with you. You tell us how we should design a new member program, bringing new members in. You tell us how we should design a program for our defectors, ones that used to be here, but for some reason have moved away. How do we get those folks back? And then, of course, what can we do to keep Our VIPs happy in here, not looking at the competitors, not going down the street when a new place opens up. So that's what we help them look at and we manage your expectations. You're not going to be up at this level. You'll never be this level. You don't have the amenities. You don't have the parking spots. You don't have enough machines. Your product is a little dilapidated, maybe a little archaic. So we'll make some of those suggestions.

And quite honestly, we'll shop the competitors while we're out visiting you as well. And you had mentioned the SWOT analysis. That's exactly what we'll bring back. They don't know us when we go visit our competitors or our clients competitors, but they know everyone from the casino so we can sneak in. play the games, talk to the staff, ask them questions, and we'll bring our clients back the whole SWOT analysis, what their competitor's strengths are, what their weaknesses are, the opportunities are out there, and more importantly, the threats that they could have and what they're doing better than you. So we take all that information, we hand it over to them, we talk to them, and what we help them do is pick the best solution based on their budget, their timelines, their staffing, their knowledge, and that's how we get them rolling to bring those players back. Knowing there's going to be defectors, knowing they can't make everyone happy, but then they find their niche in the marketplace, they find their voice, their tone, their messaging, and now they know who they are and why they're who they are as well.

Jordan:25:28
think you said something pretty important. I think you have to actually analyze the market in order to separate yourself from the competition. I think a lot of people have great ideas, but they don't actually do the research to see, this idea proven? Was this idea tried? Is this idea exactly like my competition? I had a gentleman on the show the other day that works specifically for B2B tech companies or B2B SaaS companies. And he says, that is the first and fourth, that's the very first thing that we do. right outside of having a good product or a good casino is what exactly are our potential customers consuming or looking at whenever they consume our website, our marketing material have to stand out. And even if the

Rick Harshman:26:07
Mm-hmm.

Jordan:26:13
I want to be careful with my words here, but don't take this as face value. Take the second half as face value. Even if the offer is mediocre, but it's a new offer, it's new to the marketplace that will out that will, that will be, I don't know a good offer, but everybody else has the same offer. If that makes sense. So there's nothing separating or nothing different than, the rest of the marketplace.

Rick Harshman:26:40
Yeah, I go ahead. I'm sorry, Jordan.

Jordan:26:40
When you

Jordan:26:43
you're good. I want to bring up what you said about the SWOT. So you and I off camera talked about performing audits before actually working with the casino. And we do that on behalf of our clients as well, because it's really hard to, I don't know, argue with facts and numbers. So when you are doing the audit before working with the client, is that the same thing as the SWOT that you're describing? Or is that is the SWOT method with a current client?

27:12 · - Using audits to win clients before the pitch

Rick Harshman:27:12
It's both actually, and that's what helps us understand the marketplace as well and to find out what their needs are. It's so much nicer going in and you're trying to get a new client in and you already have information not only about them, but also about their competitors.

Now you can pick their pain points out exactly where they're lacking or, you know, where they're where they're exceeding. And that helps you. You like to pump them up just as much as you do. by the way, you're not doing this well. You kind of you kind of put that in there, but you want to let them know everything that they're doing right as well. But but absolutely. To answer your question, we always do the market research via, you know, over the Internet first. We see what's out there. We see where their competitors are. what they're doing. We go in days before. We play at all places. We take a look at, you know, the traffic patterns. What's so great about this place? What's so great about that? And then we also track You know, we when we're playing at their other casinos, we're also tracking, hey, what does one dollar actually get? Is that one point? Is that five points? Well, five points. What will that get us? You know, versus their competitors, five points can get us, you know, a 10 percent discount on a buffet or even, you know, more free play. So absolutely. I think it's imperative to you take a look at what they're doing prior to seeing them. And so you can help them with with offers or different promotions.

There's something that's a little unique or, or, you know, you make a little adjustment, a little tweak. Now they're giving away this, but you can do the same thing, but doing it in a different way. You know, you can spin a wheel instead of being on the slot machine. You can make announcements. You can, there's so many different ways you can talk to the valet, you know, and be the first point of contact for them. And the valet is giving them something.

Rick Harshman:29:10
Everything is always different but unique. That's what we try and do as well.

Jordan:29:15
No, I like that. And like that uniqueness, that novelty is really what brings people back. Right. I think people, most people probably like new things like novelty. Success is boring. There's a lot of repetition in business, but maybe outside of that, people like to travel, know, do new things, et cetera, et cetera. I you get my point there. But when you are working with clients, what is like the term look like? I imagine that to really like turn around their business to do a full 180 or I guess optimize. It's not a quick turnaround time. I feel like there's a lot of things that have to change for that casino.

Rick Harshman:29:53
No, it's not. It all depends on what they're looking for. Nine times out of ten, it's usually a brand refresh they're looking for. It's, you know what, our direct mail. The production times are taking too long or it's taken forever, you know, to get the mail from ex post office into the homes of our players by so much.

And the labor costs are just too intensive. So we'll come in and just make an offer. Well, let us evaluate your, let's just say your direct mail campaigns. Let's take a look at that. Why are you doing a 12 page booklet when your database is only, you know, 3000 people? Why don't you save some time and money and, you know, do something smaller and make it variable. Like you said earlier, Jordan, you know, so it's that uniqueness. It's something that's different. looking at something different completely out of the same old thing they're getting. As it's variable, you can run all your programs at one run. So you're saving money there. We've got a lot of different vendors in different states that can help expedite, cut costs, drop ship. everything else. So once they see the credibility that we've come in and they've been using a local company for so long and we showed them where the weak spots are, not only where they're at but how to correct those, how to make it look a little bit nicer, how to make it cleaner. and honestly broadcast who you are a little bit crisper and nicer and once they see that and as we're talking to them then we're starting you know carry on the conversation well what else are you doing what else are you struggling with what's in your budget that you're not utilizing correctly or vice versa so we we start in with a little bit of a program there next thing you know as we're talking to them we find out wow i'd really love to get this off my plate if you guys

Rick Harshman:31:54
guys could do this, if you could come in and do this because we've got a creative staff, but we're not really sure if it's worth the labor costs and really they're not really doing anything. It's like cutting and pasting old things. And so then we'll take over the creative form and that's the less things and less things on their plate. And then we come back and we help strategize. And once we start strategizing with them and finding out how they can get those players to keep coming back. and to create more revenue and create a higher EBITDA for them, that's when they love it. That's when they say, okay, well, what else? And that's, we go over soup to nuts. Well, why are you doing these types of commercials? Who are they supposed to see? Have you ever thought about going to the digital side where it's a little bit cheaper, you don't pay for anything unless they click on it. When they click on it, you know they're interested.

And we just strategize and help them develop and formulate an actual game plan and a marketing platform to take into the future.

Jordan:32:59
And that's after they agree to the terms and come on board or before you're doing what you just described.

33:05 · - Retainer structure and pricing ($12K-$35K/mo)

Rick Harshman:33:05
It's usually we come in with something to help them. And Ivy Rice, our president is so good at managing our clients that she's always listening. Every time she's dealing with them, she's listening to them, finding out what else do they need? How can we help them with everything else? So if we just come in and we do a retainer for creative services, usually we'll come in a year retainer. If you sign a retainer, It'll be cheaper because we can manage our staff and we can manage your timelines and your budget easier if we know what we're doing on a monthly basis for you in a weekly basis. If you just hire us for a one-off or something, it's hard to tell what that's going to be. We can't really gauge what the labor is, how many hours. So we'll usually sign a retainer. But once we sign a retainer with a client, if it's just creative services, then we start looking at how else we can help. And that's how internally we grow our business with our existing clients, those new clients that we do that.

Jordan:34:09
Gotcha, it's almost like adding services in a way. the retainer, correct me if I'm wrong, would the retainer cost change depending on adding services or because they sign a 12 month retainer, the price would be the same for 12 months.

Rick Harshman:34:12
Yes.

Rick Harshman:34:25
Yeah, the retainer will outline everything we're doing for them on a monthly basis, you know, whether it's a year retainer or two year retainer, but then I'll have the exclusions, you know, if you know data analysis, no translation services, no radio scripts, you know, whatever that is, whatever they are either doing internally or with another agency down there. So We always renegotiate if they want something else. If we can still fit it within the hours that we've given them on a monthly basis, we're very transparent and upfront with them. Sure, we can fit that in and your retainer is not going to change one bit. We started the business by saying, okay, if you're unsure of a retainer, here's the hours that we think is going to happen. And if we don't meet your expectations or those hours, We'll just refund you. We'll send you an invoice. Well, what happens? No one's used to getting money back from a vendor, you know? So they're like, well, how about if we just add something else to your plate? Our, you know, our finance department can't handle getting checks back. You know, we've already paid that, we've already budgeted that. So that's when we realized, all right, we just, we have an open-ended not to exceed this amount.

Jordan:35:48
Gotcha. Okay. Thanks for the clarification there. I kind of want to get back to what you said about auditing the said casino services, points, basically doing a full audit for the casino. And at the same time, at the end of that audit, coming up with the strategy or tweaks or new ideas on behalf of that casino before they even sign documents or come on board as a full-time client.

Rick Harshman:36:00
Mm-hmm.

Jordan:36:14
And I just want to like acknowledge you for that because we do that internally and on behalf of clients where again, we audit their Google ads, their Facebook ads or the SEO or their geo, their AISCO, whatever the case is, right? We'll do a full audit. then on the second half of that audit, it's like, here's everything that we would do for you already done. Now you can do this yourself or you can pay us and we'll do it for you. And that's, that works really, really well because one, the audit is factual.

Rick Harshman:36:24
Mm-hmm.

Jordan:36:44
You say things that they're doing correct. And you also coach them a little bit. know, here are one to three areas where I feel like you can improve to earn more revenue. And then here are the one to three things that we would do for you already completed. You're building goodwill, right? You're building an immense amount of trust and you're not really BSing anyone. Kind of going back to the trust factor. It's like, here's the work already laid out for you. If you want us to work together, we can do that. If not, no harm, no foul.

Rick Harshman:37:13
Yeah, exactly. Absolutely.

Jordan:37:15
I think it's just a great strategy. I don't think a lot of people that are actually utilizing that. think a lot of marketing agencies, just companies in general that work on the Dunferu service side, they want to just provide solutions without understanding what the core problem actually is. And just, just want to acknowledge you. So good job.

Rick Harshman:37:33
Absolutely.

Rick Harshman:37:37
Well, appreciate that. That's that's always good to hear. And and absolutely. And the other thing it does is helps manage their expectations, too. You know, if you want to get into this this marketing space and, know, you want to be the dominant social marketing expert within your jurisdiction, it's going to cost you this much because your competitors are already out there spending this much in the marketplace. So if you're happy with third or fourth place, you know.

That's great. But if you want to be the number one in this space, it's really going to cost you this much. But we can come up with ways to manage your budget in different aspects as well. So that's the other thing that really helps. You're not going to over promise and under deliver with them, especially when you have all the data right there.

Jordan:38:27
Absolutely. When it comes to your services specifically, I know it's full service, but do you guys help with Google Ads, Facebook Ads?

38:35 · - Why H2R stopped trying to do everything in-house

Rick Harshman:38:35
Well, honestly, we're full service. what we've learned in full transparency to everyone is we've learned what our niche is. And sometimes I say our wheelhouse because I really don't know if it's pronounced niche or niche. So I just say wheelhouse is. Yeah. So we have a lot of partners that are out there. So it's we found out a long time ago, just like we don't buy media would have been too expensive.

Jordan:38:50
Will that for sure.

Rick Harshman:39:04
to get all the software programs out there, to start establishing who we are, to get the buying power out there. So we partner with other media agencies that specifically and only buy and purchase media. We do the same thing with digital and social. We've got some really great vendors and partners out there that we do the same thing.

And we will tell our clients, you know what? This is this is our bread and butter now. But if you need this, this is who we bring in and we give them the option. We can white label them under us. So there's one invoice, but you can you can talk to them directly. Or if you'd rather, we'll make an introduction, then you can deal with them directly or we can help manage everything under one roof for you, which once again is always getting something off their plate as well.

But we tried to be all that was in one thing, and it worked for very small casinos. But as we started growing and getting bigger casinos, we realized they've got a lot of people already in-house doing that. They've already had relationships, longstanding relationships. So we said, where's our bread and butter going to be? And it was creative services. It was refreshing website development.

But no, when it comes to SEO and those things, we leave it to our vendors that have all the bells and whistles that they need to help us out.

Jordan:40:32
I think that's such a genius idea because as someone that wants to scale up a company, you do need to productize your services and your offerings majority of the time. Now, obviously there's going to be different nuances and different things you have to do for different clients, et cetera, but you can't sell everything under the sun to all potential clients. It's almost, it is impossible to be a master at everything.

Rick Harshman:40:59
Yes.

Jordan:41:00
You're taking you're taking time away from things that you actually enjoy and are actually good at you can actually progress To make you the number one person in this one thing for this market, you know It sounds good. It sounds good to sell everything on the Sun to all people, but it just doesn't work out You know, it just doesn't work out

Rick Harshman:41:18
Well, no, and that also drives the price up too. And that's the other thing is we offer very affordable solutions on a timely basis that fit on their budget. The old ad agencies used to be, we're cheap, we're accurate, and we're on time. Pick two. We actually do it all that way because we're upfront and transparent with them.

Jordan:41:47
What would ballpark pricing be for you guys out of curiosity? Sorry, I wanted to refrain, but I want to ask at the same time. What would ballpark pricing be for you guys?

Rick Harshman:41:51
Say that again.

Rick Harshman:41:59
Well, it all depends on what the services are. Our retainers run from anywhere from $12,000 a month, depending on what we're doing, up to $35,000 a month. So it all depends on how much we're doing for them, what they need, how much strategy.

So it all depends. There's some one-offs that we do. We do some brand refresh, some logo development, but that always seems to turn more and more into more workforce. Like one of the casinos that we're working with, we just did a whole complete brand refresh. We developed a new logo, new messaging, new taglines for them. And they had an in-house staff, but they were just too close. to the product. And as we went out there and looked at their competitors and brought back ideas and met with the team, they realized that even though we gave them brand standards, they didn't know how to use them. So we gave them a whole new brand campaign that they absolutely loved. And then as soon as it was turned over to their in-house graphic designers, they were just picking elements up. They weren't understanding how to put everything together.

So consequently, she's realized, wow, I now know what I have internally, so I don't need that anymore. I can get rid of this labor costs and now bring you guys in and start performing all the creative services and putting the ads out and developing the commercials and everything else for us. So it started out as one project, but it has slowly grown into complete services again. So that's why it's hard to tell. bring in a client that's the first thing we do is we sit down with them ask them what they want we get the team together we've we've templated out our hours what it's worth and we let them know here's here's how we see this this working out here's how many hours we think it's going to take give or take depending on if you make some changes but here's here's what the retainer is going to be and

Rick Harshman:44:07
Typically a lot of our clients are tribal, so it's always on their terms, their land. So we just, we say, hey, give us just 90 days. You know, if you want to have this contract or something happens, 90 days, there's not going to be any worries. The only reason why we give you 90 days is to help you out. If you're bringing somebody new in, it's that transitional period. You know, that's exactly what we do.

44:35 · - Growing accounts from one service to full-service

Jordan:44:35
Yeah, I think you need at least 90 days in order to what's going on. Right. First month is just getting integrated with the systems. Second month might be like some testing and then hopefully by the end of month two, you're optimizing your scaling, you're pushing the ball forward. At least from our perspective with, um, I guess what would the head count be? If you don't mind me asking you, you said you had a president, there's two other co-founders or is one of the co-founders the president? I didn't, I think that's the case.

Rick Harshman:44:37
Yes.

Rick Harshman:45:03
Yes, yes. It's the three co-founders, Ivy, Steve, and myself. We've got a data analyst. We've got two senior graphic designers. We've got another project manager. We've got a web developer and we've got our social manager as well. And we've got a production artist as well. So we have people in Florida, Oklahoma, California, here in Colorado.

Jordan:45:23
Okay, yeah, so pretty...

Rick Harshman:45:32
and in Washington.

Jordan:45:34
Gotcha, yeah, pretty good size team for sure. Does anybody, like how do you guys divvy up responsibility? Because I don't have that large of a team, like from a co-founder perspective, do you guys stick to like what you're really strong at, I assume, is it different?

Rick Harshman:45:36
Yeah.

Rick Harshman:45:50
Well, it's really wild because Ivy and myself have a philosophy and Steve is the creative director. He makes all the pretty pictures, but Ivy and I are the two that are, okay, how do we keep growing the business? How do we keep the clients happy? And what her and I have decided is let's get the business in, then figure out how we're going to execute the work. And that's worked very well because We know all the heavy lifting is up front. We're going to be working long hours. We're going to be not making a profit at the beginning, but we're going to put all hands on deck. Everyone's going to understand the client first. And then we want to find out, who enjoys what this client wants to do. And that's who we put on there. Now, if they're too full right now, that's when we bring someone in.

We'll just bring somebody new in and onboard them and help them out. We also have access to a lot of freelancers that we used in the past that we trust. But the goal is get the client in first. And once the heavy lifting is done, we create creative templates for them. We understand what their timelines are. It's easier for us to work around. then that's when the profitability starts hitting. Two, three months after the client is on board, we understand everything. We've got the right people in the right place doing the right thing. It just becomes so smooth. And then it's almost, I don't wanna say an assembly line, but we know this client on this week is gonna have this done. this client on this week is gonna want this done. And so it just comes back and forth. And what we use is we use a platform called monday.com. It's a web-based CRM that because we're virtual, everyone can see the status of every client, where it is, where they are, what's due, when it's due, when's the copywriting due, when's the first proof due.

Rick Harshman:47:55
So being a virtual agency, everyone can see that without being inundated with texts, emails, everything else. And that's how we just start bringing in clients.

Jordan:48:08
No, I love the way you framed it. You don't want to call it an assembly line, but that's actually how I frame it because it kind of it, you know, there is a repeatable process for fulfillment. if the process is not repeatable for marketing sales or fulfillment, you don't really have a scalable business with all due respect to anyone listening, you know, like you need a template, what you can template, customize what you can customize, but to speed up the fulfillment process, not only are you.

Rick Harshman:48:15
Mm-hmm.

Absolutely.

Jordan:48:36
making the workload easier on your staff. But you're making the client happy because you're getting results quicker when they pay, if that makes sense. You would wanna give someone results as fast as humanly possible. If someone gives you money, you wanna get the turnaround time, again, as fast as possible, right? You'll make everyone happy that way. Obviously, that stuff takes time, but I think you get the point there. When it comes to...

Rick Harshman:48:53
Yeah.

Jordan:49:03
like clients you can manage right now. Do you have more room for clients or are you guys at full capacity?

49:08 · - 3 new clients in 2 weeks (how it happened)

Rick Harshman:49:08
No, we absolutely do. Absolutely. As a matter of fact, we just came back from San Diego. We picked up a new client there. We're getting ready to head to Oregon this next week. We've picked up a new client there. And honestly, we had done an RFP back in August for

Jordan:49:19
here we go.

Rick Harshman:49:32
authority and all of a sudden we received an email yesterday that hey we want you to do a presentation we've narrowed it down from 60 candidates down to two so just in the last two weeks we've we've picked up three new clients

Jordan:49:47
That's amazing, congrats. How did you guys get the client of San Diego and Oregon?

Rick Harshman:49:53
We went down for a show. It was the Indian gaming show down there. We hosted an event. We rented out the home run stadium part of San Diego ballpark, Petco Park, and just invited our current clients, current prospects, our vendors, our partners, and just had an exceptional time. And what we do is, It's a casual environment. We're watching ball. We're not talking shop. We're not trying to sell. We're introducing people to other industry experts. And when they see that transparency is, this is what you need here. Let me, let me take over to Michael over here. Michael does this. You guys love talking to him or we we've got prospects talking to our existing clients. Well, tell me more about what they do and why you're with them.

And there's nothing better than our clients talking to prospects. And that's exactly what happened. They start talking. Next thing you know, they says, Hey, what are you guys doing tomorrow? You think maybe you can stop by. We stopped by. They had a little slight change over of their personnel. Next thing you know, we're, filling out a gaming license.

Jordan:50:50
Best healthy.

Jordan:51:07
That's friggin awesome. I'm so happy you brought that up. Your current client base are your best salespeople hands down because absolutely, yes, yes. When you are at a networking event or you're hosting an event like this and a potential client talks to an existing client, the existing client has no, maybe they do, but chances are zero incentive to speak truthfully and to hype up the agency, right?

Rick Harshman:51:09
Yeah.

Rick Harshman:51:14
Absolutely.

Rick Harshman:51:33
You're absolutely right. Yes. And no matter how good you are, no matter how seasoned you are, people know when you're selling.

Yeah, you know, that's and that's why we we don't do a booth at a trade show anymore. We'll we'll go on panels. We'll speak. We'll host events. We'll go to other events. But when we had a booth, you're not making eye contact. You're just sitting there looking at name badges. You can't do any good. You can't do me any good. You know, it's and you're stuck in a corner somewhere for eight hours a day and and you're not being creative and you're not using your personality or just getting to know people, you know.

And in our business, it's all about timing. You know, someone could love you to death and really love what you do. But if they already have someone, you know, you're going to have to wait a year. You're going to have to wait two years. So the other thing that we do with those events is our existing work gets us other work. The casino industry is very transient. People are always wanting to move up, move up. Well, in order to move up means you have to move away.

So if they go to another casino or somewhere else, they give us a call. Hey, you you took care of me before. Do you have a non compete clause where I'm at now? If so, let's talk. So a lot of that is our work and how we've treated people and the results that we've given them have given us other work. And that's, that's the best thing is that's when you know, you've got great relationships out there.

You're doing what you say you're going to do at a great price.

53:10 · - Rick's advice for agency owners in casino marketing

Jordan:53:10
Absolutely, no. respect for you, Rick. I want to ask this one last question here. For anyone who might be a marketer or own an agency in the casino space, what is one lesson or piece of advice that you would want to leave to that agency?

Rick Harshman:53:30
to do what you want to do with your agency, with your business. We were friends. We knew we were friends. We were like-minded. I'm working with like-minded people, but there's no way I can do what Ivy does. There's no way I can do what Steve does. Steve can't do do. Well, that made sense. Yeah, he can talk. I can't. Steve can't do what I do and vice versa. So right away we have completely different skill sets. but we have the same passion for what we do. And that's honesty, that's bringing people that wanna work, work hard, have fun at what they're doing. The other thing that we do that's so unique too, is we don't charge for travel. We never have, we never will.

And what that means is we decided not to build a shrine, a building and, and, you know, have overhead and a monthly burn rate that we need to keep bringing clients in to keep that going. Now we, said, we're going to be virtual. No one's ever been stuck in traffic. No one's ever called out sick. You, you can't be creative. If you're stuck in traffic, then you're worried about that for two hours.

So if you like to get up at 4 a.m., go on a bike ride and let those juices flow, that's what we allow our teams to do. If you're going to, there's no such thing with us, PTO, you take a vacation. If you need time away, you let us know, we'll get someone to fill in for you. If you just want to get away, take your laptop, log in. If there's things to do, do it. If there's not, hey, that's great. If we know you're getting away, we're going to cover for you. So.

With no travel, we get to go see our clients more frequently with them, which means we're seeing them in their element, on their terms, and they're more receptive of bringing us in. We take them out to dinner. We get to know their family as well, and they become friends. And there is nothing wrong with clients becoming friends. That's the whole thing. That's how you start learning and loving what you do.

Rick Harshman:55:40
You know, it's you can't always be friends with everyone. I disagree. If you really love what you do and it comes out in your work and your clients there and they love you for it, eventually that's exactly what happens.

Jordan:55:54
So that's great advice. I want to say two things. not only are you an expert in this field, but two, you sound like a genuine great human being. Like with the whole keeping employees happy, making friends with everyone. So just kudos to you, man. Like keep that up. I'm not sure you're going to change, but just want to acknowledge that I got it with you, my friend.

Rick Harshman:56:09
Thank you.

No, it's just the culture here at H2R. It's incredible. We've never had to go out and hire. People are consistently coming to us, hey, let me know if you guys are hiring. Let me know this and that. And that comes from some of those events too, those kind of easy key casual conversations here and there. So our philosophy seems to be working.

Jordan:56:38
No, absolutely. Rick, it was a pleasure having you on the show. Thanks for all the tips. The point is the strategies. I had tons of fun.

Rick Harshman:56:45
Jordan, I really appreciate the invite. Thank you so much and really had a great time. Thank you.

Jordan:56:50
Absolutely. All right, audience, till next time.

Rick Harshman:56:53
Thanks, Jordan.