Growth and turbulence. Largest casino company in the world. Brought in becasue company was not growing - came up with a strategy based on retail.
Simplicity is the answer to turbulence.
In 1998 Harrahs had built casinos in newly legal states. No new states, so no growth; competitors moving in with newer stuff.
Harrahs had built a great transactional database of customers. Loyalty card rewards customers for spying on their bets, correlating with restaurants.
It had been collected, but not used.
They had casinos over the whole country, so they wanted to build a national retail brand.
Competitors strategy was 'build it and they'll come' - Bellagio $1.8bn - the casino God would build if he had the money.
They pursued a switching strategy instead of a buidl new one - grow what they had, as they couldn't afford to compete on flashness.
1. Create a national brand.
2. Envelop customers with reasons to be loyal - provide excellent service
3. Use decision science to optimise customer profitability
Turning customer promiscuity into customer monogamy.
They build Pavlovian systems - driving reactions they want from customers.
Made a Marketing manager COO to focus on marketing. Company, not business units, owned the customer.
The Casino Owns the customer. (Sound like hacker-speak to me).
They have rooms so gamblers can sleep, restaurants so gamblers can eat.
They had 36% of market, but if they could increase by 1% the share price would go up $1.10. By 2001 they moved yp to 42%
People go to casinos to take risks. Their ads show the insides of casinos, not resorts. Found very strong correlation between service quality and return visits, so made sure managers knew this and invested in service.
They really take good care of the chips - count them, track them watch them - tell staff thta the chips are the means, the customers are the ends. Incentive program pays bonus if measured service goes up by 3%, irrespective of financial performance. Staff watch each other, and businesses compete as scores are published.
Need to distinguish between potentially good customers and observed behaviour. They would do epxerimental demographic filtering, send offers to see if they can bring people in. Targetting offers - carefully matching the offers they send to the people based on interest.
Treat all customers differently - good customers get treated better. 3 lines at the buffet - short platinum line, long normal line.
26 million American adults in database.
They have patent protection on doing this because they have mixed up the marketing with technology, and don't expect the patent to stand, but are using it to disrupt competitors.
Seen no impact from internet gambling - doesn't match the experience.
80% of business is slot machines. Slot advantage is 6%; Blackjack is about 1% if you are good, and it is service intensive. Table bets of $25 or less lose money. Harder to collect table game information as not automated.