Getting Lucky With Data

The case study on Harrah’s was very good, and explored some interesting ways that data can be used to improve a business (and eventually, an industry).  After reading the article it seemed that there were two major innovations that Harrah’s made in terms of customer service improvement.  We have already gone over the benefits of customer service many times in this class and how beneficial it can be in a business.  However from the article it would appear that the casino industry hadn’t bought into this in the same way that others had (like airlines).  Harrah’s main rivals were more concerned with one-upping each other in terms of spectacle and sparkling new amenities.  While this may be a fine strategy for the flagship casino on Las Vegas Boulevard, Harrah’s realized that it was not as efficient in terms of expansion.  Put it this way: When people go to the fantasy land that is the strip in Las Vegas, they go maybe once every few years (or for some once a lifetime), and they will be impressed by the bigger, shinier casinos.  However, for those who gamble regularly for recreation, they could care less about how many fountains a casino has.  One can only watch the pirate battle at Treasure Island so many times before it becomes old hat.

Harrah’s saw that a better way of competing would be to put assets into things like better customer service and rewards.  The first way they took advantage of this was by developing a tiered customer reward system.  This inspired customers to spend more at their casinos to earn more reward and get better service and perks.  Harrah’s made sure this was so appealing to customers by practicing exemplary customer service, such as no waiting and complementary rooms, in front of all guests of the casino.  Also, by putting the consumer in the silo (essentially in competition for the best rewards), but the employees in an environment where team success is the most important (due to the property-specific bonuses) is a great way to use competition to motivate.

The other thing they do, and probably the more innovative measure, is looking at the activities of casino patrons and determining what types of services and comps they would most like to have.  Also, analyzing the data has allowed them to figure out which patrons spend the most at the casinos and who will add the most value to the casinos in the future.  It is clear that looking at data trends when making decisions about customer service is a good idea.  It is interesting that other casinos were not able to copy this model.  It is also good that they did not engage in any data mining in their observations of the data.

This was a very interesting article and it is cool to see how an emphasis on customer service can change the way an industry is run and approached.


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