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Thursday, October 03, 2002

EXECUTION IN TIMES OF TURBULENCE, with Gary Loveman of Harrah's

Darn, no dancing girls. But lots of interesting information about the casino business... Harrah's didn't need more people to gamble more. Needed more people to gamble with them, a switching strategy. Had the customer promiscuity problem. Gary became the poster child for customer monogamy. Adopted a strategy of brand (no meaningful brand in the industry when they started out), service (an unusual business where most of your customers come in and lose...the losers build the Harrah's set about to become great at service...[DMH aside: these precepts are again sounding a chord in the legal field; Gary told an anecdote about asking a customer how he was doing and getting the response, "Shitty!" Not an entirely unheard of reaction from those retaining legal services...]) and financial rewards/recognition, coupled with rigorous data management. Brand development: people come to casinos to take (safe) risks. Come for the feeling of anticipation about whether the risk will pay off. In '89 the US Supreme Court permitted the inside of a casino to be seen on TV for the first time. Harrah's was the first to show gamblers in a casino on TV. Service: great levels of service build loyalty. The enormously detailed information Harrah's collects from its best customers about their gambling/spending habits with its "loyalty program" enables it to directly track how changes in service affect those habits. Harrah's has paid every employee of every property some $15 million in bonuses if their property experiences 3% or better growth in revenues. Database management, mining: the patented methods Gary Loveman is explaining for collecting and using customer data are comprehensive, somewhat terrifying, and highly related to issues of digital identity.

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