Diamonds in the Data Mine

In: Business and Management

Submitted By paoao
Words 457
Pages 2
Business School
Executive MBA

Article Critique
Diamonds in the Data Mine

Instructor: Dr. Ahmed
Prepared by: ID# 201204263

Summer 2013
In this article, Gary Loveman, CEO of Harrah’s entertainment, explains how his company took advantage of proof based management to revolutionize how the company marketed to his customer’s and boosted customer loyalty and same store sales increase. Harrah’s Entertainment have seen 16 straight quarters of revenue growth in the late 90’s early 2000’s and even in the very economically slow year of 2002, it posted more than $4 billion in revenues, way in front of rivals. Loveman achieved this performance by using Harrah’s human capital and technology systems to better know the customer: they researched their customers, put in place some marketing programs to build customer fidelity and share, and rewarded personnel that offered superior customer service. Harrah’s owned an existing database that collected customer data from their rewards program, the Total Gold. From 1999, the company decided to take advantage of the data in a different way. They used database marketing and decision-science-based analytical tools to broaden the gap between them and casino operators who base their customer incentives more on intuition than evidence and they used the outcome to fine tune marketing and service-delivery strategies that keep customers wanting more. Instead of investing in real estate and flashy attractions to get customer attention, Harrah’s studied the purchasing behavior of its main customers. The company found that 26% of the gamblers who visited Harrah’s produced 82% of the revenue and their profiles were mainly middle-aged and senior adults with spare time and income who enjoyed playing slot machines. The data mining also discovered that customers who claimed to be happy with the Harrah’s experience augmented their spending…...

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