Summary from the Front End of Innovation Conference in Boston, May 2007. 

Gary Loveman is a highly informed, highly insightful, highly entertaining presenter whose current view of innovation is filtered from the lens of Las Vegas. But his insights were not limited to gaming. The principles cited addresses problems commonly found in many consumer business.

Casino gambling is a commodity with little brand loyalty. The traditional focus has been on the facilities. Consumers enjoy a wide range of choices.

Loveman confessed he had never been inside a U.S. casino before he was hired to run the Harrah’s operation. He entered an industry which had seen few innovations in 100 years. Harrah’s properties were not always in the best locations, nor did they have the best facilities. Customers play with everyone. Harrah’s wanted to become the champions of customer monogamy.

The challenge was to leverage the distinguishing factor - Harrah’s extensive footprint. The company operates more 50+ casinos worldwide. Like any retailer, customer relationships are more valuable than single experiences.

The prime audience was identified as age 50+ with money to spend and time to return.

A theme echoed throughout the Front End of Innovation Conference was direct customer insight. Loveman personally, and through employees, spent time making customers love the Harrah’s experience. Customers respond through return business.

Interactions identified : Create shorter lines. Provide faster seating. Deliver quicker valet.

A rewards card program provided the back end data for intense real time analytics about customer behavior. Playing habits, winning and losing amounts, frequency and duration of gaming, number and type of room purchased, dining preferences were all revealed through data collection and analysis.

This opened the door for immediate interaction with customers having great or terrible experience in real time. Employees were empowered to intervene with comps for show tickets, meals, upgrade rooms, etc. to show gratitude or compassion for customers. The direct and measurable result was longer and more frequent visits to the same or other Harrah’s properties. Harrah’s has the largest collection of gaming venues in Las Vegas and is rapidly expanding this internationally. Brand loyalty will provide mutual reward for customers and facilities.

Customers go to casinos for fun, excitement, anticipation of the moment. They pay to enjoy. The Harrah’s brand is focused on delivery of the emotional content of that experience.

The Total Rewards program has 49 million members and growing. Collection and analysis of data has permitted Harrah’s to go from “what we think to what we know.” Loveman further explains that “I don’t know” is often the best answer because it identifies where your immediate focus should be – converting hypothesis to facts.

Occupancy is currently at 96%. Increases in revenue will not be significant with more room stays. Analytics focused on gaming activities, locations of high return machines has contributed to increased ROI with revised floor layouts and positioning of machines.

Maximization of resources results in the highest win per slot on the Las Vegas Strip. Customer profiling can take a drink order through the slot machine and deliver it in 2 minutes versus 20 minute traditional benchmark. Analytics and micro segmentation will soon permit alerts when your dinner table is ready, updates to NBA scores, pinpoint targeting of offers while you play. Integration of multiple forms of digital feeds linked to customer preference knowledge will further customize the experience.

You can’t do that in the supermarket, said Loveman. Worse yet, the supermarket rewards the people who buy less than 10 items with an express checkout while the high return buyer waits in line behind a dozen other shoppers with a fist full of coupons.

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