Defying the Odds: Using decision Analytics to Win

Big in the Gaming Business

Prof. Saurabh Kumar

 Decision Analytics
Decision Analytics is the discipline of leveraging analytics and performance
modeling to create a tight link between key operational processes and desired
strategic outcomes.

Basically, it is based on fact-based decision making and discarding any decision

making based on educated guesswork

“Analytics” refers to both the practice and the software and technologies that
enable it

The decision analytics helps in leveraging technology solutions such as dashboards

to provide insights to those in the front lines of the business
Harrah’s Entertainment: 1990’s
Competing in gambling industry wasn’t easy. Back in early 1990’s Harrah’s
Entertainment couldn’t compete through against rivals Wynn Resorts,
Bellagio and Luxor.

Reasons were: Insufficient cash, missing earning targets, etc.

The company then decided to drive a turnaround through analytics and

CRM.
What did Harrah’s have that its rival did not have?
 A huge warehouse of data through customers’ transactions

The strategy was: With this data, customize customer’s experiences in

casinos based on what the company knew about them.
 Harrah’s journey from “We Think to We Know”
Harrah’s in mid 1990’s started collecting more transactional data through ‘Total
Rewards’ program.
This program gathered and stored detailed data about customer’s activities :
1. Which Harrah’s casinos they visited
2. Which games they played
3. How much they won or lost
4. What they ate
5. What hotels they stayed at, etc.
The data was collected through cards inserted into slot machines, hotel, restaurant cash
registers, etc.

This program thus helped to move from making marketing decisions based on what
we think to making decisions based on what we know.
 “The Right Heads in Right Beds”
Customers’ data helps in making more profitable decisions for Harrah’s

For e.g.: They learned that people who are willing to spend dollars for Harrah’s hotel room
tend to make their reservations- say- for a trip during holidays at the last minute, Harrah’s
Entertainment use the customer data to convince hotel managers that they can hold rooms in
reserve for those profitable guests, with confidence that the rooms will be sold.

Through this and other strategies based on intimate knowledge of customers, Harrah’s
Entertainment have been able to increase revenue per available room from $172 in 2000 to
$268 in 2005

This was the “Right Heads in Right Beds”

Customer Data has taught us where the highest-revenue locations are.
For Example- we know precisely where in our casino our most profitable
guests- 65 year-old ladies from Indiana- like to play the slots.
Real Time CRM
Using CRM and giving offers/ incentives in real time

For Example- Consider the case of customer who is continuously loosing

all bets. Real Time CRM can help in giving instant coupon to continue
playing or complimentary hotel stay/ drinks.