Gary Loveman, Caesars Entertainment, CEO, could be an ambassador for the data-driven enterprise. Nevertheless, even he is learning lessons every day about how to do better.
“We were collecting tons of data, but not using it,” he said in a discussion with MIT CDB’s Andrew McAfee at the recent MIT CDB conference on Big Data.
The entertainment giant has long been a leader in data analytics for personalized services, new customer acquisition and business decision-making. Yet, like most large enterprises, Caesars also struggles to perfectly calibrate its data to reflect changing business conditions and ultimately, to drive maximum revenue.
For example, in an industry that thrives on customer loyalty programs, “we couldn’t tailor our loyalty program enough,” until Caesars began to focus on the history, tastes and preferences of all its customers, he said, not just the high-spenders. As the economy changed, Caesars realized it had to rethink longstanding strategies and tactics about how it viewed its customers.
Here's a video clip of the conversation:
Bringing in the Geeks
Loveman’s candor and insights offer invaluable instruction to any business dealing with the complexity of massive data mining and analytics. For example, despite Caesar’s proficiency and proven track record in the gaming industry, “We had to bring in the geeks” and data scientists to see patterns and probabilities in the data, says Loveman, who received his PHd in economics at MIT Sloan. His staff’s expertise was in their industry and in marketing but “we had to retool and bring in the quant guys,” including a few who hold PHds in math and others with financial services background. All of their work must be transparent to customers, he says.
Among the insights gleaned at Caesars from this data analysis was a longer-term view which forced it to consider the ramifications of immediate decisions on the future of the business. Particularly in a weak economy, Loveman says, businesses might have to ask themselves if they will sacrifice some short-term revenue to go for larger, longer-term opportunities. “Will you wait out the cycle?” he asks.
Some education of the management team is necessary to make the technology-driven decision-making work, Loveman says. At the same time, “we listen to the signals of our managers, too.” Caesars doesn’t need more data scientists at this point, he says, but lots more communication is required to put their findings into daily practice. Sometimes, you do have to just “know the market and go with your gut.”
Caesars will continue to investigate ways to target new business in local markets and to personalize the services it offers --from chambermaids to executives. Most importantly, “we have to allow risk and experimentation. If organizations cater to their leaders more than their customers, they’re in a bubble,” according to Loveman, and that’s the probably the riskiest gamble of all.
Watch another clip here: