Harvard professor teaches Big data gambling stunts

A guide to Wealth management: Loveman based on the analysis of customer consumption patterns, the long-term value of customers is calculated through a complex quantitative model, that is, the long-term total consumption of customers, rather than the consumption of a customer overnight. The idea is that as long as customers experience good long-term, short-term consumption is not sufficient.

Editor's note: The editor for all the probability of the game is super, especially in the casino can rely on probability and technology to win money are super admire, and the casino inside how to use large data to earn Tiger King's money, which can be seen slightly.

The article comes from the big data question and answer, chooses from Yi "The analysis-the big data and the evidence-based decision". This may be the first Chinese monograph on Analytics. The book argues that the depth, breadth and potential of decisions based on data analysis can be unlimited in the context of large data.

The following is the text:

Gary loveman,mit Economics, Ph. D., professor of Harvard University. In 1994, he published in the http://www.aliyun.com/zixun/aggregation/3783.html > Harvard Business Review an article called putting the Service-profit to Work's article has aroused wide concern in the business community. In 1998, he accepted the invitation of Harrah ' s Entertainment, the main casino business, renamed Caesars Entertainment in 2010, and became CEO of the company in 2001.

What's the big idea for a professor to run a casino? Loveman did not, like other Las Vegas casinos, spend heavily on dazzling performances to drum up customers. He also invested heavily, but he invested in information systems, which cost as much as $100 million a year.

Loveman's core initiative is the implementation of the name of total Reward Membership card system. His membership card is divided into gold, platinum, diamond card three grades, anytime, anywhere record members parking, play, dining, accommodation consumption. Membership card collects a lot of customer information, so that Harrah ' s can grasp the customer's age, sex, address, preferences (such as like playing 21 or slot machine, how much time to play), how often to the casino, how to eat in the casino, whether the casino overnight and other details. By 2010, Loveman had mastered more than 40 million members ' information and became the gaming industry's largest customer database.

By analyzing the membership card data and research data, Loveman found that only 36% of the consumer spending on casino entertainment was spent in Harrah ' s, most of which were consumed in other casinos. How to improve customer loyalty is the key to Loveman market strategy.

Data show that 26% of customers contribute 82% of the revenue. The analysis found that these good customers are not the gambling hawker that other casinos strive for, but the middle-class middle-aged and elderly customers, including teachers, doctors, bank clerks and so on, who have enough income and time to spend in casinos. Instead of extravagantly, they prefer to spend their time at a slot machine that has only dozens of or hundreds of dollars in the night; they rarely spend the night in casinos, usually on the way to work or over the weekend. The data also show that with $30 trillion in chips plus one night free accommodation and two free meals, 60 dollars is more pleasing to the customers. Obviously the latter cost less.

In order to win the loyalty of these customers, Loveman based on the analysis of customer consumption patterns, through a complex quantitative model to calculate the long-term value of customers (Customerworth), that is, focus on customer's long-term total consumption, rather than the customer one night of consumption. The idea is that as long as customers experience good long-term, short-term consumption is not sufficient.

According to the customer background information and historical consumption pattern, the system can find out each customer's pain point (bon points). In other words, if the customer loses more than a certain amount (pain point), the pain caused by this consumption may cause customers to be gone. and Loveman to find the pain point is to let customers do not reach the pain point. For example, the system predicts customer Shirley Pain point is 900 dollars, when she loses money close to this amount, Loveman will send a "lucky Ambassador" sent her 20 dollar voucher, persuade her to say that the luck is not good tonight, better go to a big meal first. Shirley although lose a lot of money, but can enjoy free dinner, this experience is not too bad, so the next chance will come to play. (If you've been to Las Vegas, you'll know that 20 dollars can really eat well.) ）

It can be seen that loveman data is not only statistical analysis, has reached the real-time data collection, real-time analysis of data and real-time guidance of the business to respond to the high realm. In fact, real-time data analysis has become the real-time baton of business development. Because the slot machine is the most popular item in the casino, when the customers are more often queuing phenomenon, and the queue when the customer does not have any consumption, but may be impatient to leave. Therefore, when the slot machine queue, the Loveman will be in time to open the other areas of the slot machine, and the information and preferential policies in a timely manner to inform the queue of customers, so that the timely satisfaction of the service.

Data analysis has also been used by Loveman to all aspects of the enterprise's internal operations. For example, the statistics show that the number of employees smiling is extremely related to customer satisfaction, the manager will observe the employee's smile when facing the customer; the statistic finds that happy and healthy employees can provide high customer satisfaction service, Loveman strengthens the company's health benefit plan. Loveman requires all managers and supervisors to be managed from the data, rather than simply speculating that "I think ...".

Under Loveman's leadership, Harrah has grown into the world's largest gaming company, with 55 casinos in the United States and overseas, from a local company with only 15 casinos.