Saturday, August 7, 2010

Can those who teach also do?

Gary Loveman is a former econ professor who was hired by Harrah's to run the company after doing some consulting for them.  He used the tools of statistics to  identify his most valuable customers
First he considers the most basic set of probabilities, gender and age, since females are more regular gamblers than males and older women are the most lucrative demographic of all. Then he factors in where we live, what we do, how much we make, and, most important, how we wager and what we play when we come to one of his casinos. From those details, Loveman can divine to a remarkably accurate degree how much you, or the set of probabilities you represent, will be worth to Harrah’s over the course of your lifetime.   
He then created a customer loyalty program to encourage repeat business, and then went on an acquisitions spree to give his best customers more options to choose from.  
Since taking over as CEO in 2003, Loveman, 50, has relied on the numbers to build Harrah’s from a regional operator of 15 casinos to one with 39 in the U.S. and 13 more overseas.
This is a (rare?) example of an extremely cohesive strategies, with an easily articulated justification for his acquisitions (mergers).

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