Monday, May 16, 2011
There was a noise outside. He started. He thought he had closed the door but maybe not. The drinks at the state dinner last night had left him groggy and he had not been up to speed since morning. He pushed himself out of the tub and peered from the door. A slim lady, not over 30, was bent over the table, accumulating stuff on a tray. She wore the sort of costume that he had observed a cosply actress wear at a members-only club in Japan, frilly skirt and satin top, something that reminded him of an air doll. Oh yes, he had tried one of those. Before meeting Anne, he had passed months without meeting any woman. Koizumi had suggested to him to try one. The Japanese, he sighed!
She was petite, this woman, who was now dusting the mantelpiece with a tiny brush. Its light brown bristles made a soft movement that made a mockery of the act. He was standing in the most exclusive suite known to man, and here was this lady, dusting and cleaning, when she could just as soon walk into his arms and allow him to show how decisive he could be in bed.
He walked towards her. Her hair was tied in a tight bun and the skin at the nape of her neck glowed with a fragrance that he could not have smelled at this distance but was sure was emanating from her. She turned around and gave him a shocked look. "Oh I am terribly sorry sir," she said, "I thought you weren't here." She looked here and there and began collecting her stuff to leave.
"Oh no please, don't leave, it's all right, " he said, and walked towards her. She looked at him with horror and a look passed in her eyes, a look that mixed recognition with utter surprise. Suddenly he realised he was naked, and thought, Thank God, now there is no going back. Now I cannot douse it in error.
She started walking towards the door really fast. He lunged for her. She gave out a cry, but he was grateful they were the only ones on the floor. He held her from behind and whispered sexily into her ears: "Listen, listen dear, I don't mean to hurt. Just calm down, ok? Please come here and sit."
He was reminded of the island he had visited with Anne on the invitation of Papadopulos, and the hotel room, just like this one--only smaller--where they had made love. That had followed a failed meeting with the leaders of the G8 in London where every one of his goddamn proposals was shot down by one party or the other. He had had to come out at the end of it looking like a tame rabbit who had to sugarcoat his words to the press. Bloody heads of state!
But she was still struggling, shouting now, asking to be let off. "I am the chief of the IMF darling," he told her, "and I will show you a good time." The sound of these words made him feel robust and vigorous, and for a moment, his mind actually believed them. If now, only this intransigent woman would agree!
He lifted her and the feeling of her writhing body and fighting legs soothed his tense nerves. He felt a certain pleasing heaviness enter his soul. Its imprint was similar to how he felt around Anne. They hadn't made love in a long time. There was also this irritant of her profession. As a journalist, she knew too much, she knew how powerless he really was in his job. Whenever they were together, and he was moving inside her, he imagined a dent in his pleasure because of her knowledge and his knowledge of her knowledge.
Ah, but this woman. Couldn't she just stop screaming? "I am not going to force myself, you silly goat, I promise," he said, but it didn't seem to matter. He took her inside the bedroom, threw her on the bed and latched the door. The fucking hi-tech latch. He could never wrap his head around using them. He and she might be stuck here forever. He giggled.
She was sobbing now. The anger had dissipated. He felt sorry for her. But he could not allow regret or guilt. He had to have something to pass the day. Anything, but now it was this. Oh, just managing, what-was-his-name, Dappiano, sapped the life out of him. The discussions and the boring, boring conference calls. She should understand that. "Why don't you understand," he said to her, but she kept sobbing. "Just spend some time with me, is all," he said, "and then we can go our own way."
She looked up at him now, and her eyes gleamed with the freshness of tears. "Ok," she mumbled. He thought he didn't hear her right. "Yes?" he asked her, and she nodded. He was very happy. As he walked towards her, he thought: Now I can do it, now I can do it. But he was not sure what he meant to do. Fuck her? Live the day? Locate meaning?
He took her in his arms and kissed her hair. She embraced him haltingly. He kissed her on the chin and took her hand to between his thighs. He saw himself all suited up, speaking to the press in that sophisticated voice of his, and the memory of this moment pressing him on. He took out his tongue and reached for her mouth. She turned away her face. He smiled. He liked this woman. Maybe he would check up on her later. She looked Oriental, but he could not place her. For all he knew, he may have signed a deal that affected her and her family. Yes, he was quite certain she had personally benefitted from his largesse. And here she was now, in the arms of her benefactor. He was satisfied she was thanking him in this special way.
He was big now and wanted her to take him in her mouth. "Go down," he said softly, and held her head to direct it. "I need a minute," she said. "Sure," he replied, a tad too formally, but the world knew he was a stickler for day-to-day decencies. She lingered, then got up, and left the room. He stretched himself and brought his arms behind his head as he rested against the too-large pillow. Dreams of the day floated before his eyes.
A minute passed, maybe two. She did not return. He decided to go call her. He came out of the room and checked the bathroom. The suds in the tub were now floating like less sticky versions of themselves. But there was no sign of her. "Oh," it occurred to him suddenly. "Oh that bitch," he muttered, and checked out the vast suite with shocked eyes. It was beautiful. A bunch of fresh tulips, their slender stalks hidden in the depths of a rotund Japanese vase, made an offering of peace. He was almost ready to accept it, but how? How could he? She was gone and he was left to face the day alone. He massaged his forehead, benign with the loss of lasciviousness. He heard hurried footsteps. There was commotion. A small crowd gathered at the door. Everyone stared at him. She was there too. She was there, pointing a finger at him, a small, culpable finger, her face devoid of emotion. Oh no, he thought. They started moving towards him and there was only so much time to absorb this. But at least, he said to himself, there would be a different texture to the day. At least he would be in the dock for pressing his imprint. He tried to mind the fracas, tried terribly to mind it, but could not bring himself to.
Saturday, April 23, 2011
Wednesday, April 20, 2011
There were parts of him that were so used to being by himself that this new feeling could be no less than unsettling. He was very happy around her, especially in the way he portrayed a particular prototype of the relationship that he had always hoped for himself. He called her “sweetie” and “hon”, and whenever he did so, he felt a frisson that was laced with love but had edgier contours. When they exchanged messages, he felt masculine and exhibited himself in a way that played to conventional notions of chivalry. He was happy.
But he was also vulnerable. With friends, he felt the loss of a spontaneity. He attributed this to a general awareness and carefulness with everything. He could no longer be cavalier, he had a stake in things. Earlier, he saw himself as a benevolent patriarch who could dish out advice to all and sundry. The fact that he had never walked these roads provided his views a clear-eyed objectivity. Now he watched his step. He came to the realisation that people grow special in the course of things. Equations change, and so must the dynamics.
They met often. They made plans to meet out for dinner but invariably she would leave office early and he would find her waiting for him when he returned from office. It was a strange encounter. When he saw her cooped up in the watchman's chair, his first reaction would be surprise, maybe even distaste. Hadn't they spent all afternoon texting each other the elaborate plans for the evening? Hadn't he imagined to death what perfume to wear and what look to, when he met her? But there she was, awaiting him, as he walked in all tired and wilted from the day.
He would take her to his apartment and replay the act. Again, he felt the sudden onset of a gravitas that made him a little selfish for life. He could not be as giving with his friends anymore, because he had to reserve a part of himself for her. There were limits to his personality and he had to make sure he allocated enough to take care of everyone. Especially her.
He held her at the waist as she rolled her arms around his neck. They kissed. Sex was not part of today's programme. But around her, sex lost the connotations it held when he was by himself, acquiring simpler, more innocent meanings. When he softly bit her ear, it followed in the natural order of things, not something that acquires a life of its own. Their lovemaking was interspersed with moments of real tenderness, and when he kissed her forehead, he looked at her with such love she was overcome with emotion. The tears stayed in her eyes since he cupped them with his hands and kissed them.
Afterwards, they went to McDonalds, and ordered combo meals. She ate from his plate with an abandon that made him feel wanted. When he was about to put a sliver of French Fries in his mouth, she made a small noise and when he looked up, he saw her mouth open and eyes closed in the expectation of feeding her. He laughed a tiny laugh. She thought he was laughing at her childishness, and smiled. He knew he was laughing at how this person was beginning to take him out of himself in a matter of days. There is God, he told himself. Things have a logic to them that is best described as random.
With every meeting, he was growing surer of himself. He was investing more and more of himself in her. He knew he intellectualised everything to make sense of things. But within him existed a template that welcomed hurrahs of joy at the slightest instance, a template that was gravid with immense love. She made him acknowledge these with a certainty that he had lacked so far. He could shut his mind around her and believe in the randomness of things. It was possible. It was possible to live like the others.
He had hoped it would be a life-altering experience. All this time, he had expected a love so wholesome it would sweep him off his feet. Every day, he eyed girls longingly and often imagined them imbued with characteristics greater than they actually possessed. He would see a woman enter the lift at office and her cool femininity would be an almost physical presence that held the stultified air inside the elevator together.
When they finally met, it had been after weeks of online interaction. He had located her on a site that offered "stable connections in an age of instant gratification". Her profile was called hafnium and she defined herself as "malleable and ductile, like the metal". He thought and hoped that she meant this in an intellectual way, and was relieved to realise, on chatting with her, that she did.
At first, she was cagey, not willing to reveal her real self and making up all manner of excuses to avoid speaking to him. She asked him for his mobile number but did not reveal hers. One time, she logged off abruptly at a point in the conversation that was serious and well-going, so that he seethed, and wrote her a scathing mail, calling her names and debunking her profile as fake.
But every time, she returned and was apologetic. And he, who had waited too long for a connection, and was no paragon of stability himself, understood her behaviour and attributed it to latent anxieties. Perhaps it was this lack of propriety, a sense that they were buddies who could give each other shit and live to give some more, that cemented their bond. Their conversations became more relaxed, and finally, they decided to meet.
She lived in a posh locality in the city's south. He worked in the suburb. They decided to meet after office hours at a CCD in
They ordered coffee. Every time they did anything that involved interaction with someone beyond the two of them, he felt different, more ponderous. With her, he felt a lightness that smacked of a lack of responsibility for anything. She was sweet, talking to him with childlike enthusiasm. It seemed to him that she trusted him and that he could trust her too. It was about nothing more than how forward she was in her ability to make him feel comfortable around her.
He knew her, he felt he had known her a long time and this was merely a formality that they had decided to follow through with. He asked her to come to his house, an apartment in the city's suburb, close to his office. She agreed and in the auto, held his arm with a firmness that made him feel special and protective towards her. When they reached his house, she kissed him with a sweetness that was more tender than sexual. This made him bold and he kissed her back, and they lay in each other's arms in silence for some time on the sofa in the drawing room, with the tubelight illuminating everything in a soft white hue.
He nudged himself within the folds of her neck and she sat on his chest. They giggled in a way he had not giggled in a long time and he was surprised to rediscover this side of himself. She unbuttoned him and kissed him softly. He smiled, and his smile was a mix of pleasure and tenderness -- a sensation he could not quite place, and which was slightly unsettling. She took him in her mouth and he could not decide if this was great or some sort of a climb down from a lofty ideal in his head. He had come to love her, he suddenly realised, in the course of the evening, and was not sure if this act was cementing or diluting that. He felt he ought to be true to himself and tell her to stop but that prospect opened the gulf of some unknowable fears within himself and he decided to let her go ahead with it.
Afterwards, she was as sweet as before but he felt the collapse of something fragile. He was the same with her, but the glorious white of the room had taken on menacing undertones. He was not sure why. He had read too may stories that played to this stereotype of the male reverting to himself after sex, thus proving the worst apprehensions of women. But what he felt was not that. What had transpired was love at first and something animal-like later, and he could not quite place the two together. He was happy and relieved and spent, yet his heart felt light in a way that he was not used to with her. He felt the burden of sexual encounter clouding their subsequent meetings and an unwritten contract calling for a certain ...what was it? seriosuness? joylessness? answerability? between them because of what had happened. He questioned that. He was no chauvinist. He just preferred how things were up to now, even if that was not sustainable.
The thing was running according to script, but all along he had expected the numinosity of his expectation to meet with reality. Perhaps it was all just in his mind. But he had such notions of things that it was difficult to transact reality. He was such a romantic. He had hoped it would be a life-altering experience.
Thursday, April 14, 2011
Friday, April 08, 2011
And then he stopped working. He grew tired of all the running around and the hassles. He thought it better to go back to working at a regular IT company. She supported him. It made no difference to her. She saw their life as a beauteous extension of those heady initial days and nothing in their marriage had prompted her to question that. Oh, the seven years! She took more interest in the arts than he did. She read the papers with more vigour than he did. Her literary self grew in leaps and bounds and acquired a muscle she cherished knowingly. She was riding the back of a very powerful animal and the leash of that animal was in her husband’s hands.
For her life was all peaches. She was very generous. For him life could be compartmentalized. It was important to do so, he felt. It was in his nature but it was not in hers. They each had their own selves which they believed to be complementary to the other, but were really not.
So he stopped working at being an entrepreneur. She saw the reasons. They made perfect sense. He had been at it for seven years. But she felt a void suddenly. She felt the animal unleashed. She was dependent on him, his emphasis on work, his running around, to give meaning to her own varied interests. They were now orphaned. He had accepted an alternate view of the world, a world where the promise of things (entrepreneurship really, but she liked to think of it as wider and broader) could be frittered away and yet life carried on. She felt the loss of an anchor.
Suddenly she began living from day to day. She started finding reasons to be happy and acquired a glossary of words that she could throw around to sound intelligent in any conversation. She started developing her life around a mental standard that she was working on on the go. It was not as charming as earlier, not as spontaneous, but she was more stable, she felt safer. Only, she looked back with fondness for a more innocent time.
Their love grew different. It made little difference to him but for her it acquired a measuredness that she both admired and resented. She was now responsible for their happiness, she feared. She feared the complete loss of spontaneity. She wondered if she would be happier with another man, someone with whom she could go back to being her old self. But she loved him, and she also loved her new self.
Years later, she asked herself, would I revert to that original feeling? It mattered a great deal to her. She asked herself if she was selfish. But it was not that. She wanted her old life back, is all. Maybe all she wanted was the old feeling back. She was not sure, and she kept slipping between periods of painful certainty and an anodyne silence that didn’t last long because she was, she felt, in some state of shock.
She started to think of herself as separate from him but it did not work because they lived together. She thought she would be calmer if she stayed away but an experiment to do so at her mother’s filled her with life-sapping dullness and dread. She was in love with him, yet she was not. She could be perfectly happy if she rejigged her brain but it was beyond her. They still lived as a couple, doing things for one another, but she was not herself anymore. She was not herself in the way that she had come to define herself. If only she could find a way to live with the new her that she was discovering on the go, day to day.
She had her flaws. She felt she should do something constructive but always wanted spontaneity and a “love for things” to guide her decisions. That was erratic. And now she felt responsible. She resented that. She was selfish, she felt at times. But I only want “us” back, she said, and passed the blame. She liked her original self, but she also liked her new self, and wanted that the transition should have come at an opportune time and with smoothness. She cherished smoothness in all things. She wanted life to go swimmingly.
It was really about her, she thought. Her husband was only a conduit for her own persona, and he shouldn’t have to bear the burden. But she could not wrap her head around the new state of affairs. She also felt the rush to provide for them, if it came to that (she felt the need to reciprocate his efforts at running the house), would further dilute that old time, her former pristine self. She was fucked up, she told herself. But it had been wonderful.
Friday, April 01, 2011
Wednesday, March 30, 2011
In Blue Valentine, there is a scene where Cindy has invited Dean over to her house to make him meet her parents as the two are planning marriage. Cindy’s father quizzes Dean on his education. Dean hasn’t passed high school while Cindy is studying to be a doctor. When the parents bring this up, Dean says the following: “I know, she is about the smartest person I know. I would want to have a doctor like her. I would trust myself with her, my kids with her”. He says all this with the langorous pace that comes with speaking on the spot and that arises from genuine love. It is a masterful scene.
The movie is about a couple who, a few years into their marriage, are not on the same page anymore. Dean, played by Ryan Gosling, paints people’s homes for a living, while Cindy, Michelle Williams, is a nurse. Cindy expects Dean to realize his true potential, but Dean is quite happy with the life that he has. He loves his wife and daughter and does not understand why this much is not enough for them as a family. In another scene that burns on the memory, Dean wants to get intimate with Cindy who instead offers herself to him for fucking. Dean pleads: “Be good to me, I am good to you.” Cindy walks away and locks herself in the bathroom, weeping. She cannot locate the love anymore, while he is bursting to share it.
Saturday, March 19, 2011
Friday, March 18, 2011
They talked sometimes and her words seemed to spring from a part that was not her, that was more intelligent and more perceptive than she believed herself capable of. The other day, she saw him get up and arrange his things because he was getting ready to go home. He stared at his computer for a second and then, looking very serious, he switched off his computer and turned to leave. Just then, she asked him, "What do you ponder so hard, standing there, before going home every day?"
He stopped, startled, and turned: "Me?"
"Ah-huh! You stand there and look at the computer."
He laughed. He found it very funny, her observing him like that, when he was just waiting for the computer to shut down.
"Oh, I think about the untrustworthiness of womankind," he said and smiled.
"I wouldn't know about that," she said. "I have never been with a woman."
And they both laughed. And she was certain a gap had opened where none existed before.
The next day, he said hi to her and she waved back. She had taken special care to dress up that morning. Her skin was smooth and she felt light. She wished she would be held by him and their lips would meet. Sometimes she dreamt about that. Their lips meeting and he pressing down on her softly, his weight a sensation of such serene pleasure, she would wake up with a grimness she knew would last through the day.
She wondered what she should do to approach him. She felt it was for the guy to initiate the matter. But what did he feel for her, she wondered. Was he being flirtatious when he said he found women untrustworthy, challenging her to prove him wrong? She doubted he would say all that for any such reason. He was just being glib.
She told Naina, her childhood friend, about him, and Naina laughed at her shyness. "Just go and tell him, you fool," she admonished.
So, on the second Monday after she last spoke to him, she went up to him after the office had cleared and said, "I like you." All evening the weight of expectation had disoriented her and she felt she was floating above everyone else. It was an unpleasant sensation and she wondered if she should call the whole thing off. But she had pined too long and that other pain, slow and not sharp, was no less exasperating.
He looked at her, his eyes wide, and said softly: "What?"
"Well, I like you," she answered. "I have liked you for some time." She suddenly felt very brave as though she could accept anything at all. Everything that she had ever suppressed could come tumbling out, propriety be damned. If I was gay, I would accept that now too, she thought to herself and laughed at how weird that sounded.
"That's strange," he said. "I would have never guessed."
"And nothing. I don't know what to say. I guess I like you too."
She felt suddenly deflated, as though some dynamic energy was being sapped out of her. Is that all you can manage, she wondered, and it struck her that maybe he had never looked at her like that. Yes, that's possible, she thought and felt tired, and also a little ashamed.
"I guess I will go now," she said, and he nodded, and his nod was a gesture of such lovable simplicity that she wanted to move over and kiss him. Perhaps her eyes conveyed her wish and he looked down.
She turned and walked towards the cafeteria. She filled her glass with chilled water from the cooler and sat down at one of the tables. She tried hard to feel bad for herself, but she only felt stunned. How can such a connection be one-sided, she wondered, and downed the water in one large gulp.
She watched him walk to the loo and he was looking down, as he always did while walking. Often a light smile played on his lips but today he was withdrawn. Am I really in love with him, she asked herself, or merely with his face, his smile? He was not handsome, but there was a spark to him that she attributed to his quiet masculinity.
She came out of the cafeteria and walked out of the office. Her heart felt heavy and she did not know how to deal with that. She thought life was worth living and dealing with, but this new sensation was weighing down on her in a way she thought would change her outlook. She may begin to have her doubts about life, she thought.
She walked up to her car in the parking and eyed with longing his car that was parked some distance away. She heard footsteps behind her but decided to ignore them. She didn't feel like doing much and wondered if she should go back and get herself a cigarette. Absent-mindedly, she searched for her car keys in her purse.
"Hello again," he said.
She turned around and found him beaming at her.
"I just wanted to say sorry for behaving like a jerk inside. Thank you for saying what you said inside. But I have a girlfriend."
She heard his words as though from very far, and she took her time registering them. He is not declining me, she told herself, there is someone else.
"Oh, how nice," she said. "Whats' her name?"
"Geetika," he said. "She works at India Week."
She thought she had heard that name, but wasn't sure. "Ok," she said, and didn't know what more to say.
"I am sorry," he said, "but..."
"Oh that's fine, fine," she said emphatically and surprised herself. I must defend this, she told herself.
"I guess I will see you tomorrow."
"Yes, yes and have a good ...day," she stopped herself.
He smiled that heartbreaking smile of his and turned around. And then again she found herself standing in the darkness, cold and bereft.
She got inside the car and put the keys inside the ignition.
Once Harrah's realised that it could not match up to the Bellagios and Mirages of the world, it decided to forgo the capital-intensive expansion plan and instead, adopt IT to increase customer loyalty. The following questions answer some of the techniques they followed. Submitted as part of a class discussion on the HBR case.Q.1 Discuss the factors that drove Harrah’s customer relationship strategy.
Ans: When Philip Satre joined Harrah’s as CEO, he was focused on people management as his main strategy. While this helped the company initially, Stare found that a lot of cross-visits were happening in the gambling industry, that is, customers who visited Harrah’s were not repeating their visits. With rising competition and flashier properties, Satre realized the need for a new customer relationship strategy. The company, being an old player, could not replicate the kind of themed properties that were sprucing up in Las Vegas and other parts of the US. Times were changing with new capital investments happening in a crowded market to attract new customers, and a limit on the jurisdictions that allowed gambling. Harrah’s knew it had to come up with a new strategy to survive.
Satre identified that while the company was performing well on operational parameters and technological brilliance, it was not able to retain customers largely because of a poor marketing strategy. A friend advised him to tie his marketing strategy with operations, in other words, connect all Harrah’s properties with a single database and use insights gleaned from there to implement customer retention strategies.
The aim was to implement marketing tools and programs across all Harrah's properties. Company COO Gary Loveman disbanded the existing marketing function and rebuilt it with experts who preferred quantitative methods to qualitative inputs. Customer Relationship Management (CRM) at Harrah's came to consist of two elements: Database Marketing (DBM) and the Total Gold program. While DBM allowed Harrah’s to segment customers and sell them offers based on analytical inputs, the Total Gold program motivated customers to consolidate their play. The data collected through the program allowed Harrah’s to execute direct marketing strategies that increased the efficiency and effectiveness of the company’s marketing spend.
Q.2 What are the Key Performance Indicators of the gaming industry. What are the objectives of the various database marketing programs and how are they working?
Ans: The case identifies the following three metrics (KPIs) for the gaming industry:
1. Customer acquisition: The first phase, “new business”, is focused on customers new to the brand or the property. The goal was to encourage customers to take a second and third trip after making an initial visit.
2. Building customer loyalty: This was focused on customers known for at least six months or three trips. The goal here was to continuously extend the relationship.
3. Customer retention: This was focused on customers who had broken their historical visitation pattern. The goal was to reinvigorate customers who had demonstrated signs of attrition.
The objective of the database marketing programs was to improve Harrah’s performance on each of the above-mentioned KPIs. The company hired Gary Loveman from HBS to bring quantitative muscle to its marketing strategy. What Loveman and his team did was development of quantitative models to accurately predict customer worth—the theoretical amount that the company expects to generate from a customer based on his past usage of Harrah’s properties. This was a transformational move for Harrah’s. From a historical model of operational CRM that focused on the customer’s past usage patterns, Loveman proposed an analytical CRM model that was predictive and therefore, radically different from how the company viewed profitable customers. Analytical CRM was implemented through the following programs:
New Business Program:
The New Business Program was designed to improve the effectiveness at converting new Total Gold members into loyal customers. The program used predicted customer worth (theoretical wins) to make more effective investment decisions at the customer level—thus allowing the particular offer to be more competitive with what the customer was currently receiving from their existing scenario of choice.
Loyalty Program—Frequency Upside
This program was designed to identify customers that, Harrah's predicted, were only giving Harrah's a small share of their total spending in a particular market. Harrah's capabilities enabled it to develop programs that offered incentives for these customers to visit Harrah's properties more frequently—i.e., switch a trip from a competitor to Harrah's. Harrah's calculated the profitability of these programs by comparing the incremental theoretical wins to the incremental cost of the program.
Loyalty Program—Budget Upside
Harrah's also identified customers with budget upside—customers who were only giving a small share of their gaming budget to Harrah's on each trip. In most cases, a customer's allocation of budget was directly related to the order in which they visited casinos on a particular trip—the first stop received the largest share, the second received the second largest and so on. Therefore, the objective of this program was to encourage the customer to visit Harrah's first and thereby capture the majority of the single casino trips.
The objective of Harrah's Retention Program was to reinvigorate customers who had broken their historical visitation pattern. Harrah's tested a variety of offers with customer segments to determine how much to reinvest in retaining loyal guests. Harrah’s recognized that the full potential of these ideas would be realized only if these capabilities could be used at the local property level. Therefore, they made significant efforts in educating the local property managers and their marketing teams about the potential and effective use of these Data Base Marketing capabilities.
Q.3 Explain how the concept of customer worth/ customer lifetime value has been applied at Harrah’s casino in the Database marketing efforts to gain a competitive edge in the industry w.r.t key performance indicators.
Ans Basing customer profitability on predictive worth (customer lifetime value) rather than historical data, Harrah’s came up with a new model to improve performance on each of the KPIs: customer acquisition, building loyalty, and customer retention.
As an example the case mentions one Ms Maranees, who, under the new system, became a valuable customer who ought to be targeted with offers. This decision was made using decision science tools to predict customer worth rather than relying on observed worth from her first visit to the casino. While she would be considered a lousy customer based on her short visit to Harrah's, with the help of the information generated from one visit and one visit alone, Harrah's concluded otherwise by submitting her profile to the database. She was probably a great customer, but a great customer of Harrah's competitors. It, therefore, made sense to invest in converting her to a Harrah's customer. In the past, she would not have shown up on the radar screen.
Also known as opportunity-based customer segmentation, this process allowed Harrah's to track customers’ play preferences, betting patterns, where they liked to eat in the casino and whether they stayed the night, how often they visited, how much and how long they played. Combined with the basic information contained on the application card, which included birth date and home address, Harrah's could begin to develop a sophisticated customer profile.
Harrah's estimated that 26% of players provided 82% of revenues, with avid players spending approximately $2,000 annually. These "avid experienced players" that tended to play in multiple markets became Harrah's target customers. Using this detailed information for every customer, Harrah's predicted potential customer playing behavior at its properties. Harrah's compared observed to predicted behavior and identified opportunity segments based on a disparity between predicted and observed values. Harrah's used customized marketing to achieve specific objectives such as driving incremental frequency, budget, or both.
Harrah's quantitative approach also made it possible to conduct "marketing experiments" and track customers over time. This helped Harrah's discover the right marketing instrument, for the right behavior modification, for the right customer. One example in the case relates to how tracking customer behavior let Harrah’s cut down on costs by learning that certain no-frills, less attractive promotions were actually more profitable than big packages.
Another example is the eradication of "same day cash" at most Harrah’s properties—the process by which casinos returned a portion of a customer's bet each day with the hope that the customer would play more with the cash. By using sophisticated decision tools, Harrah’s learnt that it could eliminate "same day cash" without adversely affecting the business. Thus, the company was able to eradicate practices that did not contribute to incremental revenues.
Q.4 Does Harrah’s have a sustainable competitive advantage? Can other companies duplicate what Harrah’s has done? Discuss.
Ans. Harrah’s realized early on that sustained competitive advantage will only come from a rigorous customer focus and nothing else. Any other tool could only be a facilitator of the process. High operational efficiency and implementation of IT are but ways to ensure that the customer keeps returning to Harrah’s properties. Harrah’s has had a successful history of reaching the customer on a personal level by trying to learn as much as possible about them. This knowledge in turn helps the company to serve its clients better and also significantly improve its operational effectiveness. For example, if a customer lives close to the casino he/she will rarely receive an offer for a free night at the hotel since the likelihood of that person accepting the offer is slim. Conversely, if the customer is a regular in the casino’s restaurant, the chances he will accept a free steak dinner invitation are relatively high.
Attention to customers at the service level also matters. Most customers, as mentioned in the case, lose money during gambling and often feel “shitty”, and they are disgruntled. Good customer service will take care of such disgruntled customers and ensure they have a good time.
Apart from the above, Harrah’s has the option of protecting is innovative processes and knowledge through proprietary means. This will give its business the necessary edge without having to worry about competition trying to reproduce its innovative processes. Further, Harrah’s may license its intellectual property and earn revenue from its proprietary software.
Q.5 Discuss the privacy, ethical and security issues associated with what Harrah’s is doing. Are there concerns and how can Harrah’s address them?
Ans. There are a number of business practices that Harrah’s follows which may not be deemed entirely ethical:
1. Given the nature of their business, they promote gambling. People go to the casino because they want to feel “exuberantly alive”. Harrah’s works at enticing customers to feel the adrenaline rush of gambling. Most of their offers are targeted towards this. This has definite ethical issues since gambling can become an addictive practice and Harrah’s offers encourage such behavior.
2. Harrah’s IT system relies on tracking customer behavior, right from their playing strategies to their personal information including address and birth date. This raises issues of privacy, particularly when Harrah’s can track customers’ spending patterns on gambling. However, in times of social media, this looks less like a security issue than earlier. With Facebook around, concerns over Harrah’s privacy invasion sound overrated.
3. The bigger debate around data mining is the problem of sharing Harrah’s internal data with credit card companies. This sort of data cartel can have far-reaching consequences for a customer’s credit profile and ability to secure credit. So far, however, Harrah’s has not been accused of breaching this line.
4. Harrah’s also runs the risk of too much profiling through its data. Forcing behavioral/psychographic patterns on users can backfire, when all customers are looking for is a good time. Customers’ behavior in Harrah’s may only be a reflection of their less guarded selves, and an incorrect pointer to their behavior metrics and/or psychographic positioning.
Friday, March 11, 2011
There are several advantages to prediction markets:
- They introduce common sense to such basic management follies as beta testing taking more time than originally planned.
- They can be used to get a general sense of any project that is devoid of hard management considerations such as financial viability, expenses etc. In other words, whether the project has enough firepower to create buzz. This can be a potentially rewarding input for new technology companies, smartphone apps, etc.
- They can be used to check one’s intuition about a project: it can do wonders during those gruelling decision-making times.
- Prediction markets allow top management to keep the ear to the ground and not get carried away with their management-speak.
- Conditional prediction markets can be used to predict likelihood of events that are contingent on some other events. Often for financial managers, the choice is between two projects that look equally attractive from a cash flow perspective. Say, an FMCG company X wants to get into the biscuits space with choco-sandwich Y to take on entrenched rivals, or alternatively, expand its fast-growing potato chips business Z. Both projects look attractive from a purely financial perspective, and the marketing department has a mountain of data that is unable to help. In such a situation, a conditional prediction market can help with gauging the popularity of Y on purely consumer attractiveness measures contingent upon X taking up Y and giving up on Z. Or, consumers might like new variants of Z and that input will gather more traction on trades than the stock corresponding to launching Y.
- Prediction markets have major advantages in the political domain. Consider the current unrest in Libya. One question before president Obama is whether or not to exercise the military option. The US administration is chary of a quick decision because of the morass it finds itself facing in both Iraq and Afghanistan. Besides, the issue of body bags (bodies of dead soldiers from frontline areas returning to the US) has gained an especial emotional currency in the US. If the President did not want sophisticated military models to drive his decision and wished to read the pulse of the nation, a national, real-time prediction market can help. How the prediction market can help in such cases is by nuancing the debate with several viable options.
1. Threat of return to recession in the form of an oil shock should conflict in Libya prolong.
2. Strategic rewards from establishing a no-fly zone over Libya
3. Arming the opposition rebels and defending them from aerial attack launched by Gaddafi’s forces
4. Perception of Americans on war, ranging from important (defeating communism in Vietnam, terror post-9/11) versus cautious (messy states with a history of perennial conflict)
Would managers want prediction markets?
At first glance, any manager would be skeptical of prediction markets since leaving out the decision to a diversified marketplace is fraught with danger. There is the chance that a rival manager in another department might strategise to “play” the market. But this argument is not right since it overplays the role of the individual investor (to borrow stock market terminology) in market trades.
There is another risk to managers from prediction markets. What if a prediction market is able to accurately and consistently predict information that companies pay to get from marketing research personnel? This would jeopardize a number of jobs and lead to much bad blood on the ground.
Most managers will likely not want a prediction market to suggest negative outcomes for their products/projects. The risk to management from a prediction market comes in the form of dilution of “information asymmetry”. We know that a prediction market, much like a stock market, endeavours to reduce the information asymmetry that surrounds any product/project. Managers often play upon this asymmetry to sell their projects. A prediction market will substantially reduce the agency cost associated with running an enterprise.
There is another risk that prediction markets pose to middle management. If top management begins using them to listen directly to the employee workforce, then the best ideas, the most exciting innovations will directly reach the top management without the filter of the middle management, and this may not go down well. Such “disruptive information flow” can engender new ways of intra-organisation communication at multiple levels.
However, for obvious reasons, prediction market trades will be but one factor of consideration in the final decision. So the input should be welcomed and not feared.
New technology companies use different ways of boosting innovation, for instance, Google allows employees 20% time to work on something they like and which can later develop into a sellable product. The real learning here is the focus on incremental innovation, as against hankering after a blockbuster product. Apart from the pharma space, where revenues are typically driven by blockbuster drugs, most sectors will do well to tap the productivity of their workforce. Prediction markets can help bridge the current gap in realizing incremental innovation.
How to get employees interested in prediction markets?
Between cash awards or other soft awards, there is another system called the lottery system that makes better sense since it would promote the kind of behavior (participants should bid based on true beliefs, and not financial incentives) that is desirable.
However, cash awards in themselves are not a bad idea. There is the fear, in my opinion unfounded, that if cash awards become the basis of reward, then some employees would bet on an extremely unlikely event and win big if that event actually happened, but incur no financial loss if it did not. But this is how any efficient market, in the sense of the term coined by economist Adam Smith, functions. Traders buy and sell stocks on any number of parameters ranging from personal bias to deliberate strategizing. To expect an intranet to not ultimately follow such behavior is to miss the point of a prediction market.
Another positive of prediction markets is greater cohesion within the company, since they induce people to show their intuitive superiority in a quantifiable way. In other words, it earns them “bragging rights”. In this regard, T-shirts or other soft gifts make little sense since they would not entice someone to actually log on and start trading. They may only act as a hygiene factor for people already interested in prediction markets. However, to really scale up the technology, hard cash/lottery needs to come in.
Prediction markets can only work if there is enough liquidity in the system, in other words, if more members login and join the trades (Metcalfe’s Law). After the initial euphoria of the early traders, hard incentives will need to be brought in to increase liquidity.
(Part of a writeup submitted for a case in the Management of Information Systems course, Term III, MBA)