Tariq Shaukat: Finding —and persuading—persuadable customers

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Tariq Shaukat, Chief marketing officer, Caesars Entertainment

Tariq Shaukat,
Chief marketing officer, Caesars Entertainment

Total Rewards collects impressive amounts of data. What does all that information enable a CMO to do?

Like any loyalty program, Total Rewards allows members to earn their way to higher levels through interactions. Spending is part of it, of course, but we’ve begun to introduce ways to earn tier points based on social engagement, too. Thanks to the program, the majority of spending in our resorts can be tied back to specific people and three-quarters of gaming can be tied back to specific players. That enables us to be smarter about what a customer might value and what personalized inducements we can provide.

Personalized how?

Essentially, I’m talking about real-time marketing to individual customers. If I haven’t seen you for a while and you swipe your card at a slot machine at Caesars Palace or Harrah’s, I can send a message to someone on the floor along with a brief profile and they can walk over and ask if you need anything. We make sure it’s very low key; we don’t want to be intrusive. But we’ve noticed that our customers increasingly expect a host to come and say hello and that’s largely been triggered by the Total Rewards infrastructure. It’s not just having the data that’s important; it’s what you do with it.

It’s interesting that you refer to a loyalty program as an infrastructure. What does the supporting mechanism consist of that allows you to put all that data to work?

There’s a human touch to our business that’s really important. We have thousands of hosts and hospitality professionals who help us act on our data and they need to have a level of understanding about what actions to take in certain situations. But, for them to act, they need real-time or close-to-real-time information. So we’ve got a bunch of predictive models that allow us to quickly react when a customer might be more likely to consider playing with a competitor or when someone playing with a competitor might be more interested in playing with us. It’s all about reaching someone when they’re persuadable.

How do these models identify which customers are persuadable?

We’ve spent a lot of time in the last year tweaking and developing our models and we’ve found there are quite a few indicators that identify who’s persuadable. Some are obvious. We know we need to take action when a customer who used to come in 10 times a year is now coming in only six. But our models also can tell us when someone who is still coming in 10 times a year is at risk of declining. This is a new capability and it’s enabled mostly by increased computing and analytical power.

What are some signs of future customer attrition?

Luck is a leading indicator, and that’s pretty unique to the casino business. If you’re lucky with us, you’re more likely to keep coming back. This is something that old-school, superstitious gambling folks just know intuitively. Yet it has been very difficult to understand how lucky the 45 million people in Total Rewards feel. What you consider unlucky might be different from what I consider unlucky. So we’ve developed modeling around the psychology of luck, which allows us to understand the point where people start feeling unlucky. Obviously I can’t do anything to control a player’s luck. The odds are the odds. But I can offer to buy a steak dinner for someone who might be feeling unlucky, or to give them tickets to a show here at The Colosseum or at Planet Hollywood’s PH Live venue.

You’re responding in real-time to situations that make a person feel unlucky?

More and more so as the capabilities to do the math become increasingly robust. It used to take days to do the analytics that we can do in a few hours now. Then the question becomes, how do we reach out? Increasingly we know that if we just extend their experience, they’ll have a better time. People are always doing a time-to-value estimate in their heads. If you go to a movie with your family, you know you’re going to pay $50 for an event that will last two-and-a-half hours. With our business, sometimes you play for longer and win a lot more than you thought you would and sometimes it doesn’t work out that way. So how can we help mitigate that? Maybe we’ll send a host out to offer two tickets to Celine Dion. That’s a delight to players and it extends the time they’re with us and helps them feel they got more value. Right now we can do this sort of thing in hours. In the future it will be minutes, and that will be a radical change. We used to work off stocks of data; now we’re working off flows. As you start improving your ability to act on flows of data, you can respond while behaviors are still happening. And that is very powerful.

What information do you include in the models?

I can’t go into too much detail for competitive reasons, but basically it includes historical play, patterns of play, what else a customer has done on their trip, that sort of thing, to help determine what we can do and whether a rule will be triggered. It’s a fairly robust analytical approach and system that will automatically send a message to one of our hosts on the floor who can then offer a player a free meal at Old Homestead or maybe at Nobu, depending on what we know about your eating habits.

How concerned are you with customer privacy?

The short answer is we have a lot of rules in place to protect privacy and we don’t use third-party data that we think our customers would object to us using. But there’s also a level of expectation built up in our customers that, frankly, facilitates this whole thing. Probably a good 20 percent of the complaint letters that I receive are from customers who wonder why we don’t know them even better.

How does mobile fit in to your plans?

Mobile phones add location awareness. So if I know you’re walking by our Beijing Noodle Number 9 restaurant and we know you like Chinese food, we’d like to send a $10 coupon to your phone and let you know a table is available. That’s the sort of thing that we can’t do yet because the delivery mechanism isn’t ready, but it’s getting there. This is important because we have this enormous footprint where 100 million people walk through our doors every year and we control every aspect of the experience. So we can start merging insights about retail preferences with dining preferences with gaming preferences to get a really well-rounded view of what you like to do with your discretionary time and money. And we can use that in ways to provide more value to you.

Are you using mobile payments?

We’re aggressively exploring it because very few people want to carry their wallet to a nightclub or a bar and they don’t want to carry their room key either. So, how can we start making this a much more integrated experience? We’re launching a $550 million development on the other side of the [Las Vegas] Strip called The LINQ. It’ll be anchored by the world’s largest observation wheel on one end and then retail, dining and non-gaming pedestrian areas. We want our customers to have an app that tells them what’s going on and also gives them offers that they can redeem at, say, the Brooklyn Bowl and have their charges go directly to their room or to a Total Rewards credit card. You could walk around the whole area and pay for anything using your mobile phone. I think the possibilities, once you start having all of that, are endless.

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