A Process of Continuous Innovation: Centralizing Analytics at Caesars

Caesars Entertainment’s analytics organization wasn’t formed for incremental gain, according to chief analytics officer Ruben Sigala; the expectations — and deliverables — are much bigger than that.

With a MIT-trained economist and former Harvard Business School professor at the helm, Caesars Entertainment has become the poster child for how analytics can work successfully in the enterprise. CEO Gary Loveman is vocal — and frank — about his organization’s reliance on analytics to guide business strategy, operations and innovation.

But even Caesars has had to readjust at times.

With more than 70,000 employees and casino resorts on four continents — the company primarily operates under the Harrah’s, Caesars and Horseshoe brands, in addition to owning the London Clubs casinos and the World Series of Poker — Caesars has built its reputation on knowing its customer base. It builds this knowledge by using analytics to create a rich customer experience, marketing to customers based not only on their preferences but their actions while at a Caesars property, including whether they’ve had a winning day or a losing one.

Over the past several years, Caesars has undergone a reorganization, in part to centralize its analytics functions. The goal: to build a deeper understanding not only of customers, but also of operations — everything from food and beverage analytics to labor analytics. Ruben Sigala, chief analytics officer at Caesars, talks with MIT Sloan Management Review contributing editor Renee Boucher Ferguson about that process, some valuable lessons learned, and where innovation and intuition play a role.

Lets start with how it is that you’re using analytics throughout your organization.

Our organization is exclusively devoted to the use of analytics. We are the consolidated and centralized analytics department for the entire enterprise. We provide analytical support for every aspect of the operations in every jurisdiction. We’ve got a number of sub-units that effectively represent the most highly leveraged or complex areas of analytical support required across our operation, and a supporting work structure against each one of those.

We have gaming analytics, revenue management, finance, marketing analytics, hotel ops and labor. There is also a casino marketing analytics group, an advanced analytics group, and a data logistics organization. Finally, there’s also an on-property analytics team.

When you hire for each of these organizations within Caesars, do you look for specific skills within these areas, or do you train for those areas?

The short answer is yes to both.

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3 Comments On: A Process of Continuous Innovation: Centralizing Analytics at Caesars

  • Thomas Kaczmarek | July 30, 2013

    I teach analytics and BI classes in a professional degree program at Marquette University. I decided to run a seminar this fall on Innovation. I found this interview very relevant to some of the ideas I want to discuss with our graduate students. In a world where the usual interpretation of CI is Continuous Improvement, I think a discussion of now to change that to Continuous Innovation is a great launching point for discussions.

  • Nate Granatir | February 15, 2014

    I don’t want to be a buzzkill, but I found this interview to be pretty worthless. If a person isn’t comfortable getting into the specifics of what they do, it’s probably not worth interviewing that person. Many of the answers were written so generically and broadly, that anyone – even someone who does not work at Caesars – could have given the same answer.

    For example, this paragraph: “…these partnerships have been a pretty meaningful way for us to advance our capabilities. There are groups who we’ve used for short-term projects, and others who we are evaluating as longer-term partnerships. Those partnerships, we feel, align from both a skills and cultural standpoint to deliver long-term mutual gain. Under the right circumstances, we could have very long-lasting relationships with certain providers.”
    All he’s done here is defined the word “partnership.”

  • David Dunworth | October 22, 2014

    As a Diamond Member of the Harrah’s Total Rewards program, I have personally felt the negative sting that comes from managing the company “from the analytics.” When one takes into account that an individual can go from one to 60,000 points in less than six months is not only remarkable, it should be rewarded. Yet in the case of Harrah’s, an individual is punished. Once play at that level falls off for whatever reason, the only analytics that seem to matter is “what have you done for me lately.” Nothing from the past seems to matter, it is today or tomorrow, not yesterday.

    It is this attitude that in the long run will continue to plague the churn that Harrah’s will ultimately feel, as more and more loyal customers gain a more bitter taste from their blatant abuse of the customer.

    Has my activity diminished? Am I visiting casinos less frequently? No. I am making choices based on how I am treated, and Harrah’s takes a short term view on what is a life choice type of business. Are gamblers fickle? Maybe, but fickle has a cure; take care of the customer as though you want to be treated. The casino executive knows little about actually caring for the customer. I speak with some authority having spent an entire career in the world of high-end private clubs.

    As the Chief Operating Officer of two of the largest clubs in the country over a decade and one-half, I know what taking care of the Member is. I even spell Member with a capital letter because I understand how important they are. Harrah’s just doesn’t get it. Putting an analyst in charge of Member service is a big hint into their mentality.

    Have I spoken up in the past? I answer every survey as blatantly candid as I do here, and I am surveyed a lot. Have I spoken to my executive host? Too many times. Have I received a new host? A few times. Am I demanding? More and more every visit.

    Have I ever received a phone call from corporate? Never, even though I ask for someone to contact me in every survey. Do I think they read my survey responses? I sincerely doubt it.

    Good luck with analytics alone and running a successful company.

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