Harrah’s is a poster child for “predictive analytics” … using hard numbers to make good decisions.
Why then – asks the IO Creative Group of tiny York, PA – did the Las Vegas big boy casinos lose over one billion dollars.
According to IOCG, casinos attendance is up, their hotel stays are up, their night club business is up, restaurant and bar sales are up.
How could their profits be down by one billion dollars???
It is because of their belief that new customers were in order – which attracted a lot more customers who are completely NOT PROFITABLE.
These new Vegas fans sleep all day, party all night and do not gamble. They don’t shop nor do they utilize the services and amenities of the buildings.
Vegas became married to the idea that their money should be invested in attracting new younger, hipper, sexier customers and they achieved that.
What they failed to do was to invest in their current very profitable customers who were actually making them money.
Casinos got caught up in the “shiny object syndrome” — the need to go after something new when their most profitable market was already right in front of them.
When they were going after completely new markets, they should have been further investing in the one they already had.
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IOCG offers up a couple of ways to increase current customer “monetization”:
- Increase your prices 10%
- Offer a premium product to VIP customers
- Create a campaign for each of your current customers to introduce you to one more person
- Set a goal of 20% of your customers to add on one additional product or service into their current relationship with you
- Include a product or service in your offers that has such a high “pain of disconnect” that your customers are reluctant to ever stop your services
Source: IO Creative Group
Thanks to ST for feeding the lead