BOX 4-1Using Data to Transform Business Practices

The explosion of data, along with new mechanisms for mining the data for insights, has transformed many businesses. One business that has made extensive use of this new opportunity is Ceasars Entertainment, which has focused on using data to improve its customer retention. These data originate from the company's loyalty program, Total Rewards, which has generated a customer information database that grew to more than 40 million members in 2010. The data, tracked by each customer's Total Rewards card, range from the total number of visits customers have made to a particular casino, to their buffet activity, to the amount of money they win or lose on an average visit. When it appears that customers may be frustrated in their experience, the company's analysis allows the Total Rewards staff to make data-supported decisions on the timing, type, and magnitude of promotional offers that have the highest likelihood of bringing those customers back. By tracking these offers and customers' subsequent visits, the company is able to monitor the success of the predictions. Through the use of evidence to predict the most effective offer for each customer, the company can ensure that a high proportion of customers will be enticed to return, which translates to guaranteed revenue for the business.

SOURCES: Greenfeld, 2010; National Public Radio, 2011.