Diamonds in the Data Mine & Harrahs

Diamonds in the Data Mine

For the last few years we’ve heard extensive horror stories about failed I.T. initiatives from Customer Relationship Management (CRM) to Enterprise Resource Planning (ERP) to Business Intelligence (BI) programs.  It’s seems for every success story there are ten or more failed initiatives.  And the stories of painful Electronic Medical Records (EMR) rollouts haven’t been terribly kind to I.T. practitioners either.  That’s part of what makes this story so appealing. 

One of the really big successes we’ve studied throughout my Master’s of Information Systems program is Harrah’s Entertainment.  This great success story comes at the beginning of the Business Intelligence push and the “Diamonds in the Data Mine” article is a step by step recipe for Harrah’s success.  I could go on for days recounting the building of the BI system and how they used data mining and marketing to build a better brand and expand their business, but that’s really boring so I am going to take a different tack. 

Aside from all the wonderful technical accomplishments, Harrah’s success story is actually a story of customer service.  While building a strong I.T. infrastructure is important, one of the things we as I.T. workers often forget to ask ourselves is “why are we doing this?”  We do it not because technology is cool, although that is certainly a side benefit for us that love the bits and bytes.  We do it in one way or another to serve our customers better.  It is my contention that Harrah’s successful use of BI was at least partly attributable to their focus on the “why” question. 

Harrah’s success is based not on technology (although that was an important piece).  It is based on their prioritization of customer service and giving their customers what they want.  While most companies give lip-service to the customer experience, very few really do anything to improve in this area.  Harrah’s used technology to figure out what their customers wanted and gave it to them.  In addition, they incented their employees to provide excellent customer service.  They DID NOT tell employees to provide great customer service and then incent them on bottom line figures.  They paid bonuses based on customer satisfaction ratings which were completely un-related to the bottom line.  This is revolutionary, and the reason (in my opinion) for Harrah’s continued success even in times of economic downturn. 

Harrah’s Entertainment, Inc: Rewarding Our People

While customer satisfaction is the end goal, it certainly can not be accomplished without the buy-in of the front-line employees who actually serve the customers.  While creating a good customer experience is often a topic of discussion at leadership levels, it’s rare that a company actually incents their employees to deliver that desired service level.  Even if they do, they don’t give enough guidelines describing the perfect customer interaction.  This is where Harrah’s really scored. 

A big part of the puzzle was finding the right people to provide excellent customer service.  This can sometimes be accomplished through standardized hiring practices, but is often a complete crap-shoot.  Having lived most of my life in Nevada, I understand the idea of being treated “like a casino employee”.  That’s not to degrade those who work the casinos, but they would tell you they are often treated as commodities.  This makes it all the harder to attract good employees.  So when you find a good worker, it’s very important (at least Harrah’s thought so) to keep them.  While most casinos don’t invest much in new employees, Harrah’s went the other direction providing training and several check points during the early stages of employment to make sure new employees understood their overall value to the company. 

As was covered in the Diamonds write-up above, Harrah’s used incentives as evidence to the employees that customer service was their main focus.  While the goals were steep and the rewards were minor, it was a bragging point for employees to get these bonuses.  It was especially notable that the bonuses were not tied to overall company performance.  If a property didn’t meet its bottom line numbers, but the employee met their customer service goals, they would still get the bonus.  While a token gesture, this really shows that the incentive is 100% about the customer experience and not bottom line figures.  This gives the employee a sense that they can control their bonus destiny. 

While I highly believe in the need for EXCELLENT customer service, it absolutely must not come at the expense of your employees.  As in the Harrah’s case, it must be done in partnership with them.  If you tell the employees that the customer matters but they do not, you will NEVER achieve customer centricity.  Harrah’s was successful because they trained their employees provide the desired level of service, and then incented them to act accordingly.  As has been noted, “that which is incented gets done.”

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