What Stays in Vegas: The World of Personal Data — Lifeblood of Big Business — and the End of Privacy as We Know It
Adam Tanner
PublicAffairs (2014)

What stays in Las Vegas? An abundance of personal data used to achieve business objectives for casinos

Whenever I see a commercial promoting Las Vegas, I am again reminded that money won by gambling in the casinos usually stays there. I doubt if that fact can support a book but another fact can…and has: The gambling casinos there and elsewhere use advanced technologies and advanced analytics to obtain, process, evaluate, and then act upon consumer data. This process creates for them a competitive advantage. The subtitle of Adam Tanner’s book reveals his primary focus: “The World of Personal Data — Lifeblood of Big Business — and the End of Privacy as We Know It.” Indeed, in the new, rapidly expanding global marketplace, data are the new currency and some of the most valuable data are provided by consumers, whether or not they realize it.

All of the major research studies with which I am familiar indicate that, when identifying what is most important to them, employees and customers rank “feeling appreciated” among the top three and frequently #1. The more a company knows about a customer, the better prepared it is to do — and not do — whatever it must to gain and then sustain that customer’s trust and respect. This reality drives the process by which to create what Ben McConnell and Jackie Huba characterize as “customer evangelists.”

Companies such as Amazon, Facebook, and Google have refined a process introduced by César Ritz in 1898 when Hôtel Ritz in the Place Vendôme opened its doors. He was a passionate advocate of perfection in hospitality, insisting that it always be invisible. With regard to what became the institutional motto, “Ladies and Gentlemen Serving Ladies and Gentlemen.” Rules? He stated them clearly: “See all without looking; hear all without listening; be attentive without being servile; anticipate without being presumptuous. If a diner complains about a dish or the wine, immediately remove it and replace it, no questions asked.” According to Joseph Michelli, Ritz Carlton set “the new gold standard” for service. The foundation of its superior service consists of personal data about its guests and policies to accommodate their preferences.

Back to Las Vegas. Some of the most interesting and most valuable information in Tanner’s book focuses on Caesars Entertainment (later purchased by Harrah’s) and, more specifically, on Joshua Kanter and his the contributions to the emerging science of consumer data processing. Over time, Caesar’s implemented and then constantly fine-tuned a Total Rewards loyalty program for those who, annually, represent about 80% of a growth category: Those “far from lucrative on any one day, but in a year they might spend $1,500 to $5,000.” Kanter was a McKinsey alumnus. A consultant at Booz Allen Hamilton, Rich Mirman, was hired to focus on marketing to “new customers with bigger long-term (collective) potential.” David Norton was another strategic hire who also “thought a lot about the people traditionally ignored by casino management. He saw great value in the retired grandmother quietly feeding a steady stream of coins (and later paper) into the slot machines in the corner of the room.”

These and other examples illustrate a very important point: Until obtaining and then evaluating the data they needed, casino owners and their top executives were not cultivating the loyalty of those who could produce the greatest long-term ROI. Tanner devotes an entire chapter, Chapter 4, to explaining (a) what the casinos know about their customers, (b) how they obtained that information, and (c) how the casinos catch “whales” (i.e. BIG spenders).

Obviously, no brief commentary such as mine can do full justice to the scope and depth of coverage of material provided in this volume. However, I hope that I have at least indicated why I think so highly of it. Adam Tanner remains hopeful that companies will become more transparent about what they know about their customers and how they obtained that in formation but that seems highly unlikely. So long as consumers are willing to provide so much personal information to companies such as Amazon, Facebook, and Google, the value of that “currency” to these companies will continue to increase. What to do? There are some suggestions in the Appendix, “Take Control of Your Data.” Perhaps some readers will do that but few who bet against the house break even, much less win more than they lose.