What Stays in Vegas Read Online Free PDF Page A

don’t understand: we’re the Rio, you know, and all we’ve got to do is get the panache back in the Rio.”
    A look of stunned disbelief seized Loveman’s face. Within a few weeks the Rio’s longtime general manager was gone. 9
    Loveman learned from his off-pitch initial board presentation and changed his tone. The former academic diffused tensions with biting humor, including self-deprecating jokes, and slowly won over members of the team. He communicated effectively and clearly, and he wowed people with his knowledge. But he never became an easygoing, backslapping kind of executive. He was not the type to ask random visitors about the wife and kids or wander through hotel lobbies to greet guests. “I don’t think there are very many customers who ever said, ‘Gee, I really love Gary Loveman,’” says Satre.
    In his heart, Loveman remained simply a numbers guy, a math nerd. He had traded the classroom for the corporate boardroom and was earning money beyond the wildest dreams of most academics. Yet he still thought like a professor. Following the logic of his famous 1994 article, he focused on building long-term customer loyalty. Nothing spelled success better than customers coming through Harrah’s doors again and again.
    The Elevator Pitch
    At every turn, Loveman sought to use data, whether about an individual client or a large group of clients, to gain an edge. One day in the early 2000s, inside a wood-paneled elevator at Harrah’s Hotel and Casino on Las Vegas’s fabled Strip, an older couple were grumbling to each other. They liked playing slot machines, but their luck had apparently run out.
    â€œI hate Las Vegas,” the man said to the woman.
    Loveman, who happened to be in the elevator with them, grew curious and decided to strike up a conversation. He learned that the couple were avid gamblers from Philadelphia who usually played at Harrah’s in Atlantic City. When he asked them why they hated Las Vegas, the man answered, “The slot machines here are so goddamn tight! We never win any money!”
    As Loveman replayed the Philadelphia couple’s conversation in his mind, he experienced a “eureka” moment. When it came to slot machine odds, the couple had no idea what they were talking about. Infact, no gambler could tell if a slot machine was loose or tight—with especially good or poor odds—and data could prove his point.

    Exterior of Harrah’s Las Vegas Hotel and Casino in Las Vegas. Source: Author photo.
    Loveman knew Harrah’s slot machines in Las Vegas were looser than those at its property in Atlantic City, returning $95 of every $100 plunked into them. In Atlantic City the company had the machines return just $93, giving them what the industry calls a slot hold percentage of 7. The wheels of his business mind began to spin. Slot machines make more money than anything else in casinos and do not require the extensive costs of table games to operate. Nothing was more important to the bottom line. 10 From the Philadelphia couple’s experience, Loveman concluded that a customer has very little capacity to tell the difference in holds from one machine to another. Increasing the hold, even by a tiny amount, might send profits through the roof.
    Soon after the exchange with the couple in the elevator, Loveman brought the idea to Harrah’s executives. Some on the team resisted. At the time, conventional wisdom held that especially generous slot machines would lure customers into casinos and earn the company more money. Harrah’s had even kicked around the idea of launching an ad campaign highlighting the generosity of its slot machines. No one wanted to change tack just because of a rookie executive’s chance conversation in an elevator. Loveman needed hard evidence. He loved such a challenge. The idea of developing a way to demonstrate conclusively that the public couldn’t perceive the worsened odds