As indicated in an earlier blog post, I am a big fan of podcasts. Especially, National Public Radio’s (NPR) Planet Money. Last November there was one in particular that caught my interest: “From Harvard Economist to Casino CEO.”
Click here to listen: NPR Planet Money – From Harvard Economist to Casino CEO.
While I have not done any work in the gaming industry, there are many aspects of this story that parallels the work we do at Zinc. We look at behaviours of economic agents and behavioural change to improve the customer/stakeholder experience and an organization’s bottom line.
I encourage you to listen to this podcast and consider the following points that Gary Loveman addresses:
- Experiments in behavioural economics matter. Wherever possible, organizations need to design experiments in which actionable, efficiency-improving and potentially profitable benefits can be explored in environments and processes that are easily understood. Only by having a point of reference between two groups – i.e., with one control group where there has been no alteration in behavioural process – can organizations learn how to constantly improve and connect with the people that matter.
- Every interaction and touch point matters. Only by breaking down processes into their fundamental elements and doing an environmental audit of potential stresses or ways to create value, can the full customer experience be properly mapped and graphed to create improvement.
- Means of anticipating and engaging customers leads to better experiences and loyalty. As discussed by Mr. Loveman, it is essential to Caesar’s Palace that they focus on ensuring that specific customer segments do not have a poor experience. Using various tools, Caesar’s is able to triangulate data and better anticipate a negative customer experience, thereby ensuring they have the ability to intervene quickly. Through the use of incentives (see below) and interruptive behaviours, they make sure that their customers are aware that they are being attended to and that their best interests are being taken care of.
- Incentivization. Mr. Loveman highlighted that, in the midst of a poor experience, the ability to intervene to mitigate a potential poor experience and offer an incentive can substantially reduce any potential long-term negative sentiments. Such an incentive may come at a cost to Caesars, but in terms of the lifetime value of such a customer, this cost becomes relatively small compared to what that person may spend over a number of years. Incentivization also means that everyone within the corporation can benefit from understanding the customers’ operational processes that deliver upon, and hopefully exceed, the expectations of colleagues and the all-important customer experience.
- Behavioural economics can be a brand differentiator. Customers can easily recognize when they have had a more positive experience at one business compared to a competitor, thus investments in such research – to understand these dynamics, create experiments, and constantly do research into business processes – can lead to higher value and brand loyalty.
With this podcast in mind, consider how you would want to take such a learning into your organization.