Notes

[MUSIC]
So I want to talk about a couple of
examples about companies
that have used information technology and
specifically the data about their
customers.
To come up with business models that are
quite distinct, from product centricity.
And so two examples I want to share with
your very briefly, would be Harrahs,
the casino chain here in the US, and
Tesco, grocery retail chain in the United
Kingdom.
In many, in many ways the stories are
quite similar.
Despite the fact that they're very
different
companies operating different businesses
and different geographies.
In both cases, these were companies that
were getting beaten up in their
businesses.
They weren't nearly as large as some of
their competitors, they
didn't have the resources to compete
head-to-head, in a traditional,
product-centric manner.
And so they turn to the data.
They turn to a deep understanding about
their customers to draw insight and
to let them change their business models
in a way
that actually let them rise to the top of
their industries.
So let's talk first about Harrahs casino
chain here in the US.
They're having a hard time competing
against other
chains that just had deeper pockets,
greater resources.
It was hard for them to develop the
products
and services to compete on a head to head
basis.
So Harrah's instead turned to its data,
and in particular, developed an amazing
loyalty program.
Now many companies develop loyalty
programs, but
few of them were able to draw the
actionable insights that Harrah's was to
truly understand
at a granular level what each customer's
doing.
Not only which games they're playing, but
what meals they're
eating, what room preferences they have,
what entertainment options they seek.
And to understand, when that customer is
likely to change his behavior,
when he's likely to walk away from the
table, and what kinds of
things that Harrah's itself could do to
change their behavior for the better.
What kinds of messages and offers to
provide, at the right time, and through
the right channel, in order to create and
extract more value from that customer.
So Harrah's was just brilliant in drawing
those
insights and understanding, for instance,
what someone's threshold was.
If this customer goes down about say,
$150, it's time to intervene.
It's time to offer them a meal or some
kind
of other activity which is going to make
them feel great.
But equally importantly, is going to reset
their mental account.
And so when they sit back down again,
their threshold is back towards zero.
So Harrah's was very smart about
understanding that kind of messaging.
And it's a very similar story for Tesco.
Again,
a, a competing very, very tough with other
big grocery chains in the UK.
Sansbury, Morrisons, and so on.
They turned to the data, they developed
the OLC programme.
They really understood their customers in
some
very clever ways, they would understand
which
households were buying a lot of their
meals and, and other products from TESCO.
And which ones weren't and specifically
which
kinds of products were the light
households
not buying from TESCO.
So, Tesco knew which kinds of coupons to
send to which kinds
of households, at which time, in order to
get them to buy more.
And this helped them not only grow the
business with
those customers, but also helped them to
compete more effectively.
So when Wal-mart bought a small chain and
entered the UK.
Tesco knew which customers were most
vulnerable to switch to
Walmart, and which products they'd likely
buy from Walmart.
So Tesco knew, again, which coupons to
send to which households, at which
time, in order to really hold on to those
customers and bolster their business.
So by understanding its customers.
TESCO is able to do a great job defending
itself against Wal-mart
and, and staying at top of the grocery
business in the UK.
So those are only two examples of
companies
that have turned to the data in addition
to developing fine products and services
but really leaning heavily on the data
and a rich deep understanding of their
customers.
In order to pivot their business model, in
a way
that they could never achieve, through
products and services alone.
[MUSIC]