Business Analytics

VSB’s Executive MBA students attend a symposium with Gary Loveman, President and CEO of Harrah’s Entertainment, and Dean James M. Danko (center).

Do You Think That or Do You Know That?

GARy LOVEmAn, CEO Of HARRAH’S EnTERTAInmEnT, InC., DISCuSSES THE POwER Of BuSInESS AnALyTICS TO CELEBRATE THE LAunCH Of THE nEw CEnTER

The Center for Business Analytics at the Villanova School of Business welcomed Gary Loveman, Chairman, Chief Executive Officer, and President of Harrah’s Entertainment, Inc., to speak to students, faculty, alumni, and corporate partners about how analytics enable him to draw inferences about customer preferences and predict behavior.

Loveman has developed and implemented the gaming industry’s most sophisticated and successful loyalty program, Total Rewards. At the center of Loveman’s strategy is a vast mathematical model that scores customers on how profitable they can be to Harrah’s.

During his visit to VSB, Loveman spoke about the key elements of and the practical relationships among employee satisfaction, customer satisfaction, and shareholder value. In his research, Loveman conducted thousands of trials to determine what motivates people to participate in gaming. Based on the analytical findings, he develops marketing strategies tailored individually to his client base.

According to Loveman, there are numerous opportunities for students to apply simple analytic methods to solve complex business problems and make better decisions. “Insights into what makes customers more loyal translate into higher profitability. we use analytics as a strategic initiative, even in tough economic times,” he says.

Loveman’s efforts also extend beyond the property. when a customer has not visited with his or her usual frequency, he will intervene with an incentive. His staff is trained to encourage customers to talk about their previous experiences, and then to listen for trigger phrases such as “hotel room” or “steak dinner” to come up with the most alluring offer. Once this data is collected and analyzed it will suggest the trigger the customer will best respond to. “Some customers respond best to a cash offer, while others are motivated by a free hotel room,” says Loveman.

Regardless of the trigger, the analytics behind the model and its results are impressive enough that wall Street analysts also are beginning to see the advantages of analytical data. “Loveman is recognized as one of the leading executives in effectively applying analytics, especially in marketing,” says matthew Liberatore, the john f. Connelly Chair in management and director of the Center for Business Analytics. “He is a former Harvard professor and author of a Harvard Business Review article, “Diamonds in the Data mine,” which discusses how companies can enhance customer

Professor Matthew Liberatore, Director of the Center for Business Analytics.

loyalty and profitability by gathering data to better understand and appeal to customers’ interests.”

Loveman’s visit to VSB was one in an ongoing relationship with Harrah’s. The company also invited a VSB analytics class to its Atlantic City casino for an inside look at analytics at work.

This event also marks the official launch of VSB’s Center for Business Analytics. The mission of the center is to address the integration of analytics, business intelligence, business performance management, and business process management for superior business performance. The center leads in developing the analytical capabilities of all students so that VSB graduates become known for this critical business skill in the marketplace, while VSB’s faculty and staff become recognized for excellence in analytics education, practice, and research. — Liz Field

Q&A

the Center for Business Analytics was established in April 2010 to lead the development of the analytical capabilities of students, faculty, and business partners. We spoke with center director Matthew Liberatore to learn more about his vision for the new center.

Q: Why was it important to you to have a Center for Business Analytics at VSB?

A: The Center for Business Analytics was formed to ensure that VSB students understand how analytics can be applied to improve organizational performance. The center will pursue a cross-functional approach in developing a curriculum in analytics that serves the needs of all of our students and provides more in-depth knowledge to those interested in this subject.

Q: How is the study of analytics becoming an integral part of the business world?

A: Most companies have massive amounts of data at their disposal, yet fail to use this information in any meaningful way. Increasingly, organizations are beginning to analyze this data to support decision making across all business functions. Students in the 21st century need to be comfortable working with data and understanding its meaning and value.

Q: How can businesses use analytics to better understand information or data?

A: Analytics can be thought of as a continuum of methods ranging from business intelligence, which includes summarizing, reporting, and querying data, to statistical analysis and data mining, which help uncover relationships and associations. For example, data mining can enable us to better understand customer preferences and pinpoint market promotions. It can help us understand the factors driving profitability, detect fraud, improve on-time delivery performance, and identify the most productive employees, to name a few.

Q: What companies use analytics most effectively? Are there any companies that do not use analytics at all?

A: There are a number of firms that are analytical competitors, including Harrah’s, Marriott, New England Patriots, Boston Red Sox, Proctor & Gamble, AnheuserBusch, Netflix, Google, Yahoo!, Progressive, FedEx, UPS, Schneider National, Walmart, Tesco, Sprint, Capital One, and Barclays Bank. Some companies are in the early stages of the analytics life cycle and are organizing data warehouses that will allow them to access and analyze business data.

Q: How will VSB students benefit from this center?

A: The courses we offer students will develop their analytical skills, which will help to further differentiate them in the marketplace. The center also will help students obtain full-time positions and internships to provide practical experience in analytics.