Another blog post about book excerpts (and a couple more to come) as I've had time to read more than just my Blackberry and computer screen (currently enjoying vacation in Chatham, Massachusetts). I am breezing through Christina Binkley's "Winner Take All: Steve Wynn, Kirk Kerkorian, Gary Loveman and the Race to own Las Vegas" (link on Amazon here) It's fascinating. Part of the fascination for me is around Las Vegas - but the (surprisingly) more interesting aspect is the business savvy, curiosity and ambition of tycoons Steve Wynn and Kirk Kerkorian.
Amidst the flashiness of what Wynn and Kerkorian were building, Harrahs built an equally successful business on a very different consumer and experience. There are other great excerpts - but the below is really striking as you consider, for instance, the big-spenders that Wynn chased with his $2,000,000,000 Bellagio... which is no longer the glitziest casino on the strip. It also shows the very mathematical and methodical approach that Harrah's takes to customer research and market (and they are the best in the world at it) - which stands in sharp contract to Wynn's very instinct-driven approach (which he has proven quite adept at himself):
"Morgan and Boushy identified a small group of customers who produced most of Harrah's profilts. It turned out that they weren't the flashy high-rollers. They were low-rollers - average Americans who spent between $100 - $499 on a gambling trip. These people made up only about 30 percent of gamblers, but they gambled so frequently that they accounted for 80% of Harrrah's revenue and nearly 100% of it's profits.
Harrah's decided to make these highly profitable customers its core audience, calling them "avid experienced players" or AEPs. "I felt like I'd discovered the Rosetta Stone of casinos," Morgan said several years later."