Managing Customer Profitability at MGM Grand Hotel

Topics: Las Vegas Strip, MGM Grand Las Vegas, Kirk Kerkorian Pages: 1 (371 words) Published: November 1, 2014
Slots, Tables, and All that Jazz: Managing Customer Profitability at the MGM Grand Hotel Below are suggested questions for the case of MGM Grand. As usual, you can skip any question that you think unimportant, and you are encouraged to address issues not listed below. 1. Using the information in the MGM Players Club dataset, discuss the differences in the various segments of players at the MGM Grand. Some hints for potential analyses: a. Begin by classifying customers according to their attractiveness from a static point of view (i.e., current profitability). Measure the concentration of profits. b. Look at some aspects of behavior of the different groups (you can use as cut-off points total theoretical win of $500, $10,000 and $100,000):

i. Number of trips
ii. Trip length
iii. Whether they play in tables or slots
iv. Loyalty to a certain property
c. Expand your study by measuring attractiveness from a dynamic point of view (i.e., current and future profitability). The three-year span of the databases is insufficient for a rigorous lifetime value analysis but adequate for a discussion of basic concepts and tools used to assess customer attractiveness. For instance, what player characteristics in 2002 increase the likelihood that the player will come back in 2004?

2. How does the MGM Grand derive value from its Players Club program and its player information systems?
3. Do you think it is appropriate for hosts from any property to have access to the entire profile of a specific customer, regardless where that customer plays or stays? Why? If you think that hosts from a certain property should have access only to the information on customers’ play in their property, do you think there is anybody who should have a comprehensive view of the customer? 4. Do you think treating each property (MGM Grand, Bellagio, Treasure Island, etc.) as an independent profit center is the right approach to manage the MGM MIRAGE group? Why? 5. How should MGM view the...
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