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Vol. 4, No. 12, December 2008, Where Are They Now?

Harrah’s Hero

By Dave Bontempo   Thu, Dec 04, 2008

Satre enjoyed growing success of gaming industry

Harrah’s Hero
Jim Plunkett had the Heisman Trophy and the two Super Bowl rings with the Raiders. Phil Satre, his teammate on the defensive side of the ball on two straight Stanford Rose Bowl champion teams, fired a different type of long touchdown pass. His encompassed 25 years on the gambling gridiron.
Team Harrah’s subsequently became a powerhouse. Satre, a member of the gaming Hall of Fame, sparked Harrah’s rise through this multi-billion dollar industry. His stints in Reno, Las Vegas and Atlantic City spanned gaming’s monstrous growth. Serving Harrah’s as CFO and Chairman of the Board, he quarterbacked a small organization into a gaming giant.
When he retired three years ago to a life of philanthropy, consultation and management, Satre owned some impressive numbers. He’d helped Harrah’s grow from two properties to about 40 and counting.
“I feel fortunate to have been in the industry when it expanded well beyond the borders of Nevada and Atlantic City,” said Satre, who now lives in Reno. “We were confident enough to go to new markets and expand with the Harrah’s brand. It was exciting for me and the people in the company to be acquiring new properties and seeing our customer base grow. We had the tools to make it happen.”
Satre now heads Sierra Pacific Resources, the Nevada-based company serving 1.2 million electric customers and 145,000 natural-gas customers. And Satre’s name has been mentioned as a possible gubernatorial nominee in Nevada.
His influence encompassed a remarkable era. The Wall Street Journal once named him the best executive of the casino and hotel industries. His legacy began when, as general counsel for the late Bill Harrah, Satre was sent to Atlantic City in the 1980s. Gaming’s No. 2 heavyweight sported an immense drive-in market. Harrah’s offered a marina niche, less congestion, infinitely more parking and a sense of exclusivity than its mid-town competition. Little did anyone realize the company would eventually have four Atlantic City properties.
“We took the Harrah’s model from our roots in Reno and Lake Tahoe and moved it to Atlantic City during the early days of gaming there,” he recalled. “It was gratifying to take the concept Bill Harrah had crafted for 40 years and bring it across the country.
“Ultimately the success of Harrah’s in Atlantic City was really the success that powered the company. We were able to move into different markets, provide the cash flow and become prominent. These moves provided the strongest cash flows for the company.”
Each market presented a unique challenge. New Orleans, for example, initially struggled. Riverboats, by contrast, fared better. In many jurisdictions, particularly Atlantic City, Harrah’s positioned itself to exploit an emerging trend.  In Las Vegas, it grew to eight properties.
Harrah’s pooled its collective muscle. It thought big and scored equally well, massing a nationwide array of customers. A total (rewards) revolution ensued.
“We spent around $100 million to develop our patron data base,” Satre said. “Before that, we had been looking at rewards problems. We had a silo of rewards programs. You had one program in Atlantic City just for Atlantic City. You had one in Reno, you had one in Tahoe. The breakthrough occurred when we took the position of cross marketing and cross promotion for all the Harrah’s properties nationwide.
“It was the foundation for developing Total Rewards. Through the systems, when we started seeing the revenues hit in the neighborhood of $1 billion to $3 billion, we knew something was working.”
The company also knew what not to emphasize. The bells, whistles, glitz and glamour of spanking new properties did not define Harrah’s.
“The image of the company was based upon the experience the customer has with employees,” Satre said. “If you think about other brands, some were based upon a value, like Circus Circus. Some emphasized the physical attributes of the property. We expanded our brand in a way that we were not labeled as upscale or midscale. We had the flexibility not to be confined by the physical attributes of the company.
“You need to do that. In small properties like Indiana, for example, we would not have been able to expand if our brand was that Harrah’s stands for big hotels with lots of restaurants, retail and highly-themed casinos. I heard the word “saturate” a lot, but I was never worried, because every market is different. We leveraged the collective base of our customers and the great work of our employees.”
Ah, the big ingredient. Employees. Custodians of the realm. Maintaining harmony with them benefits every company. Satre did not want Harrahs’ growth to blur the lines of communication.
“We tried to make the employees believe that our success would be theirs,” he said. “Just like we have customer loyalty, we have the 401-k plans and try to be very accessible.
“I enjoy knowing the employees by name. As we grew to 40,000 of them, I knew I couldn’t get around to doing it, so we set up a way for them to reach out. It was 1-800-Call Phil. That went right to my office. Everything else for me was put aside. On that day, I took phone calls. People could call anonymously or give their names, it didn’t matter. I just wanted their ideas, insights, anything that was on their mind. The message was that employees are not just a number out there, they all have input with the CEO.”
The numbers of employees alone produces an excellent pool of ideas. It’s another strong use of leverage. With customers and employees, Satre demonstrated that people numbers lead to profit numbers. So does a sense of perspective.
“I learned early about what happens when you have big customers,” he said. “One night, we had signature customers from Hong Kong who came to play. The first time we won $4 million. The next time we lost $6 million. I learned that Hong Kong giveth and Hong Kong taketh away.”
And that a good system will endure the hit.

By Dave Bontempo

Dave Bontempo

Casino Connection Sports Editor Dave Bontempo is an award-winning sports writer and broadcaster who calls boxing matches all over the world. He has covered the Philadelphia Flyers in the playoffs, as well as numerous PGA, LPGA and Seniors Golf Tour events, and co-hosted the Casino Connection television program with Publisher Roger Gros.

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