Harrah’s high Payoff from Customer Information
Date: 16th March 2006
1. Discuss the factors that drove Harrah’s customer relationship Strategy.
a) Integration of various casinos – This was the most important and effective step taken by Harrah. The integration helped them maintain commonalities in the gambling experience for customers. This in turn helped them in building a brand for the organization and subsequently increasing their customer base.
b) Customer relationship Management through IT – The decision to use information technology for CRM had been very successful and has helped Harrah retain and capture new customers. The Information technology system consisted of the following parts:
a. WINet – WINet helped the organization to collect customer data from various source systems, integrate the data around customer and thus analyze and identify target market segments and offers to introduce. b. PDB – PDB served as an operation data store and provided a cross property view of its customers. Day to day data about each customer’s games, profiles etc. are collated and stored in this database and the data is available to the employees by customer, casino, hotel, event, gambling product, and tracked play. c. Marketing Workbench – It served as Harrah’s data warehouse and was sourced from the patron database. It stored daily detail data for 90 days, monthly information for 24 months and yearly information since 1994. It was used by marketing analysts to determine each customer’s preference and predict the services and rewards that they will want.
c) Closed loop marketing – Harrah used closed loop marketing to make the offers and rewards offered more beneficial for the organization and increase customer satisfaction. The effectiveness of each offer and reward was tracked and improvements were made based on the action/non-action of the customer. Over the years, intuition based beliefs “Harrahisms” developed and the management developed an intuition of what offers to offer to which customers. The main goal of closed loop marketing was to influence positive changes in customer behavior which it was able to achieve as is indicated by the data in the case.
d) Customized incentives for customers – Harrah offered different incentives to different customers which were suited to them. Eg. – Hotel vouchers to out-of-state guests, while free show tickets for customers who made day trips to the casino. Using customized incentives Harrah was able to establish, strengthen and reinvigorate the relationship depending on the position of the relationship with the customer in the customer relationship lifecycle.
Q 2 Discuss whether Harrah's business and IT strategies were aligned, and what factors contributed to or detracted from achieving alignment.
Harrah business strategy focused on customer knowledge, giving customers great service and rewarding their loyalty so that they seek out a Harrah casino wherever and whenever they play. Hence the need to understand and manage customer relationships was critical to Harrah’s business strategy. In order to understand customer behaviors, preferences and manage customer relationships Harrah’s IT strategy was derived from its business strategy. The data about customer gambling habits like place of gambling, frequency of gambling, game preferences and gambling amount would come from all the customer touch points (Harrah casinos) and the customer demographic data would come from various supporting hotels in Harrah’s casinos. The customer would be rewarded based on their frequency or the amount of gambling. This data would come from various slot machines in Harrah’s casinos. Hence an IT strategy was formulated to capture different kinds of data and to process the same for business decision making. The IT strategy included linking all the Harrah’s casinos and...