What are the elements of Harrah’s business intelligence strategy? What specific initiatives have they undertaken to develop customer insight?
Harrah’s business strategy was hinged on three key aspects: 1) Excellent Customer Service 2) Focus on increasing customer loyalty 3) Geographic diversification. Harrah’s business intelligence strategy was very much aligned to support its business strategy. The two important elements of Harrah’s business intelligence strategy were:
1. Ability to combine data from all their properties and create sophisticated customer profiles
With an integrated IT network linking all Harrah properties, data is fed into a central data-warehouse. This data can then be sliced and diced to create target segments as well as create sophisticated customer profiles within those segments which can then be used to offer personalized services. Additionally the same profile can be used to offer customer loyalty program so that customer prefer to visit a Harrah’s casino across different cities.
2. Use decision science based analytical tools to run marketing experiments Harrah used sophisticated decision science based to tools to predict potential customer playing behavior and compare the results with observed results. This was used to identify opportunity segments which could then be targeted using customized marketing. It also helped Harrah to run marketing experiments in order to fine tune their marketing strategies for target segments based on customer behavior.
Some of the specific initiatives taken to develop customer insights were: 1. Integrated IT network connecting all Harrah properties – this enabled customer level information to be shared in real time across various casinos. This was a key enabler in executing the Total Gold program designed to facilitate and encourage cross-market visitations 2. Triggers – Series of triggers were set in the database and customer’s response to those triggers was analyzed. For example, if a customer who spends $1000/mo did not visit for 3 months, he was sent a personalized mailer for special events 3. Opportunity based customer segmentation – Harrah could predict customer’s potential playing behavior and compare results with observed data. The discrepancy could then be used to identify opportunity segments which could then be targeted using customized offerings. 4. Feedback based marketing experiments: With the ability to collect and analyze customer playing behavior, Harrah could run feedback based marketing experiments, the results of which were used to discover right marketing instruments for right behavior modification for right customer. It helped eradicate offerings which were least valued by customer.
Harrah’s business customer loyalty program focused on three major initiatives: acquisition of new customers, enhancement of the business from existing customers, and retention of potentially defecting customers. Analyze Exhibits 2b-2e to determine if their business intelligence strategy was successful.
1) New Business Program Analysis: This program sought to convert new customers of Harrah’s into loyal customers. These were all those who had come into the company purview as soon as they used the total card at any of Harrah’s properties. From exhibit 2b: We can see a clear positive spike in the number of new customers and the average revenue per customer from April to June 99 when CRM initiatives were not undertaken to the July-Jan time frame post implementation. This initiative was clearly successful as: a. The number of new customers using Harrah’s services rose from 31% and 44% in April and May respectively to 50% and 49% in July and August. The average (vintage of customers signing up) increased from 39.33% to 42.42% showing clear benefit of the CRM program. b. The incremental revenues soared from 98% and 84% respectively for April and May to 163%, 93% and 130% for the next 3 months after CRM implementation,...
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