Harrah's Entertainment, Inc.
Individual Case Assignment: Harrah's Entertainment, Inc.
1. What are the objectives of the various Database marketing (DBM) programs and are they working?
There are two main overall objectives of Harrah’s Database marketing (DBM) programs. First, Harrah’s strived to build, increase and retain customers’ loyalty to their brand, similar to the way people tend to be loyal to their mechanic or hair dresser. The strategy to achieve this goal was to ensure that they crafted and sustained a relationship with their customers and reinforced the emotional tie with personalized attention and fast service. The second objective piggy-backs on the first – that customer loyalty will yield incremental business and increase company revenue. Overall, it is clear that the DBMs collectively achieved their goals as Harrah’s experienced a 100% increase in stock price and revenue growth of 50% in 1999, the year that Harrah’s implemented the DBM strategy. It is also important to analyze the objectives and results of each specific DBM program, including the New Business Program, The Loyalty Program and the Retention Program. The objective of the New Business Program was to convert new Total Gold Program members in to repeat customers, and to make these customers choose Harrah’s over a competing casino. It is clear that this program was successful as the percentage of new customers returning to Harrah’s within 3 months of their first visit increased from 31% in April of 1999 to 50% in January 2000. Furthermore, their predicted customer worth upon returning increased from 98% to 118%. The Loyalty Program was comprised of two strategies: The Frequency Upside and the Budget Upside. Both programs had the objective of making sure that Harrah’s current customers who had taken at least 3 trips or had been customers for at least 6 months would continue to be loyal to the Harrah’s brand. The Frequency Upside program focused on increasing the frequency of visits of these customers.
1. What are the objectives of the various Database marketing (DBM) programs and are they working?
There are two main overall objectives of Harrah’s Database marketing (DBM) programs. First, Harrah’s strived to build, increase and retain customers’ loyalty to their brand, similar to the way people tend to be loyal to their mechanic or hair dresser. The strategy to achieve this goal was to ensure that they crafted and sustained a relationship with their customers and reinforced the emotional tie with personalized attention and fast service. The second objective piggy-backs on the first – that customer loyalty will yield incremental business and increase company revenue. Overall, it is clear that the DBMs collectively achieved their goals as Harrah’s experienced a 100% increase in stock price and revenue growth of 50% in 1999, the year that Harrah’s implemented the DBM strategy. It is also important to analyze the objectives and results of each specific DBM program, including the New Business Program, The Loyalty Program and the Retention Program. The objective of the New Business Program was to convert new Total Gold Program members in to repeat customers, and to make these customers choose Harrah’s over a competing casino. It is clear that this program was successful as the percentage of new customers returning to Harrah’s within 3 months of their first visit increased from 31% in April of 1999 to 50% in January 2000. Furthermore, their predicted customer worth upon returning increased from 98% to 118%. The Loyalty Program was comprised of two strategies: The Frequency Upside and the Budget Upside. Both programs had the objective of making sure that Harrah’s current customers who had taken at least 3 trips or had been customers for at least 6 months would continue to be loyal to the Harrah’s brand. The Frequency Upside program focused on increasing the frequency of visits of these customers.