Harrah
Strategic Marketing Management
Case Study: Harrah’s Entertainment Inc 1. What are the objectives of the various Data Base marketing programs and are they working?
From DBM, the company created four programs: (I) New Business Program, designed to improve the effectiveness at converting new customers – this program target customers with high predicted worth, with an offer that was more competitive; (ii) Loyalty Program – Frequency Upside, designed incentive customers to visit Harrah’s property more frequently instead of competitors – this program target customers that were giving Harrah’s only a small share of their wallet; (iii) ) Loyalty Program – Budget Upside, designed incentive customers to visit Harrah’s property first on their trip – this program target customers that were giving Harrah’s only a small share of their wallet on each trip; (iv) Retention Program, designed to reinvigorate customers who had broken their historical visitation pattern or had demonstrated other signs of attrition. These programs were working, but the management realized that the full potential of these ideas depended on the capability of local property managers to adapt the Data Base Marketing efforts and integrate it with their knowledge of the local market. 2. Why is it important to use the “customer worth” in the DBM efforts rather than observed level of play? It’s important to use “the customer future worth” in DBM rather than observed level of play in the past because the ability to predict future play helps this company to build relationships with customers based on what it is predicting to happen in the future and not only past activities. This new system enables the Casino to invest in customers that according to past activities alone were not great customers. Customers that visited the company only once, for example, may not have a great deal of past activities, but because this person’s profile shows that this person can potentially be a great customer in the
Case Study: Harrah’s Entertainment Inc 1. What are the objectives of the various Data Base marketing programs and are they working?
From DBM, the company created four programs: (I) New Business Program, designed to improve the effectiveness at converting new customers – this program target customers with high predicted worth, with an offer that was more competitive; (ii) Loyalty Program – Frequency Upside, designed incentive customers to visit Harrah’s property more frequently instead of competitors – this program target customers that were giving Harrah’s only a small share of their wallet; (iii) ) Loyalty Program – Budget Upside, designed incentive customers to visit Harrah’s property first on their trip – this program target customers that were giving Harrah’s only a small share of their wallet on each trip; (iv) Retention Program, designed to reinvigorate customers who had broken their historical visitation pattern or had demonstrated other signs of attrition. These programs were working, but the management realized that the full potential of these ideas depended on the capability of local property managers to adapt the Data Base Marketing efforts and integrate it with their knowledge of the local market. 2. Why is it important to use the “customer worth” in the DBM efforts rather than observed level of play? It’s important to use “the customer future worth” in DBM rather than observed level of play in the past because the ability to predict future play helps this company to build relationships with customers based on what it is predicting to happen in the future and not only past activities. This new system enables the Casino to invest in customers that according to past activities alone were not great customers. Customers that visited the company only once, for example, may not have a great deal of past activities, but because this person’s profile shows that this person can potentially be a great customer in the