Harrah S Sec G Group 11

Topics: Marketing, Customer relationship management, Total Rewards Pages: 5 (2081 words) Published: December 4, 2014
Submitted By: Group 11
Ankit Chopra| Preeti Agarwal| Debsoumo Das| Amita Sureka
1. Discuss the factors that drove the customer relationship strategy at Harrah’s. Harrah’s customer relationship management system has two main objectives: 1. Motivate customers so that they participate more using Total gold program 2. Using data from above & implementing individual marketing strategies for their customers using database marketing.

The key factors which drove Harrah’s to adopt the above strategy are as follows: Marketing done on
property basis( no
integration of
customer data) i.r
business units run in
silos

Revenues/total
spend of customers
was low

Strong
competition(leading
to high attrition) and
limited space for
innovation

Low brand
loyality

Valuation of
customers on
observed play led to
loss of potential
customers

On ground service
was notupto the mark













Initially marketing was done on property basis i.e. different approach was followed for Harrah’s casino in different states. This led to casino working in silo and there was no integration of data Transaction data was not integrated

Revenues per dollar for Harrah was very low indicating low brand loyalty amongst their customers Customers were rated only on their observed play which led to loss of high worth customers & loss of revenue

Harrah’s was losing customer base to other competitors such as mirage who had core competency in innovation in design of casinos.
80-20 rule applied to Harrah’s customers so it was essential to focus on more revenue generating customers & at the same time attracting new ones
Inefficient promotional strategy – It was found using marketing experiments that less attractive offers were more profitable
To retain customers showing signs of attrition
Efficient investment in customers to generate more revenue of their customers total spending in casinos
Low brand loyalty
Cross market visitation of Harrah’s customers were low leading to loss of revenue of more than $100mn

1

Submitted By: Group 11
Ankit Chopra| Preeti Agarwal| Debsoumo Das| Amita Sureka
2. What are the Key Performance Indicators of the gaming industry? What are the objectives of the various database marketing programs and how are they working? The case identifies the following three metrics (KPIs) for the gaming industry: 1. Repeat customers: This was focused on customers known for at least six months or three trips. The goal here was to continuously extend the relationship.

2. Customer’s retained: This was focused on customers who had broken their historical visitation pattern. The goal was to reinvigorate customers who had demonstrated signs of attrition. 3. New Customer acquisition: The first phase, “new business”, is focused on customers new to the brand or the property. This would encourage customers to take a second and third trip after making an initial visit.

4. Revenue per customer: This metric focusses on the total spending by each customer and the share percentage of a customer’s total spending which has been cornered by Harrah’s. The objective of the database marketing programs was to improve Harrah’s performance on each of the above-mentioned KPIs. Therefore, the new team focussed on development of quantitative models to accurately predict customer worth—the theoretical amount that the company expects to generate from a customer based on his past usage of Harrah’s properties. This was a transformational move for Harrah’s as earlier a historical model of operational CRM that focused on the customer’s past usage patterns was used. The new analytical CRM model was predictive and therefore, radically different from how the company viewed profitable customers. Analytical CRM was implemented through the following programs: New Business Program: The New Business Program was designed to improve the effectiveness at converting new Total Gold members into loyal customers. The program used...
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