L. Mohan1Outline1.Harrah’s: A CRM Success Story2.Cigna HealthCare: A CRM Failure 3.Learning from Failure: BMC Software Case4.Data : One Big Hurdle5.The Other Hurdle : People Issues6.Build or Buy or Rent?7.What Works? What Does NOT Work?
L. Mohan2Harrah’s Entertainment- How It Outplayed the CompetitionStrategy of Big Casino Operators- “If You Build It, They Will Come!”Created a fantasyland Las Vegas to attract customersInvested heavily in building costly must-see casinos offering a wide range of amenities malls, dazzling shows, etcDesigned to appeal to a broader audience than simply gamblersHarrah’s Strategy was Different- Expand Gaming Business Outside Nevada & Atlantic CityFrom 4 casinos in 2 states to 26 casinos in 13 states by 2003Became the first nationwide casino businessSaw geographic diversification as a means to…… Insulate the company from regional economic vagariesAND… Provide the opportunity to attract new customers to the Harrah’s brand
L. Mohan3Harrah’s Strategy1. Strategic Focus: Casinos-Not Restaurants or Bars or Shows•Belief that competing on the basis of billion-dollar facilities was NOT the most prudent use of capital•Returns on such facilities often weaken when the novelty wanes 2. Build Lasting Relationships with Core Customers – Slot Players – for Sustainable Profit Growth… Get customers to visit Harrah’s regularlyAND… Spend more of their gaming money at Harrah’s –Increase Wallet Share
L. Mohan4Harrah’s Strategy3. IT Investment to Create an Enterprise Data Warehouse AND Analyze the Data for Customer–Tailored Marketing4. Absolute Focus on Customer Service & Customer Satisfaction.Changed Harrah’s from an operations-drivencompany which viewed each casino as a stand-alone businessinto a data-driven marketingcompany that built loyaltyto the Harrah’s brand in ALL properties.
L. Mohan5Harrah’s in 1998 vs. 20021998•Expanded rapidly in the mid 1990s - as states such as Iowa and Illinois legalized gaming to raise tax revenues- But company was losing market share as rivals built newer and more opulent properties in each market.•Revenue: $1B•Stock price: Nose-dived towards $102002•16 straight quarters of same-store revenue growth•Revenue: Over $ 4B•Stock price: Pushing all-time highs at $ 50
L. Mohan6The Bottom-Line•Customer’s Wallet Share: 42% in 2002 Vs. 36% in 1998•Each percentage-point increase in Wallet Share has coincided with an additional $125M in shareholder value.•Once an also-ran chain of casinos, Harrah’s has become the second-largest operator in the U.S., behind MGM Entertainment, with the highest 3-year investment return in the industry•Acquired in Spring 2004 Caesar’s Palace Casinos
L. Mohan7One afternoon, last May at the Rio Resort in Las Vegas….. as I moved from machine to machine, the computers at Harrah’s office in Memphis, Tennessee, were collecting an astonishingly detailed account of each second I spent at the Rio•
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- Fall '13
- Customer relationship management, Harrah