CRMImplementation612Fall2005 - Outline 1 Harrahs A CRM Success Story 2 Cigna HealthCare A CRM Failure 3 Learning from Failure BMC Software Case 4 Data

CRMImplementation612Fall2005 - Outline 1 Harrahs A CRM...

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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?
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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
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L. Mohan3Harrah’s Strategy1. Strategic Focus: Casinos-Not Restaurants or Bars or ShowsBelief that competing on the basis of billion-dollar facilities was NOT the most prudent use of capitalReturns 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
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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.
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L. Mohan5Harrah’s in 1998 vs. 20021998Expanded 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: $1BStock price: Nose-dived towards $10200216 straight quarters of same-store revenue growthRevenue: Over $ 4BStock price: Pushing all-time highs at $ 50
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L. Mohan6The Bottom-LineCustomer’s Wallet Share: 42% in 2002 Vs. 36% in 1998Each 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 industryAcquired in Spring 2004 Caesar’s Palace Casinos
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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

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