On January 15, 1998, Harrah’s stock traded at around $ 19.50. On January 15, 2003, it traded as
high as $ 38.49, almost twice the price, at a time when the market value of the industry as a
whole had declined by more than 25%.
The creation of the Harrah’s brand, Total Rewards, and cross marketing have resulted in a 72
percent internal rate of return on investments in information technology.
Harrahs’ hotel occupancy rate exceeds 90 percent versus an industry average of 60 percent—
even in the ultra competitive Las Vegas market, where occupancy hovers around 80 percent
(Harrah’s strategy is to optimise the sum of gaming and room revenues).
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Harrah’s CRM Strategy
Harrahs’ estimates its customers spent about 43 percent of their annual gambling budgets at
Harrahs’ properties in 2002, up from 36 percent when the program began. In addition, Harrahs’
has been able to leverage the Total Rewards program to increase cross-market play—the amount
of gambling revenue generated by customers outside their home markets—by 20 percent since
2001.
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(Though these statistics appear somewhat dated at this time, they do serve to indicate the profits
made by Harrah’s at some point in time after implementing its DST based CRM strategy)
The difference is that most companies put money into the spectacle. Of the newest hotels on the
Strip, Las Vegas Sands’s Venetian Hotel cost $3 billion to build and MGM’s Bellagio came in at
$1.8 billion. Harrah’s, on the other hand, chose to put most of its money into the winner’s
information network (WINet), the industry’s first national customer database.
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Harrah's marketing workbench analyses hundreds of customer attributes to determine likelihood
to visit, predicted spending, opportunities for cross-selling, and much more. This means Harrah's
can target promotions and mailings to individual customer preferences. DST has also enabled
Harrah's to develop a complex and very special model for estimating a customer's lifetime value.
This allows Harrah's to make sure that they treat there best customer very well and ensure that
they keep coming back for entertainment throughout the entire brand of Harrah's locations.
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CRM Strategy: Make Every Customer More Profitable;
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Harrah’s CRM Strategy
References
1.
CRM Strategy: Make Every Customer More Profitable;
2.
CRM at Work: Eight Characteristics of CRM Winners;
3.
Harrah’s N.I.F.T.Y Mobile CRM Initiative;
4.
Harrah's Entertainment - Jackpot! Using IT to Manage Customer Information;
5.
UNLV Gaming Research and Review Journal – Vol 7, Issue 2
6.
Cashing In on Customer Loyalty, By Phil Bligh and Doug Turk, Posted in the June 2004
Issue;
7.
Evening the odds: CRM systems are driving sophisticated loyalty programs at Las Vegas
Casinos -- and not just for the high rollers;
8.
Data mining for hotel firms: use and limitations;
9.
Using Data Mining on the Road to Successful BI;
10. Harrah's hits customer loyalty jackpot;
11. CRM Empowers Harrah’s to Look Backwards and Forwards When Developing
Campaigns - Jeanette Slepian, President, BetterManagement.com;
- Fall '15
- PP
