THE CRM PROGRAM Harrahs competitors 11 were opening lavish properties that had

The crm program harrahs competitors 11 were opening

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THE CRM PROGRAM Harrah’s competitors 11 were opening lavish properties that had spas, shopping malls and extravagant hotel rooms, apart from gambling, in order to lure customers. Harrah’s, however, decided to pursue a different strategy. The company knew that the majority of its revenues came from its casinos and not from hotels, stores and spas (Refer Table I for business segment revenues). Harrah’s decided to make information the key aspect of the company’s marketing efforts. Instead of investing in extravagant properties, Harrah’s began investing in IT that allowed the company to track and analyse every individual customer’s transactions. The database generated out of this effort was then used to design customer programs that would help deliver better customer service, which in turn would aid in keeping customers loyal to Harrah’s casinos. Enhancing customer loyalty and capturing a larger share of customers’ gambling budgets was the main aim of Harrah’s CRM strategy. The CRM program helped Harrah’s understand the potential value of each customer and identify a suitable contact strategy that would bring him/her back to Harrah’s casino more frequently. Harrah’s CRM strategy focused on four key elements. The first and the most important was the Total Gold/Total Rewards customer loyalty program. The second element was decision science based tools. The Hotel Revenue Management initiative constituted the third element; the final element was Personal Contact Management. Table I Revenue from Business Segments (In US$ thousands) Business Segment Revenues (2004) Revenues (2003) Revenues (2002) Casino 4,077,694 3,458,396 3,285,877 Food and Beverage 665,515 596,772 572,775 Rooms 390,077 339,037 317,914 Management Fees 60,651 72,149 66,888 Other 217,195 190,092 148,635 Less: Casino Promotional Allowances (862,806) (707,581) (644,223) Total Revenue 4,548,326 3,948,865 3,747,866 Source: Harrah’s Annual Report, 2004. 11 Harrah’s competitors included players like MGM Mirage, Mandalay Resort group and Caesars Entertainment. 4
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