The information was also used to reward customers with goodies such as casino

The information was also used to reward customers

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customers with whom long-lasting relations could be established. The information was also used to reward customers with goodies such as casino compliments, discounts on meals, hotel accommodation and invitations to special events. Commenting on the benefits of the program, Satre explained, “The Total Gold player reward and recognition program and our industry leading customer databases give Harrah’s important tools for enhancing relationships with our target customers and making them loyal to Harrah’s where ever they chose to play.” 12 In 1998, Satre hired Gary Loveman (Loveman) as the Chief Operating Officer of Harrah’s. He was an MIT trained economist who had spent four years as Professor at Harvard Business School. Loveman had spent a great deal of time at Harvard studying how businesses can identify their most profitable customers and get them to shop more often. After joining Harrah’s, Loveman immediately identified weaknesses in the Total Gold program. First, there was nothing different about Harrah’s rewards as compared to its competitors. Second, there was no consistency in the rewards earned by the customers. They earned different rewards at different properties. Finally, customers were not given adequate incentives to consolidate their play at Harrah’s and aspire for higher levels of benefits and services. Consolidation of play would enable a customer to combine the reward points earned at various properties. For example, a customer who earned rewards points by playing at a particular property could combine them with rewards points earned at another property. Research conducted by Loveman revealed that the Total Gold customers spent only 36% of their total annual gaming budgets at Harrah’s. Loveman immediately saw an opportunity and decided upon a strategy that would focus on encouraging customers to spend more of their gaming budget at Harrah’s. He decided to customise the relationship Harrah’s had with each of its customers so that the experience a customer had at Harrah’s was of a higher quality in comparison to its competitors. Harrah’s began treating millions of customers differently depending upon their value to the company. This was made the key aspect of the Total Rewards program, which was essentially a successor of the Total Gold program. The focus was now on a customer’s worth over a period of time instead of his/her worth during one visit. The Total Rewards program was a tiered approach to customer loyalty that promoted another important facet of Loveman’s strategy – aspiration. Based on their value, customers were divided into three tiers – Gold, Platinum and Diamond. The customers earned points, called Reward Credits, every time they played and were allotted different tiers depending upon the number of credits they earned. The levels of service offered to customers progressively improved from Gold card holders to Diamond card holders, who were offered the greatest levels of service. Deliberate efforts were made to highlight the difference in service levels to customers holding Gold cards so 12 “Harrah’s Obtains Patent for ’Real Time’ Data on Customer Casino Play Technology,” -, November 06, 1998.
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