harrah's entertainment

CRM STRATEGY

SUBMITTED BY :

PANKAJ GOYAL

MUNISH KUMAR

ABHISHEK SASAN

ABSTRACT

HARRAH’S ENTERTAINMENT CASE IS ABOUT

Introduction

Why crm

CRM Initiatives

Benefits

Road Ahead

Conclusion

AGENDA OF THE CASE

HARRAH ‘S ENTERTAINMENT

COME OUT AND PLAY

Launched by Bill Harrah in 1937 in

Reno, Nevada

Harrah’s Entertainment

Inc., an entertainment company had

business interest in casinos, food,

beverages & hotel rooms

Harrah’s Entertainment—data warehousing

supported a successful tip to a

CRM oriented corporate

strategy. Winner of the 2000 TDWI

Leadership Award

Operates 21 casino across the

country.

COMPANY OVERVIEW

4 million sq feet of casino space

40,000 hotel rooms

40 million total reward points

100000 employees

COMPANY OVERVIEW

World’s largest provider of branded casino entertainment Owns, operates and manages 50 casinos under brand such as:-

Belly’sCaesar’sHarrah’sHorseshoeRio

Main operations are :-CasinoHotelsDocksideRiverboat casinos

Competitors are ( MGM Mirage , Boyd gaming corporation, Las Vegas Sands Corporation)

COMPANY OVERVIEW

The further we get ahead and the more test we run, the more we learn. The more we understand our customers, the more substantial the switching cost that we put in place and the farther ahead we are of a competitor’s efforts. That is why we are running as fast as we can.

-Gary Loveman, CEO, Harrah Inc.

WHY CRM ?

Change in gaming laws , started rivalry ,instead of opening lavish properties, Harrah initiated CRM.

Leveraging IT. Harrah’s decided to compete using a brand strategy supported by information technology.

Needed to know their customers exceptionally well.

The heart of Harrah’s CRM was customer loyalty program called total reward.

A happy customer will increase spending by 24% year.

An unhappy customer decreases spending by 10% .

CRM INITIATIVES

Customer loyalty program

Decision science based tools

Hotel revenue management

Personal contact management

CUSTOMER LOYALTY PROGRAM

Total Gold program customers were given electronic card.

The customer information collected using this card is stored in central repository.

This information also used to reward customers.

Some weaknesses in Total gold program that are:--There was nothing different about Harrah’s

rewards as compared to competitors.-No consistency in rewards earned by customers.-Earned different rewards at different properties.

CUSTOMER LOYALTY PROGRAM

Different approach i.e. tiered approach where customers were divided into tiers:

-Gold-Platinum-Diamond

-Another objective of Total reward program was cross-market.

HARRAH’S DATA ANALYSIS

1997 was loyalty program was initiated.

Data is gathered at all points of scale.

1998 they started mining and analyzing the data :

A Harrah’s customer only spent 36% of gaming dollars with them. 26% of customers produced 82% of revenue. “Best ” customers were not the high rollers They are slot playing middle aged folks , retired teachers , bankers and doctors

with time and discretionary income. They often did not stay at the hotel , but visited in the evening to game. The reason they visited was the anticipation and excitement

DECISION SCIENCE TOOLS

Harrah’s used COGNOS to access the data warehouse and run predefined report and execute queries.

A tool SAS used by Harrah’s carrying out segmentation.

Primary purpose was to estimate customers worth over period of time.

Determine customers preference.

Predict the reward and services for the customers.

Customize offering to it’s customers.

Prospect

Non –loyal

Loyal

Attritor

DECISION SCIENCE TOOLS

HOTEL REVENUE MANAGEMENT

Offering customer rooms at attractive tariffs.

The strategy was used for optimizing the sum of gaming and room revenues.

System made use of current and historical demand in order to come out with demand forecast.

PERSONAL CONTACT MANAGEMENT

25% revenue came from just 5% of it’s customer base.

Harrah called this segment as ‘VIP Customer ’ and this customers were assigned personal hosts.

A player contact system (PCS) was implemented to provide information about customer to host.

HARRAH’S CASINOS AND TOTAL REWARDS

CUSTOMISED WEB PORTAL

IT ROLE IN IMPLEMENTING CRM

WI Net : CREATING A SINGLE CUSTOMER VIEW

Collect customer data from various source systems.Integrate the data around the customer.

Identify market segments and customer profilesCreate appealing offers for customers to visit Harrah’s

casinos, and make the data available for operational and other analytical purposes.

CUSTOMER VIEW OF TOTAL GOLD PROGRAM

Inbound Touchpoints

Web

CallCenter

Store

DirectMail

Email

Telemar- keting

ATM

MobileDevice

Outbound Touchpoints

OperationalData Store

Extract, Transform,Load Processes

Implement Plans

Analytical Tools

Analytical Applications

INTERACT

DATACAPTURE

ANALYZE

PLAN

Data Warehouse

Ad HocQuery

Report

OLAP

DataMining

CampaignMgmt

ChurnAnalysis

PropensityScoring

CustomerProfitability

Analysis

Analytical CRM Operational CRM

EXECUTE

CLOSED LOOP MARKETING

CUSTOMER RELATIONSHIP CYCLE

BENEFITS

From 2000 to 2002, the customer gaming budget increased from 36% to 43%

13% profit hike after the implementation of the CRM strategy

Increased in the Loyalty card enrolments from 12 million to 26 million

Store growth sales increased by 14%

Cross market revenue also increases from 13% to 22% in the year 1999

Revenue generation of US$4,48.3 mn compared to US$2,977. mn

A brand identity for Harrah’s casinos

An increase in customer retention worth several million dollars

A 72% increase in the number of customers who play at more than one

Harrah’s property, increasing profitability by more than $50 million

62% internal rate of return on the information technology investments.

CURRENT SCENARIO

2008, Harrah’s entertainment was bought by private equity firms Apollo Management and Texas Pacific Group

Deal size $30.7 billion

Including $12.4 billion debt and $1 billion transaction cost

RECENT DEVELOPMENT

CONCLUSION

The integration power of Information Technology and CRM gives a better a dominant competitive advantage to the Harrah’s

Gary W. Loveman refers to their success as “the triumph of software over hardware in gaming”

An increase in retention of just 1 percent is worth $ 2 million in net profit annually. So far, Harrah's is enjoying an increase in retention of a couple of percentage points, thanks in large part to its data warehouse.

QUESTION