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CRM

STRATEGY

SUBMITTED BY :

PANKAJ GOYAL

MUNISH KUMAR

ABHISHEK SASAN


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ABSTRACT

HARRAHS ENTERTAINMENT CASE IS

ABOUT


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Introduction

Why crm

CRM

Initiatives

Benefits

RoadAhead

Conclusion

AGENDA OF THE CASE


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HARRAH S ENTERTAINMENT


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COME OUT AND PLAY


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Launched by BillHarrah in 1937 inReno, Nevada

HarrahsEntertainmentInc., an

entertainmentcompany hadbusiness interest incasinos, food,beverages & hotelrooms

HarrahsEntertainmentdata warehousing

supported asuccessful tip to aCRM orientedcorporate strategy.Winner of the2000 TDWILeadership Award

Operates 21 casinoacross the country.

COMPANY OVERVIEW


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4 million sq feet of casino

space

40,000 hotel

rooms

40 million total reward

points

100000

employees

COMPANY OVERVIEW


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Worlds largest provider of branded casino entertainment

Owns, operates and manages 50 casinos under brand such as:-

Bellys

Caesars

Harrahs

Horseshoe

Rio

Main operations are :-

Casino

Hotels

Dockside

Riverboat casinos

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

Corporation)

COMPANY OVERVIEW


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The further we get ahead and the more test we run, the morewe 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 competitors efforts. That is why we

are running as fast as we can.

-Gary Loveman, CEO, Harrah Inc.


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WHY CRM ?

Change in gaming laws , started rivalry ,instead of opening lavish properties,

Harrah initiated CRM.

Leveraging IT. Harrahs decided to compete using a brand strategy supported

by information technology.

Needed to know their customers exceptionally well.

The heart of Harrahs CRM was customer loyalty program called total

reward.

A happy customer will increase spending by 24% year.

An unhappy customer decreases spending by 10% .


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CRM INITIATIVES

Customer loyalty program

Decision science based tools

Hotel revenue management

Personal contact management


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CUSTOMER LOYALTY PROGRAM

Total Gold program customers were given

electronic card.

The customer information collected using thiscard 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 Harrahsrewards as compared to competitors.

-No consistency in rewards earned by customers.

-Earned different rewards at different properties.


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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.


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HARRAHS 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 Harrahs 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


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DECISION SCIENCE TOOLS

Harrahs used COGNOS to access the data warehouse and run

predefined report and execute queries.

A tool SAS used by Harrahs 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 offerin to its customers.


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Prospect

Non loyal

Loyal

Attritor

DECISION SCIENCE TOOLS


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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.


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PERSONAL CONTACT MANAGEMENT

25% revenue came from just 5% ofits customer base.

Harrah called this segment as VIP Customer and this

customers were assigned personal hosts.

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


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HARRAHS CASINOS AND TOTAL REWARDS


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CUSTOMISED WEB PORTAL


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IT ROLE IN IMPLEMENTING CRM


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WI Net : CREATING A SINGLE CUSTOMERVIEW

Collect customer data from various source systems.

Integrate the data around the customer.

Identify market segments and customer profiles

Create appealing offers for customers to visit Harrahs

casinos, and make the data available for operational and other

analytical purposes.


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CUSTOMER VIEW OF TOTAL GOLD


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CUSTOMER VIEW OF TOTAL GOLDPROGRAM


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CLOSED LOOP MARKETING


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CUSTOMER RELATIONSHIP CYCLE


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BENEFITS

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

13% profit hike after the

implementation of the CRM strategy

Increased in the Loyalty card enrolmentsfrom 12 million to 26 million

Store growth sales increased by 14%

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

Revenue generation of US$4,48.3 mn

compared to US$2,977. mn


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A brand identity forHarrahs casinos

An increase in customer retention worth several million dollars

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

one

Harrahs property, increasing profitability by more than $50 million

62% internal rate of return on the information technology

investments.


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CURRENT SCENARIO
http://www.wikinvest.com/image/Revbdserhet.png


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2008, Harrahs entertainment was

bought by private equity firms ApolloManagement and Texas Pacific Group

Deal size $30.7 billion

Including $12.4 billion debt and $1

billion transaction cost

RECENT DEVELOPMENT


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CONCLUSION

The integration power of Information Technology and CRM gives a

better a dominant competitive advantage to the Harrahs

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.


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QUESTION


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