Harrah’s Entertainment Assigned Question

Harrah’s Entertainment

Assigned Question

1. What are the objectives of the various Data Base marketing programs and are they working?

A: The DBM raises an invest strategy according to different kind of customers: establishing relationships with new customers, strengthen relationships with loyal customers and reinvigorate relationships with customers who had shown signs of attrition. This is the direct objective of DBM. And by regaining and consolidate the loyalty of customers, the Harrah’s can achieve some more specific goals such as driving incremental frequency and budget and increasing company revenue, which is the final objective.  

To speak more specifically, there are three sub-programs in DBM program including the New Business Program, The Loyalty Program and the Retention Program, each of which has its own objectives and result evaluated after operating. The New Business Program was designed to convert new Total Gold members into loyal customers, and it turned out more effective and more profitable. The Loyalty Program was comprised of two strategies: The Frequency Upside and the Budget Upside. It was to identify customers who were only giving small share of their spending or budget to Harrah’s. But Harrah’s was less sure of this program’s working. The Retention Program was to reinvigorate customers who had broken their historical visitation pattern or had demonstrated other signs of attrition, and the effect of this program was evident.

1. What is it important to use the “customer worth” in the DBM efforts rather than the observed level of play?

A: The “custom worth” in the DBM efforts was defined as “the theoretical amount the house expects to win, over the long term, from a customer based on his level of play.” The change of strategy makes it possible to analyze the pattern of customers’ behavior and predict a certain customer’s spending, tripping and other behaviors, so that the Harrah’s can judge which kind of program would be suitable to this customer. And the historical way of determine worth was based only on his level of play without further calculation and analysis using data methods. The case of Ms. Maranees was a successful one using the “custom worth” in the DBM efforts.

1. How does Harrah’s integrate the various elements of its marketing strategy to deliver more than the results of Data Base marketing?

A: Apart from DBM, the Total Gold program was also one of the two parts in the Customer Relationship Management, which helped changing the former situation where customers only visit one place of Harrah’s casinos. The Total Gold program was designed to facilitate and encourage the cross-market visitation patterns of Harrah’s customers with the help of an integrated IT network linking all the properties together, and significantly increased the cross-market revenues in the last three years in the 20th century. Besides, the Total Gold cards also used customers’ behavior data to determine what is most important to a specific customer and make a personized strategy of discount or service to keep the customers coming back.

To help building further loyalty of customers, the Total Rewards program was raised. It was designed to encourage customer loyalty or consolidation of play both within a particular trip and across multiple trips or over a course of a year. It also provided additional rewards which could be gained by accumulating and redeeming reward credits.  

1. What is the sustainability of Harrah’s actions and strategy?

A: I think the core of Harrah’s actions and strategy are Brand and Service. And the direct entry point is using different strategies according to different kind of customers to encourage their loyalty to the Harrah’s products all across the country, while other competitors are still focusing on the “must-see” properties such as building theme parks, which seems to be the early strategy of Harrah’s before its reform. In addition, the use of information and data technology helped to make it possible to analyze and predict customers’ behavior, especially in DBM, which was extended to different areas and gained a big success. It distinguished different kinds of customers and could set out strategies accordingly.