HARRAH’S ENTERTAINMENT INC.

CASE ANALYSIS

SECTION D | GROUP 6

SANJU S NAIR | 2023PGP554

AYUSHI MEENA | 2020IPM039
CHARANKUMAR R | 2023PGP515
RHITWIK PURSHOTTAM | 2023PGP551
ABHINASH KUMAR BARIK| 2023PGP529
 CASE QS

1. What are the objectives of the various Database marketing programs

and are they working?
2. Why is it important to use the “customer worth” in the DBM efforts
rather than observed level of play?
3. How does Harrah’s integrate the various elements of its marketing
strategy to deliver more than the results of Database marketing?
4. What is the sustainability of the Harrah’s actions and strategy?
5. What types of analytics are applied in this organization?
6. Why was there a need to change the structure of the organization?
Q1. WHAT ARE THE OBJECTIVES OF THE VARIOUS DATABASE MARKETING
PROGRAMS AND ARE THEY WORKING?
Proactive marketing: Opportunity based Customer Segmentation
Prepare “customer profiles” based on data collected from Total Gold Cards
Various Database Marketing Programs and their results are as follows:
New Business Program: It was designed to improve the effectiveness at converting new total Gold
members into loyal customers. The program is working as there is an increase of say 85 customers
returning over a 3-month period after signing up in April 1999. (Exhibit 2 b).
Loyalty program- Frequency upside: It was designed to target customers that were only giving a small
share of total spending to Harrah’s. It offered incentives for these visitors to visit Harrah’s properties more
frequently. The program is working as there was a jump to an average of 150 customers per month after
May (Exhibit 2c).
Loyalty Program-Budget upside: It was designed to target customers that were only giving a small share
of their gaming budget to Harrah’s on each trip. It’s objective was to encourage them to visit Harrah’s first
and thus grab majority of the single casino trips. However, the program was less successful (Exhibit 2d).
Retention Program: It was designed to bring back customers who had deviated from their historical
spending behavior or who had displayed other signs of attrition. The program seemed to be working
even though the cost of offer had gone up from $30 to $40 (Exhibit 2e).
Q2. WHY IS IT IMPORTANT TO USE THE “CUSTOMER WORTH” IN THE DBM
EFFORTS RATHER THAN OBSERVED LEVEL OF PLAY?

Customer worth is the theoretical amount that casino expects to win from
particular customers’ play.
It is important to use customer worth in database marketing program rather than
observed level of play because the ability to predict future play helps Harrah’s to
build relationship with customers based on the prediction and not only based on
the past activities.
Customer worth can be used to identify opportunity of right customer.
Harrah’s can provide customized incentives to customers based on the prediction
rather than just based on their past activity.
Q3. HOW DOES HARRAH’S INTEGRATE THE VARIOUS ELEMENTS OF ITS
MARKETING STRATEGY TO DELIVER MORE THAN THE RESULTS OF DATABASE
MARKETING?
According to research, people go to casinos because it makes them feel “ exuberantly alive”. Therefore,
Harrah's allocated an annual advertising budget ranging from $15 to $20 million to effectively convey a
sense of anticipation and exuberance to a broad target audience.

The Total Gold Programme, which was initiated in the autumn of 1997, aimed to enhance customer
loyalty by reconfiguring the organisational framework in such a way that customers became affiliated
with Harrah's as a whole rather than being exclusively associated with one of its individual casinos.

The Total Reward programme is designed to gather customer behaviour and data in order to
determine the most effective methods for incentivizing customers to increase their spending at the
casino. This data is then utilised to enhance the program's incentives and rewards. Customers have the
opportunity to take in complimentary dinner or upgrade their accommodations. Harrah effectively
fosters a perception among customers that their individual requirements are being adequately
addressed. As a result, this strategy will effectively attract a larger customer base, foster and sustain
positive customer relationships, and ultimately drive increased revenue.
Q4. WHAT IS THE SUSTAINABILITY OF HARRAH’S ACTIONS AND STRATEGIES?
Here are some key sustainable strategies that Harrah's used, as described in the case study:
Total Rewards Loyalty Program: This program offered customers various benefits and rewards,
encouraging repeat visits and increased spending.
Data-Driven Decision-Making: This data-driven approach allowed the company to tailor marketing
efforts, optimize pricing, and improve customer service.
Focus on Customer Service: This customer-centric strategy was instrumental in retaining customers
and encouraging them to visit Harrah's properties repeatedly.
Employee Engagement: Harrah's recognized that satisfied employees were more likely to provide
exceptional service, contributing to customer satisfaction and loyalty.
Operational Efficiency: Harrah's implemented various cost-saving measures and operational
improvements to enhance profitability and sustainability.
Technology and IT Infrastructure: The company invested in advanced technology and IT infrastructure
to support its data analytics and customer relationship management efforts. It's worth noting that
these sustainable strategies, particularly the Total Rewards program and data-driven decision-making,
played a crucial role in Harrah's success in the highly competitive casino and hospitality industry.
Q5. WHAT TYPES OF ANALYTICS ARE APPLIED IN THIS ORGANIZATION?
To enhance Harrah’s investment in its customers, DataBase Marketing (DBM), a decision science tool
helped largely to cover customer segmentation. This indeed paved the way to retrieve specific
information and redesign dynamics to develop a more customer centric approach to direct marketing.
To ensure continuity of the relationship with its customers, Harrah’s loyalty and retention program
made progress with those IT and decision science tools which reinvigorated and demonstrated signs
of attrition.
With the help of New Business Program, a certain theoretical win which resulted from predicting the
customer’s worth to make effective investment decisions at the customer level was achieved so as to
decide efficient reinvestment and/or opportunity segments.
Loyalty Program which tracked and analysed the behaviour of about 950+ customers at the time of
offer release period calculated the profitablity of the program by comparing the theoretical
incremental wins in line with respective Frequency and Budget upsides.
In the later part, with the introduction of earn and redeem rewards program called Total Gold,
customers enrolled can play in this completely integrated information technology network because it
linked all of Harrah’s properties together.
Q6. WHY WAS THERE A NEED TO CHANGE THE STRUCTURE OF THE
ORGANIZATION?
Peter Satre joined Harrah’s in 1980 as the Vice President. His initial strategy for the company
focused on customer satisfaction, which worked for most businesses in the early 1990’s.
Satre wanted to focus and improve the customer service strategy by implementing a
rewards program to better understand customer play at each property.
This plan seemed to work, it allowed Satre to use analytical tools for tracking a customer’s
method of play. Soon after competitors such as MGM Grand and the Mirage were coming
on board theme based environments to draw customers in. In turn, Harrah had to change
its marketing strategy and find ways to not only satisfy the customer but remain
competitive.
To achieve this goal Loveman launched three major initiatives: changing the organization
structure, building the Harrah’s brand, delivery extraordinary service, and exploiting
relationship marketing opportunities (Lal & Corrolo, 2004).
Changing the organization structure meant going from standalone entities to one major
brand