Harrah's CRM Strategy
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Case Code : MKTG105
Case Length : 15 Pages
Period : 1998-2005
Pub Date : 2005
Teaching Note :Not Available
Organization : Harrah's Entertainment Incorporated
Industry : Casino/ Entertainment
Countries : US
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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The CRM Program
Harrah's competitors were opening lavish properties that had spas, shopping malls and extravagant hotel rooms, apart from gambling, in order to lure customers. Harrah's, however, decided to pursue a different strategy. The company knew that the majority of its revenues came from its casinos and not from hotels, stores and spas (Refer Table I for business segment revenues)...
Customer Loyalty Programs
The Total Gold program was based on a premise that the best way to improve business performance was not to attract new customers but instead to get the existing customers to spend more. Harrah's realized that capturing a higher percentage of its existing customers' gaming budget would significantly improve the company's profits. This led Harrah's to shift its emphasis towards building long-lasting relationships with its customers. Customers who agreed to join the Total Gold program had to fill a membership form through which Harrah's obtained data such as their name, address and telephone number...
Using Information Technology for CRM
The extensive use of information technology (IT) was central to the success of Harrah's CRM initiatives. The company's ability to develop and nurture relationships with its customers was a result of its ability to capture information and use it to its advantage. With millions of customers visiting its casinos annually, a significant amount of information was generated...
Harrah's CRM initiatives were the first of its kind in the US gaming industry and the benefits reaped by the company were impressive. When the Total Rewards program began in the year 2000, Harrah's was able to capture only 36% of its customers' gaming budget.
By 2002, this figure rose to 43%. The company witnessed a 13% jump in profits in the very first year of the Total Rewards initiative even after spending $251 million as rewards. The loyalty card programs had 12 million enrolments in 1997. By 2003, the enrolments went up to 26 million...
Exhibit I: Hotel Revenue Management System
Exhibit II: WINet Architecture
Exhibit III: Same Stores Sales Growth
Exhibit IV: Harrah's - Five Year Financial Summary