Marketing: Harrah’s Entertainment
Database Marketing
Database Marketing is an important element for running customer relationships within Harrah’s, a recognized entertainment company owning 21 casinos in 17 cities. Opportunity-based Customer Segmentation is based on betting patterns, play preferences, casino cuisine, time of staying, and frequency of visiting, and length of playing. Using all this information, along with home address and birth date, the company has started developing a complex customer profile. These players were likely to spend about $ 2000 each year. By using this information about customers, Harrah’s anticipated potential client’s playing behavior. Harrah’s observed to anticipated behavior and highlighted opportunity segments premised on a disparity between observed and predicted values. Harrah’s traced the gambling behavior among the customers through control groups in the next months to discover that the most profitable solution was to introduce a less attractive promotion. While using these approaches, the company has eliminated the practice of “same day cash”, a process by means of which casino has had to return a part of customer’s bet in an attempt the customer would play it. With regard to the above, the main purpose of creating Client Database was to understand and explore different behavioral patterns and provide responses to their needs.
The Database Marketing was premised on a number of programs, such as New Business Program, Loyalty Program – Frequency Upside, Loyalty Program – Budget Upside, Retention Program, and Total Rewards Program. To begin with, the main purpose of New Business Program was aimed at advancing the effectiveness of turning the members of new Total Gold into loyal clients. According to the program, the predicted customer worth to make efficient investment approaches at a customer level allows for presenting a specific offer to compete with the current choice that the customer is currently facing. Further, loyalty program has been designed to highlight customers that provide the company with a small portion of total expenditures in a specific market. Harrah’s capabilities allowed property marketers to introduce new programs creating incentives for these clients and making them attend the company’s properties.
The shifts from the level of the play observations to the customer worth system were predetermined by the Harrah’s intention to gain a competitive advantage over other entertainment companies. In this respect, the play level is not a priority when it comes to the reasons why clients visit casinos. The tools used for predicting consumer behavior were essential because Harrah’s was more concerned with developing the client’s profile rather than with a lousy customer premised on short visits. In this respect, once a specific offer could be provided to the customers, it resulted in the development of a new program illustrating the impact of creating new clients’ profile on the company’s profits.
Introducing a customer worth orientation, the company’s managers believe that strong customer relationships management can shape a solid ground of customer knowledge. Harrah’s has had to explore customers’ behaviors and preferences. They should also understand the games their clients gamble, the frequency of gambling, type of games they prefer, and which approaches attract them to visit Harrah’s casinos. Therefore, the information delivered through Client Databases has been a powerful tool for understanding target client’s segments, reacting to customers’ needs and preferences, and increasing the profitability across different casinos.
Apart from internal marketing processes, there are a number of external strategies directed at exploring new markets and sustaining geographic diversity. The latter contributes to diminishing regional risk and ensuring stable income streams. It also seeks to split properties in the leading locations to monitor operating expenditures, enhance revenues and reduce overhead by means of cross-marketing. Such a strategy is inspired by the company’s overview of other practices in the sphere. The strategies used by the Trump’s network require specific attention. To enlarge on this issue, gamers registered and used their cards at table games. Clients’ propensity to wagers has been explained by the gaming behavior at the properties. It is also essential that a gaming activity has a positive influence on the casinos. The information gathered from other practices was also used through sending mail offers to consumers who are expected to create revenues premised on their behaviors and are provided with attentive services. Further, marketing strategies have also been confined to the warehouse and business strategies. Throughout its development, Harrah’s has placed an emphasis on establishing fruitful cooperation with customers. Therefore, combining progress in technological advances with the expansion of gaming markets allows Harrah’s to employ data warehousing and develop customer loyalty. A business strategy is stimulated by data warehousing that leads to tangible shifts in the way the company is controlled, as well as how leaders position themselves in the gaming industry.
In order to sustain Harrah’s marketing strategy and maintain stability within the organization, the company’s managers join international corporations, enter environmental sustainability policies, and encourage innovations. In such a manner, Harrah’s Entertainment seeks to develop a sustainable competitive environment, build the foundation of complementary transitions into growth, and employ additional technologies and science. The future directions involve a revenue management system that guarantees that clients are provided with rooms at appropriate rates. The system will allow the company to improve the return from insufficient room inventory. The room price will highlight the current demand for the services at a specific period of the year, as well as client’s expected values drawn from gambling at Harrah’s properties. Additionally, the company admits that electronic customer relationship management is essential because online communication and virtual space have become the foundation for retaining regular customers and acquiring the new ones. The available information can be found through non-Internet channels that can also open the path for establishing Internet relationship between service providers and their clients. Finally, the entertainment properties also strive to advance its data warehouse to create one channel for supplying enterprise-wide information on product sales, customers, labor employees, and financial results. For example, the company will be able to examine how the slot machine patterns define the most profitable clients, as well as analyze information regarding the location of the particular slot machines.
The sustainable position of the firm is also premised on the manager’s ideological and psychological vision of gambling. Specifically, the importance of creating a gamer’s psychological profile is essential to understand why people are willing to visit casinos. In this respect, the Chief Operating Office of Harrah’s explains that people have always been attracted by the possibility to win because this feeling provides them with a sense of superiority and omnipotence. The studies conducted by Harrah’s provide consumers with a possibility to escape from the daily routine and problems. Gaming customers share the experience of risk-taking as mountain skydivers and climbers, although casinos offer a safe climate for their customers. Therefore, the advertising campaign relies on the “feeling of exuberance”. Overall, Harrah’s gives priority to a range of interventions within an organization to encourage employees to cooperate with the clients. Particularly, such as a new service process design, measurement of executives, reward and recognition are among the major tendencies improving the quality of services.
The database technology innovation and customer relationship management create a powerful tool for Harrah’s to increase its competitiveness in the gaming industry. The database technology enables Harrah’s to sustain sophisticated customer profiles, evaluate its information, identify the most promising customers, improve the quality of customer services, and offer a variety of opportunities. Despite the evident advantages, the database technology fails to address such organizational issues as privacy policy and ethical issues. In particular, the concept of privacy issues is poorly observed although customers are extremely concerned with this problem. Loss of privacy is on the current agenda at Harrah’s because of the gambler exploitation threats.
The idea of creating a powerful information database has been the key strategy implemented by Harrah. However, the company should develop a new robust framework for processing the incoming data. This is of particular concern to the problem of business ethics because the development of sophisticated customer profile can create serious challenges for gaining trust of the clients. Therefore, although the company has provided a close connection between technological innovations and customer relationships, such issues as development of customer profiles should be emphasized because consumers should be aware of the information filled out in the client databases. The consent should be presented prior to creating the protocol within the information system. The prevalence of software programs over manual operation processes is not consistent with customer relationship policies because the visit frequency often fails to identify personal preferences. At the same time, the availability of topographic map is definitely the advantage, but the client’s ignorance is another issue with which Harrah’s managers should be concerned. Therefore, they should provide this information on the company’s website before consumers decide on using their services. Aside from ethical issues related to consumers, the company should address the challenges of paying insufficient attention to their employees. In this respect, Harrah’s should be more careful in creating a deep philosophy for employees, as well as the code of ethics for them while handling the information on clients.
Summary of Exhibits
Exhibits 2a-2f provide a thorough analysis of the results of a range of programs focused on attracting and retaining clients. Specifically, Exhibits 2b highlights New Business Program Analysis that traces a period from April, 1999 to January 2000. The program has been designed for 3 months to trace different percentage of profitability of customers who play within one month. The figure demonstrates that the number of customers form a positive correlation with the customer’s profitability. Further, Exhibit 2c traces the customers’ behavior prior to and after the offer has been delivered in June. Exhibit 2d traces a group of clients with the budget potential. Specifically, the exhibit demonstrates that 578 customers have been chosen to mail offers that were reimbursed in November, December, and January. In January 2000, the customers were estimated in regard to high budget upside. Exhibit 2e defines the visitation patterns for a specific group of customers who attend casinos less frequently. The report also highlights historical behavioral patterns that are expected to be obtained by Harrah’s managers. In order to restore the relationships with these clients, the company sent e-mail offers to nearly 8,000 clients in January, 1999, to receive the corresponding feedback in subsequence months. The cash coupons were sent monthly within the amount that depended on the customer’s profitability. If these clients returned to the casinos, they were engaged into the loyalty program to persuade them of the quality of the services the company provided. Finally, Exhibit 2f tracks the consolidation of Theoretical Win by Customer. The information depicted in the table highlights the influence of Total Reward Program on play consolidation that is based on theoretical worth. A sample of 100 clients allows readers to understand the extent to which clients are attracted by various programs. In order to encourage customers to sign up to the program and play, they held different events for card owners in every casino.
