Harrah's Crm

Group-6: Sumit

Saumya Abhishek

Srusti

Peeyush

Agenda of the case

Introduction

Company’s Overview

Company’s Overview

4 million sq feet of casino space

40 , 000 hotel rooms

40 million total

100000 employees

Company’s Overview Ø World ’ s largest provider of branded casino entertainment Ø Owns , operates and manages 50 casinos under brand such as :ü Belly ’ s ü Caesar ’ s ü Harrah ’ s ü Horseshoe ü Rio Ø Main operations are :ü Casino ü Hotels ü Dockside ü Riverboat casinos Ø Competitors are ( MGM Mirage , Boyd gaming corporation , Las Vegas Sands Corporation )  

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Need for CRM Ø Started rivalry, instead of opening lavish properties, Harrah initiated CRM. Ø Understand and appreciate the importance of customer focus and relationship building in a successful CRM program. • Examine the importance of capturing and using customer information in a CRM initiative. • Study and analyze the role played by loyalty programs in developing and nurturing customer relationships. • Understand the role played by IT in a CRM

The further we get ahead and the more test we run, the more we 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 competitor’s efforts. That is why we are running as fast as we can. 

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-Gary Loveman, CEO, Harrah Inc.

CRM Initiatives

1) Customer Loyalty Program

Ø Total Gold program customers were given electronic card. Ø The customer information collected using this card is stored in central repository. Ø This information also used to reward customers. Ø Some weaknesses in Total gold program that are:-There was nothing different about Harrah’s rewards as compared to competitors. -No consistency in rewards earned by customers. -Earned different rewards at different properties.

) Customer Loyalty Program

(cont.)

Ø Different approach i.e. tiered approach where customers were divided into tiers: -Gold -Platinum -Diamond  

-Another objective of Total reward

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2 ) D e cisio n S cie n ce To o ls Ø Harrah’s used COGNOS Impromptu. to access data warehouse & run predefined reports & execute queries. Ø A tool SAS used by Harrah’s carrying out market segmentation. Ø Primary purpose was to Estimate customers' worth over period of time. Ø Determine Customer’s preferences. Ø Predict the services and rewards for customers.

D e cisio n S cie n ce To o ls ØClassification of customers Harrah

done by

3) Hotel Revenue Management System

3) Hotel Revenue Management System (diagram)

4 ) Pe rso n a lC o n ta ct M a n a g e m e n t n 25% revenue came from just 5% of its customer base. n Harrah called this segment as ‘VIP Customer’ and this customers assigned personal hosts. n A player contact system was implemented to provide information about customers to the host.

IT Role in Implementing CRM

INet : Creating a Single Customer View n Collect customer data from various source systems, n Integrate the data around the customer, n Identify market segments and customer profiles, n create appealing offers for customers to visit Harrah’s casinos, and make the data available for operational and other analytical purposes.

ustomer View of Total Gold Program

Closed Loop Marketing

Customer Relationship Cycle

Benefits

B e n e fits

B e n e fits

( cont .)

qA doubling in the response rate of offers to customers

B e n e fits

( cont .)

n A brand identity for Harrah’s casinos n An increase in customer retention worth several million dollars n A 72% increase in the number of customers who play at more than one n Harrah’s property, increasing profitability by more than $50 million n 62% internal rate of return on the information technology investments.

n

Current Scenario

Operating Income

Current Scenario

(cont.)

Revenue Breakdown

Current Scenario

(cont.)

Revenue Breakdown

The Road Ahead

R e ce n t D e ve lo p m e n ts n 2008, Harrah’s entertainment was bought by private equity firms Apollo Management and Texas Pacific Group n Deal size $30.7 billion n Including $12.4 billion debt and $1 billion transaction cost n

E xp e cte d R isk Fa cto r

C o n clu sio n n The integration power of Information Technology and CRM gives a better a dominant competitive advantage to the Harrah’s n Gary W. Loveman refers to their success as "the triumph of software over hardware in gaming“ n An increase in retention of just 1 percent is n 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.

Thank You