CRM STRATEGY

SUBMITTED BY : PANKAJ GOYAL MUNISH KUMAR ABHISHEK SASAN

ABSTRACT

HARRAHS ENTERTAINMENT CASE IS ABOUT

AGENDA OF THE CASE

Conclusion

Road Ahead

Benefits
CRM

Initiatives Why crm Introduction

HARRAH S ENTERTAINMENT

COME OUT AND PLAY

COMPANY OVERVIEW

Launched by Bill Harrah in 1937 in Reno, Nevada

Harrahs Entertainment Inc., an entertainment company had business interest in casinos, food, beverages & hotel rooms

Harrahs Entertainment data warehousing supported a successful tip to a CRM oriented corporate strategy. Winner of the 2000 TDWI Leadership Award

Operates 21 casino across the country.

COMPANY OVERVIEW

4 million sq feet of casino space

40,000 hotel rooms

100000 employees

40 million total reward points

COMPANY OVERVIEW

Worlds largest provider of branded casino entertainment Owns, operates and manages 50 casinos under brand such as: Bellys Caesars Harrahs Horseshoe Rio Main operations are : Casino Hotels Dockside Riverboat casinos Competitors are ( MGM Mirage , Boyd gaming corporation, Las Vegas Sands Corporation)

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 competitors efforts. That is why we are running as fast as we can.

-Gary Loveman, CEO, Harrah Inc.

WHY CRM ?
Change in gaming laws , started rivalry ,instead of opening lavish properties, Harrah initiated CRM. Leveraging IT. Harrahs decided to compete using a brand strategy supported by information technology.

Needed to know their customers exceptionally well.

The heart of Harrahs CRM was customer loyalty program called total reward.

A happy customer will increase spending by 24% year.

An unhappy customer decreases spending by 10% .

CRM INITIATIVES

Customer loyalty program

Decision science based tools

Hotel revenue management

Personal contact management

CUSTOMER LOYALTY PROGRAM

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

CUSTOMER LOYALTY PROGRAM

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

-Another objective of Total reward program was cross-market.

HARRAHS DATA ANALYSIS

1997 was loyalty program was initiated. Data is gathered at all points of scale. 1998 they started mining and analyzing the data : A Harrahs customer only spent 36% of gaming dollars with them. 26% of customers produced 82% of revenue. Best customers were not the high rollers They are slot playing middle aged folks , retired teachers , bankers and doctors with time and discretionary income. They often did not stay at the hotel , but visited in the evening to game. The reason they visited was the anticipation and excitement

DECISION SCIENCE TOOLS

Harrahs used COGNOS to access the data warehouse and run predefined report and execute queries. A tool SAS used by Harrahs carrying out segmentation.

Primary purpose was to estimate customers worth over period of time.

Determine customers preference. Predict the reward and services for the customers. Customize offering to its customers.

DECISION SCIENCE TOOLS

Prospect

Attritor

Non loyal

Loyal

HOTEL REVENUE MANAGEMENT

Offering customer rooms at attractive tariffs.

The strategy was used for optimizing the sum of gaming and room revenues. System made use of current and historical demand in order to come out with demand forecast.

PERSONAL CONTACT MANAGEMENT

25% revenue came from just 5% of its customer base.

Harrah called this segment as VIP Customer and this customers were assigned personal hosts. A player contact system (PCS) was implemented to provide information about customer to host.

HARRAHS CASINOS AND TOTAL REWARDS

CUSTOMISED WEB PORTAL

IT ROLE IN IMPLEMENTING CRM

WI Net : CREATING A SINGLE CUSTOMER VIEW

Collect customer data from various source systems. Integrate the data around the customer.

Identify market segments and customer profiles Create appealing offers for customers to visit Harrahs casinos, and make the data available for operational and other analytical purposes.

CUSTOMER VIEW OF TOTAL GOLD PROGRAM

CLOSED LOOP MARKETING

CUSTOMER RELATIONSHIP CYCLE

BENEFITS

From 2000 to 2002, the customer gaming budget increased from 36% to 43% 13% profit hike after the implementation of the CRM strategy Increased in the Loyalty card enrolments from 12 million to 26 million Store growth sales increased by 14% Cross market revenue also increases from 13% to 22% in the year 1999 Revenue generation of US$4,48.3 mn compared to US$2,977. mn

A brand identity for Harrahs casinos

An increase in customer retention worth several million dollars

A 72% increase in the number of customers who play at more than one Harrahs property, increasing profitability by more than $50 million 62% internal rate of return on the information technology investments.

CURRENT SCENARIO

RECENT DEVELOPMENT

2008, Harrahs entertainment was bought by private equity firms Apollo Management and Texas Pacific Group Deal size $30.7 billion Including $12.4 billion debt and $1 billion transaction cost

CONCLUSION

The integration power of Information Technology and CRM gives a better a dominant competitive advantage to the Harrahs Gary W. Loveman refers to their success as the triumph of software over hardware in gaming An increase in retention of just 1 percent is 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.

QUESTION