harrah's entertainment
DESCRIPTION
Harrah's Entertainment Case AnalysisTRANSCRIPT
CRM STRATEGY
SUBMITTED BY :
PANKAJ GOYAL
MUNISH KUMAR
ABHISHEK SASAN
ABSTRACT
HARRAH’S ENTERTAINMENT CASE IS ABOUT
Introduction
Why crm
CRM Initiatives
Benefits
Road Ahead
Conclusion
AGENDA OF THE CASE
HARRAH ‘S ENTERTAINMENT
COME OUT AND PLAY
Launched by Bill Harrah in 1937 in
Reno, Nevada
Harrah’s Entertainment
Inc., an entertainment company had
business interest in casinos, food,
beverages & hotel rooms
Harrah’s 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
40 million total reward points
100000 employees
COMPANY OVERVIEW
World’s largest provider of branded casino entertainment Owns, operates and manages 50 casinos under brand such as:-
Belly’sCaesar’sHarrah’sHorseshoeRio
Main operations are :-CasinoHotelsDocksideRiverboat casinos
Competitors are ( MGM Mirage , Boyd gaming corporation, Las Vegas Sands Corporation)
COMPANY OVERVIEW
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.
-Gary Loveman, CEO, Harrah Inc.
WHY CRM ?
Change in gaming laws , started rivalry ,instead of opening lavish properties, Harrah initiated CRM.
Leveraging IT. Harrah’s decided to compete using a brand strategy supported by information technology.
Needed to know their customers exceptionally well.
The heart of Harrah’s 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 Harrah’s
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.
HARRAH’S 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 Harrah’s 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
Harrah’s used COGNOS to access the data warehouse and run predefined report and execute queries.
A tool SAS used by Harrah’s 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 it’s customers.
Prospect
Non –loyal
Loyal
Attritor
DECISION SCIENCE TOOLS
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 it’s 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.
HARRAH’S 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 profilesCreate appealing offers for customers to visit Harrah’s
casinos, and make the data available for operational and other analytical purposes.
CUSTOMER VIEW OF TOTAL GOLD PROGRAM
Inbound Touchpoints
Web
CallCenter
Store
DirectMail
Telemar- keting
ATM
MobileDevice
Outbound Touchpoints
OperationalData Store
Extract, Transform,Load Processes
Implement Plans
Analytical Tools
Analytical Applications
INTERACT
DATACAPTURE
ANALYZE
PLAN
Data Warehouse
Ad HocQuery
Report
OLAP
DataMining
CampaignMgmt
ChurnAnalysis
PropensityScoring
CustomerProfitability
Analysis
Analytical CRM Operational CRM
EXECUTE
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 Harrah’s casinos
An increase in customer retention worth several million dollars
A 72% increase in the number of customers who play at more than one
Harrah’s property, increasing profitability by more than $50 million
62% internal rate of return on the information technology investments.
CURRENT SCENARIO
2008, Harrah’s 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
RECENT DEVELOPMENT
CONCLUSION
The integration power of Information Technology and CRM gives a better a dominant competitive advantage to the Harrah’s
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