HARRAH'S CASE STUDY(20 Marks)

Required:

A)Social class help us recognizing the right target market for our brand. Being a service providing company which social class does Harrah's amusement park is tapping? Discuss in detail.

B)As mentioned in the case Harrah's has strong MIS (management information system) and CRM (customer relationship management) process. Keeping it in mind, suggest them to enhance the deficiencies by following the specific steps of consumer decision process.

C)If Harrah's Entertainment have to open their franchise in Pakistan, what consumer behavior techniques you would suggest them to make strong impact while entering into this market? (your subject based opinion is required).

Case Study

Harrah's Entertainment

Hitting the Jackpot

Joseph, a 30-something New Yorker, recently went on a weekend trip to Atlantic City, New Jersey, where he hoped to stay at one of his favorite Harrah's resorts and enjoy some gaming and entertainment. Unfortunately for Joseph, he picked a weekend when all the hotels were booked solid. But after swiping his Harrah's Total Rewards card to play the tables, the pit boss came by and directed him to the front desk. He was told that a room had become available, and he could stay in it for a reduced rate of $100 a night. When he checked out two nights later, Joseph was told that all the room charges were on the house. Was this sudden vacancy a case of lady luck smiling down on an Atlantic City visitor? Or was it a case of a company that knows what managing customer relationships truly means? If you ask any of Harrah's Total Rewards program members, they will tell you without hesitation that it's the latter. "They are very good at upgrading or in some cases finding a room in a full hotel," Joseph reported later. "And I always liked the fact that no matter where I gambled, Atlantic City, Vegas, Kansas City, or New Orleans, or which of their hotels I gambled in, I was always able to use my [Total Rewards card]." Harrah's customers like Joseph aren't the only ones praising its customer-relationship management (CRM) capabilities. In fact, Harrah's program is considered by CRM experts to set the gold standard. With the Total Rewards program at the center of its business and marketing strategies, Harrah's Entertainment has the ability to gather data, convert that data into customer insights, and use those insights to serve up a customer experience like no other.

GATHERING DATA

One thing that makes Total Rewards so effective is that Harrah's has a customer relationship culture that starts at the top with president and CEO Gary Loveman. In 1998, Loveman joined the company and turned its existing loyalty program into Total Rewards. The program worked well from the start. But through smart investments and a continued focus, Harrah's has hit the CRM jackpot.

The mechanics of the program go something like this: Total Rewards members receive points based on the amount they spend at Harrah's facilities. They can then redeem the points for a variety of perks, such as cash, food, merchandise, rooms, and hotel show tickets. The simplicity of Total Rewards gains power in volume and flexibility. Through numerous acquisitions over the past decade, Harrah's has grown to more than 50 properties under several brands across the United States, including Harrah's, Caesars, Bally's, Planet Hollywood, the Flamingo, and Showboat. Total Rewards members swipe their card every time they spend a dime at one of these properties: checking into 1 of 40,000 hotel rooms, playing 1 of 60,000 slot machines, eating at 1 of 390 restaurants, picking up a gift at 1 of 240 retail shops, or playing golf at 1 of its 7 golf courses. Over 80 percent of Harrah's customers40 million in alluse a Total Rewards card. That's roughly one out of six adults in the United States. That's a big pile of data points. Added to this, Harrah's regularly surveys samples of its customers to gain even more details.

CUSTOMER INSIGHTS

Analyzing all this information gives Harrah's detailed insights into its casino operations. For example, "visualization software" can generate a dynamic "heat map" of a casino floor, with machines glowing red when at peak activity and then turning blue and then white as the action moves elsewhere. More importantly, Harrah's uses every customer interaction to learn something new about individualstheir characteristics and behaviors, such as who they are, how often they visit, how long they stay, and how much they gamble and entertain. "We know if you like gold . .

. chardonnay, down pillows; if you like your room close to the elevator, which properties you visit, what games you play, and which offers you redeemed," says David Norton, Harrah's chief marketing officer. From its Total Rewards data, Harrah's has learned that 26 percent of its customers produce 82 percent of revenues. And these best customers aren't the "high-rollers" that

have long been focus of the industry. Rather, they are ordinary folks from all walks of life middle-aged and retired teachers, assembly line workers, and even bankers and doctors who have discretionary income and time. Harrah's "low-roller" strategy is based on the discovery that these customers might just visit casinos for an evening rather than staying overnight at the hotel. And they are more likely to play the slots than the tables. What motivates them? It's mostly the intense anticipation and excitement of gambling itself. Kris Hart, vice president of brand management for Harrah's, reports on a survey of 14,000 Total Rewards members. We did a lot of psychographic segmentinglooking at what were the drivers of people's behavior. Were they coming because of the location? Were they coming because there were incented to do so with a piece of direct mail? Were they coming because they have an affinity for a loyalty program? And that allowed us to look at segments that clumped around certain drivers . . . and it enabled us to construct our brands and messaging . . . in a way that would capitalize on those drivers.

CUSTOMER EXPERIENCE

Using such insights, Harrah's focuses its marketing and service development strategies on the needs of its best customers. For example, the company's advertising reflects the feeling of exuberance that target customers seek. Harrah's sends out over 250 million pieces of direct mail and almost 100 million e-mails to its members every year. A good customer can receive as many as 150 pieces of mail in a given year from one or all of its properties. From the customer's perspective, that might sound like a nightmare. But Harrah's has tested customer sentiment on receiving multiple mailings from multiple locations, and they actually like it. The reason is that the information that any given customer receives is relevant to them, not annoying. That's why Harrah's has a higher-than-average direct mail response rate.

Harrah's is certainly concerned about metrics, such as response rates, click-through rates, revenue, and customer profitability. But Harrah's program is one of the best because it places emphasis on knowing how all the outcomes are linked. And because Harrah's CRM culture extends from the IT department to front line employees, the gaming giant has an uncanny ability to translate all its data into an exceptional customer experience. Marilyn Winn, the president of three Las Vegas resorts, lives and breathes Harrah's CRM culture. "My job is to make money for Harrah's Entertainment by creating a great climate for customers and employees." She focuses on what goes

on inside her properties. She spot-checks details on casino floors and in gift shops. She attends weekly employee rallies that are not only a party but also a communications tool. Winn points out how Harrah's motivates its employees to do their best. "Every week, we survey our customers.

Customer service is very specific at Harrah's, systematic." Based on customer service scores, employees have their own system for accumulating points and redeeming them for a wide variety of rewards, from iPads to pool equipment. "Every property has the goal to improve service. This is just one way we do it. We also use mystery shoppers to verify we are getting the service we want and we train our employees to our standards." Harrah's combines its service culture with the brain center of Total Rewards. After a day's gaming, Harrah's knows which customers should be rewarded with free show tickets, dinner vouchers, or room upgrades. In fact, Harrah's processes customer information in real time, from the moment customers swipe their rewards cards, creating the ideal link between data and the customer experience. Harrah's chief information officer calls this "operational CRM." Based on up-to-the-minute customer information, "the hotel clerk can see your history and determine whether you should get a room upgrade, based on booking levels in the hotel at that time and on your past level of play. A person might walk up to you while you're playing and offer you $5 to play more slots, or a free meal, or perhaps wish you a happy birthday." Harrah's is constantly improving its technology so that it can better understand its customers and deliver a more fine-tuned experience. Most recently, Total Rewards gained the ability to track and reward nongaming spending. This is good for people who don't view themselves as big gamblers. "We wanted to make it relevant to them as well because they could spend a couple of hundred dollars on a room, the spa, food, and shows and not be treated any better than a $50-a-day customer," Norton said. This demonstrates the "total" part of Total Rewards. It isn't a program about getting people into casinos. It's a program designed to maximize the customer experience, regardless of what that experience includes.