Caso Harras

Harrah’s High Payoff from Customer Information


Introduction

Harrah’s Entertainment, Inc. (or simply Harrah’s) is assuming a leadership role in the gaming industry through a business strategy that focuses on knowing their customers well, giving them great service, and rewarding their loyalty so that they seek out a Harrah’s casino whenever and wherever they play. The execution of thisstrategy has involved creative marketing, innovative uses of information technology, and operational excellence. These component parts first came together in 1997 and have resulted in many benefits, including:
• A doubling in the response rate of offers to customers;
• Consistent guest rewards and recognition across properties;
• A brand identity for Harrah’s casinos;
• An increase incustomer retention worth several million dollars;
• A 72 percent increase in the number of customers who play at more than one Harrah’s property, increasing profitability by more than $50 million; and
• A 62 percent internal rate of return on the information technology investments.

In the following sections, Bill Harrah’s entry into the gaming industry and the customer-oriented values that he heldare discussed. These values continue today and are experienced by customers in the 21 Harrah’s properties across the country. Harrah’s business strategy is described, focusing on the branding of the Harrah’s name and customer relationship management. In order to execute their business strategy, substantial investments in information technology were required in order to integrate data from avariety of sources for use in Harrah’s patron database (an operational data store) and the marketing workbench (a data warehouse). This infrastructure supports operations, offers, Total Rewards (a customer loyalty program), and analytical applications. Special attention is given to the use of IT to support “closed loop marketing.” The impacts of Harrah’s initiatives are discussed, along withfuture directions and the lessons learned.



Company Background


In October 1937, Bill Harrah opened a bingo parlor in Reno, Nevada. He focused on customer comfort, running fair games, and ensuring that customers had a good time. In 1946, Harrah purchased The Mint Club, which took him from the bingo parlor business to full-scale casinos. After renovating the club, it was reopened asHarrah’s Club and began the Harrah’s style of casino entertainment. Harrah’s was the “friendly casino,” where employees knew the customers’ names. In 1955, Harrah opened another renovated casino, this time on the south shores of Lake Tahoe. The gaming clubs at Harrah’s Reno and Lake Tahoe were prosperous throughout the 1960s and 70s as Harrah continued to expand and improve these properties. By 1971,Harrah recognized that the practice of going to local bankers or competing gamblers to borrow money for supporting growth was limiting. He took his company public and became the first purely gaming company to be listed on the New York Stock Exchange.

Bill Harrah’s vision for growth was continued by Philip Satre who led Harrah’s entry into the Atlantic City market and was named president in 1984.In 1993, legislation was passed that allowed gambling on Indian reservations and riverboats. Seizing the opportunity, Harrah’s quickly expanded into these new markets, through the building of new properties and the acquisition of Showboat casinos, the Rio All-Suite Casino, and Players International. Entering the new millennium, Harrah’s had 21 casinos, making it one of the world’s largestgaming companies. Harrah’s has sites in every major U.S. market where gambling is allowed. Figure 1 shows the various casino locations. These casinos and supporting hotels employ over 40,000 people, serve over 19 million customers, have 11,521 hotel rooms, 92 restaurants, 36,635 slot machines, 1,075 table games, and over 1 million square feet of gaming space.


Figure 1: Locations of Harrah’s...