10
Aug
08

How Harrah’s Entertainment translates customer data points into the big picture.

At Cequity, we have always believed that “earning points” in a loyalty program is a means to an end and not the end itself. Many companies fail to see the data from such programs holistically and tend to treat it too tactically leading to managing the points rather than an effective customer management strategy intent with which they started these programs. One of the few companies that have made this transition happen is Harrah’s Entertainment. Here’s what David Norton, CMO of Harrah’s Entertainment had to say:

Pointillism is a painting style in which the artist dabs small dots of primary colors on the canvas. Viewing the artwork at nose-distance, you see nothing but adjacent points. But step back, and suddenly you see Georges-Pierre Seurat’s A Sunday Afternoon on the Island of La Grande Jatte.

Analysis of customer behavioral and transactional data can similarly suffer from such granular myopia. Individual data points viewed without an overall perspective not only masks the larger view, it also blinds you to opportunity.

When I joined the company in 1998, we designated customers who played $400 in a given visit to one of our casinos as VIPs who received preferential treatment. But a customer who played $402 during one visit, triggering VIP treatment, might play only $398 on a subsequent visit and receive no such treatment. More importantly, customers who played only $50 a day but visited 50 times a year received no differentiated service at all.

As our goal is to see the total picture of a customer’s play with Harrah’s casinos, members earn credits across any one of our 12 casino brands. This feature not only benefits our members; it also allows us to measure their cross-market play. A third of our revenue comes from members playing in a property other than their home property—whether home is Las Vegas, Atlantic City, Reno, New Orleans or Tunica.

Our Total Rewards database also gives us unique insight into our customers’ total relationship with Harrah’s—including their non-gaming spend. Historically, Harrah’s Entertainment earned 80 percent of its revenue from gaming; our initial data analysis revealed that we received less than a third of our customers’ non-gaming budget. Once we acquired the Caesars Entertainment family of properties, however, non-gaming revenue—from hotel stays to fine dining to entertainment to shopping—became a significant portion of our business. Caesars Palace provides a strong gaming revenue stream from a relatively small number of VIP players, but many Caesars customers come to Vegas for non-gaming entertainment. We can now encourage non-gamers to use their Total Rewards card, for stays at Caesars Palace, trips to the spa and on our shows and still receive all the benefits of our loyalty program. Today, $2.1 billion of our revenue comes from non-gaming activity—and we want the total picture of those customer relationships too so we can customize their marketing and service interactions.

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At Cequity, we believe customer intelligence will be the biggest competitive advantage enterprises will have in the next decade or two. Successful enterprises of tomorrow will be the ones who can organize and leverage this information at speed to optimize their marketing performance, increase accountability, improve profit and deliver growth. Cequity insights will bring to you trends and insights in this area and it’s our way of sharing best practices so as to help you accelerate this culture and thinking in your organization.
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