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Harrah's entertainment

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Harrah's Entertainment Case Analysis

Harrah's Entertainment Case Analysis

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  • 1. CRM STRATEGY SUBMITTED BY : PANKAJ GOYAL MUNISH KUMAR ABHISHEK SASAN
  • 2. ABSTRACTHARRAH‟S ENTERTAINMENT CASE ISABOUT
  • 3. AGENDA OF THE CASE Conclusion Road Ahead Benefits CRM Initiatives Why crm Introduction
  • 4. HARRAH „S ENTERTAINMENT
  • 5. COME OUT AND PLAY
  • 6. COMPANY OVERVIEWLaunched by Bill Harrah’s Harrah’s Operates 21 casinoHarrah in 1937 in Entertainment Entertainment— across the country.Reno, Nevada Inc., an data warehousing entertainment supported a company had successful tip to a business interest in CRM oriented casinos, food, corporate strategy. beverages & hotel Winner of the rooms 2000 TDWI Leadership Award
  • 7. COMPANY OVERVIEW 40,000 hotel4 million sq feet of casino rooms 100000space employees 40 million total reward points
  • 8. COMPANY OVERVIEW World’s largest provider of branded casino entertainment Owns, operates and manages 50 casinos under brand such as:-  Belly’s  Caesar’s  Harrah’s  Horseshoe  Rio Main operations are :-  Casino  Hotels  Dockside  Riverboat casinos Competitors are ( MGM Mirage , Boyd gaming corporation, Las Vegas Sands Corporation)
  • 9. The further we get ahead and the more test we run, the morewe learn. The more we understand our customers, the moresubstantial the switching cost that we put in place and thefarther ahead we are of a competitor’s efforts. That is why weare running as fast as we can. -Gary Loveman, CEO, Harrah Inc.
  • 10. 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 supportedby information technology. Needed to know their customers exceptionally well. The heart of Harrah‟s CRM was customer loyalty program called totalreward. A happy customer will increase spending by 24% year. An unhappy customer decreases spending by 10% .
  • 11. CRM INITIATIVES Customer loyalty program Decision science based tools Hotel revenue management Personal contact management
  • 12. 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.
  • 13. CUSTOMER LOYALTY PROGRAMDifferent approach i.e. tiered approach where customers weredivided into tiers:-Gold-Platinum-Diamond-Another objective of Total reward program was cross-market.
  • 14. 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
  • 15. DECISION SCIENCE TOOLS Harrah‟s used COGNOS to access the data warehouse and runpredefined report and execute queries. A tool SAS used by Harrah‟s carrying out segmentation. Primary purpose was to estimate customers worth over period oftime. Determine customers preference. Predict the reward and services for the customers. Customize offering to it‟s customers.
  • 16. DECISION SCIENCE TOOLS Prospect Non – Attritor loyal Loyal
  • 17. HOTEL REVENUE MANAGEMENT Offering customer rooms at attractive tariffs. The strategy was used for optimizing the sum of gamingand room revenues. System made use of current and historical demand in orderto come out with demand forecast.
  • 18. PERSONAL CONTACT MANAGEMENT 25% revenue came from just 5% of it‟s customer base. Harrah called this segment as „VIP Customer ‟ and thiscustomers were assigned personal hosts. A player contact system (PCS) was implemented toprovide information about customer to host.
  • 19. HARRAH’S CASINOS AND TOTAL REWARDS
  • 20. CUSTOMISED WEB PORTAL
  • 21. IT ROLE IN IMPLEMENTING CRM
  • 22. 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 Harrah‟scasinos, and make the data available for operational and otheranalytical purposes.
  • 23. CUSTOMER VIEW OF TOTAL GOLD PROGRAM
  • 24. CLOSED LOOP MARKETING
  • 25. CUSTOMER RELATIONSHIP CYCLE
  • 26. BENEFITSFrom 2000 to 2002, the customer gaming budget increased from 36% to 43% 13% profit hike after the implementation of the CRM strategyIncreased in the Loyalty card enrolments from 12 million to 26 millionStore 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
  • 27. 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 thanoneHarrah‟s property, increasing profitability by more than $50 million62% internal rate of return on the information technologyinvestments.
  • 28. CURRENT SCENARIO
  • 29. RECENT DEVELOPMENT2008, Harrah‟s entertainment wasbought by private equity firms ApolloManagement and Texas Pacific GroupDeal size $30.7 billionIncluding $12.4 billion debt and $1billion transaction cost
  • 30. CONCLUSIONThe integration power of Information Technology and CRM gives abetter a dominant competitive advantage to the Harrah‟sGary W. Loveman refers to their success as “the triumph of softwareover hardware in gaming”An increase in retention of just 1 percent is worth $ 2 million in netprofit annually. So far, Harrahs is enjoying an increase in retention of acouple of percentage points, thanks in large part to its data warehouse.
  • 31. QUESTION