This document summarizes key learnings from a case discussion about Harrah's Entertainment Inc. Specifically: 1. Harrah's top management worked to change the company's organizational structure from independent properties to a more centralized federal structure to increase customer loyalty and profits across properties. 2. Harrah's increased customer loyalty by setting targets and rewards for customers to encourage them to spend more time and money at Harrah's properties. 3. They also shifted their focus from observed customer worth to predicted worth, calculating customer potential value over time using demographic and spending data rather than just initial visits.

1. Dear Students,
This document is related to the learnings of the Harrah’s Entertainment Inc. Case (Discussed in
Session 4). We had a very detailed discussion on that case. Based on the inputs of the students and
their continuous involvement in the discussion, we could draw the following points:
1. In Harrah’s Entertainment Inc., top management was interested to understand the factors
behind the company’s success related to increased profits and customer satisfaction.
2. Harrah’s top management worked on changing the organizational structure from feudal
one to federal one. In earlier structure, every property was working independently and
customers of one property were not encouraged to visit the other properties of the Harrah.
In the changed structure, properties started interacting with each other and customers
belonged to Harrah and not to a particular property. This type of change in organizational
structure requires serious effort and continuous motivation of all the stakeholders. As a top
manager, you have to deal with the fact that independence of individual property is
compromised while going from feudal to federal structure.
3. Harrah worked on increasing the loyalty of the customers. They set some target before the
customers and informed them about how to achieve that target. If a customer achieved that
target, he or she was rewarded with some benefits. In that processes the customer remained
associated with the Harrah for some time.
4. They worked on predicted worth rather than previously followed approach of observed
worth. A customer at his or her first visit might not be a profitable customer but over a
period of time, that customer can be a potential profitable customer.
5. They calculated the customer worth (predicted worth) from the customers’ demographic
data and their playing pattern at the casinos.

2. 6. They also predicted the customer frequency along with the predicted customer worth. By
this way, they were able to identify the opportunity segments related to potential customers.
Hope to have similar kind of discussions in the coming sessions as well. Have a great learning!!
Best Regards,
Prof. Manas Tripathi