had shown a profit increase of $125 million. Since then, by carefully analyzing its customer data, Harrah’s has learned that 80 percent of its casino revenues comes from customers who only spend between $100 and $500 per visit. The data showed that many Harrah’s customers are relatively local and can come more often without expensive plane fares.
The centerpiece of the Harrah’s strategy is its Total Rewards program. When gamblers arrive at a Harrah’s hotel or casino, they are asked to apply for a Total Rewards card, although its use is voluntary. Total Rewards applicants must provide information on their gender, age, home location, and the games they like to play. If gamblers choose to insert their card into the slot machine they are playing (or other machines such as poker), the machine will record on the card the amount of money put into the machine, the total number of bets the customer placed, the average size of the bet, and the total amount of money deposited (“coin-in”). Gamblers are rewarded points based on the amount of time a customer spends gambling. Points are not given based on winning or losing or the amount of money deposited in the machine. The points are saved on each customer’s record, and the gamblers can exchange their points for rewards or cash. Each time a Total Rewards customer returns to a Harrah’s hotel or casino, his or her record will be updated.
These data are stored in a data warehouse. Harrah’s combines its gambling transaction data with data from other sources such as its hotel reservation system. The company then analyzes these data using customer relationship management (CRM) software, which views customers as long-term assets. A CRM system coordinates all business processes for dealing with customers, which in Harrah’s case includes both gambling and hotel customers. The company uses Cognos Impromptu, a CRM query tool from the Cognos Corp. of Burlington, Massachusetts, running over its data warehouse. For marketing managers to analyze the data, the company uses modeling tools from SAS Institute Inc., located in Cary, N.C. The overall system Harrah’s developed has been named WINet (Winner’s Information Network).
Using these tools, Harrah’s marketing department builds a detailed gambling profile on each customer. It then will create a personalized marketing program, including a plan to entice the gambler back. “We wanted to track what our customers are spending with us in a retail environment so that we can reward loyal ones with complimentary perks such as hotel discounts,” explains Tracy Austin, Harrah’s vice president of IT development. Loveman points out that “Age and distance from the casino are critical predictors of frequency (of visits to the nearest Harrah’s casino), coupled with the kind of game you play and how many coins you play per game.” Thus, using this information, the computer estimates how much money the company can earn from the individual person over time, viewing the cost of this information and the rewards from Total Rewards as an investment.
Harrah’s has established 90 targeted demographic segments to identify the customer’s value to the company. According to its profile studies, the “perfect” player is a 62-year-old woman who lives within 30 minutes of a casino and plays the dollar video poker. Harrah’s analysts say such customers have time on their hands, ample disposable cash, and easy access to a casino. The more likely a customer will return often and the more that customer is predicted to spend, the higher the demographic