segment assigned to that customer. The Harrah’s rewards depend upon which segment the customer is in, although just by returning everyone will get some extra treatment. Those who return regularly will receive an enticing promotional mailing a month or two before the customer is expected to return, giving that person something that can be used when the customer arrives. When a repeat customer calls Harrah’s to make a reservation, information from the customer’s record comes up on the reservation computer screen. If the customer has received an offer in the mail, that information will be displayed on the screen. Possible rewards can include cash, complimentary trips, meals, hotel room upgrades, free hotel weekends, welcome gifts such as flowers or candy in the hotel room, tickets to sporting and entertainment events, and possibly even being met at the airport and transported to the hotel.
As Harrah’s expanded, each casino was being operated independently. John Boushy, Harrah’s CIO, said “While management at each of our properties had been thinking, ‘This is my customer,’ customers had been wondering why they didn’t get the same treatment at different Harrah’s properties.” Management decided that all Harrah’s sites had to be on WINet so that when a customer at one casino (or hotel) goes to another Harrah’s, he or she will receive the same treatment. Moreover, that person’s record will show the same segment and the same number of points the individual has collected at the other site or sites. Another problem management faced was that the company also had to change Harrah’s corporate culture, and do so at all 25 locations. Their staff had to switch from a focus only on their own casino and that casino’s profit to a customer-focused corporation regardless of which Harrah’s casino they are working in. One result of this change was that more than half of Harrah’s three Las Vegas casinos’ revenue comes from gamblers already known to the company because they had previously gambled in one or more of its non-Las Vegas casinos.
Harrah’s CRM-based strategy appears to be a great success. The company showed a 13 percent profit gain in the first year it was used, even though it gave out $251 million in Total Rewards that year.Harrah’s same location 1999 sales increased by 14 percent over 1998. Harrah’s has seen a 23 percent gain in customers who gambled in more than one location. Moreover, customers spend more on each visit than in previous years. In 2001, it achieved $3.7 billion in revenue, an 11 percent gain from 2000. Slots and other gaming machines, which are linked to the Total Rewards program, account for 80 percent of Harrah’s operating profit.
Harrah’s insists that it keeps the customer information it collects confidential, that it will never sell its customer list to other organizations, and that it is not out to exploit gamblers. However, opponents of the gambling industry have criticized Harrah’s use of customer data. Richard Thomas Grey, director of the National Coalition Against Legalized Gambling, said that Harrah’s goal is to separate people from their money. The Council on Compulsive Gambling of New Jersey, an advocacy organization, also opposes Harrah’s approach.
Harrah’s CEO Philip G. Satre defends his company by pointing out that the company does not pursue those who are poor. Instead, it reaches out to people who will spend $1,000 to $2,000 per trip gambling. He also claims the Total Rewards program actually gives these people rewards instead of encouraging them to gamble more. Harrah’s just encourages them to do whatever gambling they choose to do at