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Harrah’s rather than at another casino. Harrah’s claims it would never push a customer to do more gambling. “It’s all about customers bringing their existing gaming business to us,” says Loveman. He further points out that the purpose is to get to know those who already want to gamble and give them reasons to spend their money at Harrah’s. His explanation is “All we used to know was how much money we made on each machine, but we couldn’t connect what kind of customer used them. Now, I can get on the system and say, ‘Where are all the 60-or-older females from North Carolina playing?’ This is the replacement of intuition and hunch with science.” If customers don’t want their play tracked, they don’t have to use the card.

Sources: Joe Ashbrook Nickell, “Welcome to Harrah’s,” Business 2.0, April 2002; Meridith Levinson, “How It Works,” Darwin Magazine, May 2001; Meridith Levinson, “Harrah’s Knows What You Did Last Night,” Darwin Magazine, May 2001; Meridith Levinson, “Technology’s Potential Dark Side,” Darwin Magazine, May 2001; Anne Chen, “Harrah’s Places Its CRM Bet,” eWEEK.com, April 2, 2001.

Case Study Questions:

  • 1.

    Analyze Harrah’s using the competitive forces and value chain models.

  • 2.

    Describe Harrah’s business model and business strategy.How do they differ from those of other gambling companies?

  • 3.

    What role has database technology played in Harrah’s strategy? How critical is it to the success of the company?

  • 4.

    How did Harrah’s use CRM software and modeling tools to address the company’s problem?

  • 5.

    Are there any ethical problems raised by Harrah’s use of customer data? Explain your answer.

  • 6.

    What problems can database technology and customer relationship management software solve for Harrah’s? What problems can’t they address?

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