In response to your request Strategic IT Consultants would like to review
with you some lessons learned regarding your data warehousing/mining and
business intelligence/analytics achievements over the past couple of
years. As you are well aware Harrah’s
has been very successful in its implementation of a data warehouse, customer
loyalty program (as well as further enhancements to the same), and closed loop
marketing. These combined efforts resulted in a 62%
internal rate of return on investments in information technology, 14% revenue
growth in same store sales and increased frequency of visits by customers.
Along the way, the first lesson to be learned is that sunken pirate ships
and roller coasters may not be the best investment in a casino’s customers. While some other Las Vegas casinos were
spending millions of dollars on frivolous items as previously mentioned, Harrah’s
invested in a data warehouse which was used to support its customer loyalty
program and closed loop marketing efforts.
While extravagant items may bring people to your casino, it may not
bring them there to gamble – as you are aware, visiting a casino and gambling
at a casino are two different things. You
want to attract those customers that are going to keep coming back while
continuing to gamble. It is important to
continue enhancements to the data warehouse while possibly integrating a more
dynamic analytical tool to further evaluate customers and what they would
possibly prefer in the future.
Another lesson to be learned is with regard to marketing. Rather than using “Harrahisms” and extending
offers based on perceived future gaming worth, the closed loop marketing
allowed Harrah’s to learn what types of marketing campaigns provide the highest
net value. Thousands of experiments can
be done with results evaluated and analyzed to provide feedback into which
campaigns provide a higher relative value.
For instance, $60 in chips was better received than $30 in chips, a free
room and steak dinner for two at the Tunica casino. It is important for Harrah’s to continue this
research and find which campaigns are best received in each of it’s
geographies.
Closed loop marketing also assisted with cross-market penetration. Viewing Harrah’s as a whole rather than as
individual properties assisted with better marketing. Harrah’s cross-market play more than doubled from
1997 – 1999, during a time when billions of dollars were being spent on luxury
casinos in Las Vegas.
Harrah’s has learned a lot on its journey about its customers and the casino
industry and should continue to build on this knowledge base. First and foremost, Harrah’s should continue
to invest in its customers, knowing your customers, having the largest client
database in the industry has served you well; continue to enhance the workbench
and data warehouse to capture as much information as possible about customers
in order to enhance marketing in the future.
In that vein, Harrah’s should continue to run experimental marketing
campaigns through the closed loop process.
Cross market play is an important part of revenue and being able to
increase this two-fold in two years is significant. Geographic marketing based on which casinos
customers have visited in the past and trying to gauge where they may be
interested in going in the future could increase this revenue even more.
A new project to look at in the future would be enhancements for mobile
devices and social media/networking.
Possibly create an app that could be used for Android phones, iPhones,
iPads, etc that could replace actually having a loyalty card. The
app could be scanned in at slot machines or tables and customers could keep
track of their loyalty rewards. The internet
is also something that is growing at a staggering pace. It might be worthwhile to link the Rewards
program to customers e-mail addresses.
Please let me know if you would like for my team to come in for a formal
presentation.
We look forward to hearing from you. Thank you for this opportunity.
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