Harrahs Places Its CRM Bet

At Harrahs Entertainment Inc.s casino properties, a few lucky gamblers arent the only ones coming up with winning hands. While other casinos on Las Vegas famous strip are luring customers with extravagant rooms and entertainment, Harrahs is placing its bet on CRM (customer relationship management) technologies that allow it to track and analyze the behaviors and preferences of its customers as they rove the casino floor in search of a hot slot machine—or even as they travel from one of the companys 21 clubs to another. So far, the initiative has paid off like a loose slot machine in the form of increased gaming revenues and customer loyalty.

"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," said Tracy Austin, vice president of IT development for Harrahs. "We leverage that to get the customer to come back."

Like many other casino owners, Harrahs has for several years been collecting information about customers gaming preferences by using a frequent-gambler program called Total Rewards. Customers receive encoded ID cards that they can insert into the slot machines theyre playing. Players collect points and rewards for gambling, and Harrahs collects information about gamers preferences.

At the end of 1999, Harrahs took that idea one step further by expanding the Total Rewards program into a full-blown CRM initiative. Harrahs combined information from Total Rewards with information from other sources such as the companys hotel reservation systems to get a more complete view of customers. Marketing managers can analyze that information to design and tweak Harrahs products. And customer service representatives can access the data in real time from their Web browsers to reward valued customers with promotions such as complimentary meals, hotel room upgrades or tickets to events.

Just as important, Harrahs has integrated customer information from all of its properties into the CRM system. So, for example, a customer service agent in New Jersey can pull up information on a visitor who may normally patronize Harrahs Casino in Las Vegas within 20 seconds of scanning the visitors Players Card.

The results have been impressive. In 1999, the companys same-store sales grew 14 percent from 1998 figures. Whats more, Harrahs has noticed increased levels of repeat business, indicating more customer loyalty, Austin said. Harrahs wasnt the only one that hit the jackpot. In all, the Total Rewards program gave out $251 million in cash and comps to Harrahs customers in 1999.

In using CRM tools, the companys strategy is not unique. Increasingly, experts say, even businesses such as retailers and service companies—with large, somewhat anonymous customer bases—are attempting to build customer service and intimacy. And the more information companies have on customer preferences, behavior and site activity, the easier it is to customize benefits that keep customers coming back, said Sheryl Kingstone, an analyst at The Yankee Group Inc., in Boston.

The companys decision to increase the stakes on its Total Rewards program was an outgrowth of Y2K remediation efforts in 1999. The analytical tool that at the time served as the front end to the companys Teradata data warehouse program from NCR Corp. needed to be replaced because it was not Y2K-compliant. Harrahs decided it was a perfect time to implement a CRM strategy aimed at personalizing services for customers.

So Austin and her team began compiling requirements, not just for a new analytical tool but also for a tool that could be the foundation of a CRM initiative. The team decided it needed a tool that would not only allow marketing groups to conduct offline business analysis on the data and target specific customers but could also be used to easily integrate data from Total Rewards with data from existing legacy applications such as the companys hotel reservations database. And they wanted a way to track Harrahs customers at all of its properties in real time.

Austin, with the help of NCRs professional consulting services, decided to deploy the Cognos Impromptu query tool from Cognos Corp., of Burlington, Mass. The application runs on top of the Harrahs data warehouse, which runs on AS/400 systems in Las Vegas and was deployed as a central repository of customer information from all the companys properties.

Marketing managers use the Cognos business intelligence tools to query and access the data warehouse, which is populated with customer information from the companys custom-built legacy systems, which run on Unix hardware.

Marketing managers can also do predictive modeling using data tools from SAS Institute Inc., in Cary, N.C. In addition, Web-based tools from Cognos let customer service representatives access information via Web browsers over the corporate intranet.

Now that its initial CRM efforts have begun to pay off, Harrahs plans to raise its bet. This year, the company will begin to collect customer information from other types of gaming platforms, including video poker, video craps and video blackjack. That should provide a richer set of information that Harrahs can use to understand customer behavior. And that should make gamblers and the house happier, however the dice roll.

"We dont track if youre winning or losing," Austin said. "We track what you spend with us in a retail environment and do some theoretical [work] on that. We want to make sure that were rewarding you for spending time with us."