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Companies can save a lot of money if they target customers accurately with relevant offers. Customers who are loyal to the company have greater value for that company and are more likely to respond to marketing offers than the average customer. Harrah’s, the casino chain located in Las Vegas, Atlantic City, Kansas City, and New Orleans, has taken the lead in ways to take care of its loyal customers.

Harrah’s distributes Total Rewards cards to each customer. Each time the customer plays a slot, sits at a table, stays in a hotel room, eats at a restaurant, drinks at a bar, attends a club, or shops at a store in its casinos, the company records it. It doesn’t stop there; the customer’s preferences also are recorded with their account information, such as whether they like golf, Chardonnay, down pillows, or rooms in proximity to the elevator.

Harrah’s collects so much information about its customers that it knows exactly which rewards are relevant, and it also can prioritize its customers. For example, a customer wanted to check in to a Harrah’s hotel, but it was full. The customer chose to play some of the tables and produced his Total Rewards card, which showed him to be valuable somehow. How do we know? Because the hotel soon let him know that a room was available for a special rate, and when he checked out of the hotel two nights later, he discovered the hotel charges were “on the house.”

Harrah’s has reduced its traditional marketing spending by 50 percent in recent years, because it earns greater returns by expending marketing dollars on its loyalty program. Harrah’s sends a good customer 150 pieces of mail each year, though good customers are not limited to gamblers; nongamers often spend more than the gamblers by visiting the spas, restaurants, and bars. These customers also can participate in the loyalty program and collect points, which the casino rewards them for with appropriate incentives and perks.

Discussion Questions:

1. What makes Harrah’s customer relationship marketing program so good?

2.How is Harrah’s particularly well positioned to execute such a program?

Michael Bush, “Why Harrah’s Loyalty Effort Is Industry’s Gold Standard,” Adage.com, October 5, 2009.

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