Harrah's Las Vegas Success: the Place of Customer Relation Strategy, Technology Quality, Data Collection Methods and Competitive Advantage

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Casino gambling hasn’t even been around for more than a century, however the advancements that the gaming industry has made in the past couple of decades alone have been extraordinary. Although it’s hard imagining Las Vegas different from shimmering grandeur that it is now, there used to be only one casino that stood leaps and bounds ahead of its competitors. Harrah’s success can be attributed to their customer relationship strategy, the quality of their technology and data collection system and their competitive advantage.

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Bill Harrah, the founder of Harrah’s came up with the vision that led, - and continues to lead - the company to achieve greatness in the casino entertainment industry. His utter focus for customer satisfaction rooted itself into everything that he and his successors have accomplished. “Harrah’s was currently focused on building loyalty and value with its target customers through a unique combination of great service, excellent products, unsurpassed distribution, operational excellence, and technology leadership” (3, Ahsan). The loyalty that developed in customers was atypical in the gaming industry. There was an extraordinary amount of disloyalty because of traditionally terrible service in the casino industry and management at Harrah’s wanted to change that. With their vision of excellence in essentially all that they do, they created their first rewards program. It was labeled as a “Total Rewards” program and the comprehensiveness and ease associated with it drew customers in from far and wide. The customer loyalty program tracked, retained and rewarded its guests for visiting all Harrah’s and Harrah’s affiliate locations across the nation and also simplified the communication method. The Total Rewards program was the first multi-branded loyalty program of its kind and Harrah’s continued to develop it into a multi-faceted program. The next major evolution to the Total Rewards program came as a result of a customer segmentation shift. With more advanced technology and infrastructure, their new revamped Total Rewards program was better than ever. There were now promotional offers and advertisements that were tailored to each customer based on past purchases, gambling patterns including wins and losses and timing of games, how recent their last visit was, and many other metrics. This eventually evolved into the ability to get real time offers on the Total Rewards cards based on any activity registered at any time. This means that if you were playing poker until 4PM, you can go to cash out on your Total Rewards card and the next time you insert or give your card to anybody else, there could be a complimentary buffet voucher waiting or tickets to see a show that same night based on your preferences and the timing. All of this creates the most seamless experience for the customer as possible, and at a place where everybody, - from the waitresses to the casino managers, - smiles and says hi to you, it also becomes somewhere that you never want to leave. That is the customer relationship strategy that Harrah’s has created.

Harrah’s couldn’t have created any of the seamless customer experience without technology. Akin to Bill Harrah’s original mission, the casino has led in the technology space for the gaming industry. In 1984, Phil Satre became the president and CEO of Harrah’s. He had the same values of customer service as Bill Harrah and he started his progression to technology by sending feedback forms and congratulatory certificates to some slot machine jackpot winners. Through some forms he found out that many customers frequently visited more than one Harrah’s property, which was the opposite ideology of the rest of the casino industry. These findings were the start of the Player Card program which allowed players to insert their card into slot or video poker machines and all information about wins, losses and the amount of times played were recorded in a customer database called the National Customer Database. Points could be accumulated for complements ranging from free meals to free cruise trips. This later evolved into the successful Total Rewards Program, which was easier to use and more integrated. Although a good start, the data collection process was difficult because Harrah’s had to link all properties to enable company-wide information sharing. Many businesses and individuals doubted Harrah’s abilities to create such sophisticated technology, but in 1997, the Winners’ Information Network (WINet) was created. This allowed the company to predict the profitability of a customer and create direct marketing campaigns to target each consumer. WINet became the backbone for Total Rewards and Harrah’s website by connecting and consolidating all customer information all over the nation. The technology was so advanced and capable it could record all details of a customer’s stay, preferences, demographics and essentially every single action in the casino. The hotel reservation system and table games such as blackjack used human data entry to record information, which could be a slight hassle and could lead to human error, but overall Harrah’s was far beyond any competition. All of Harrah’s IT became a solution for a CRM need as many computer systems came together to deliver all of their needs. Typical CRM architecture provides multichannel support, an integration of processing data and integration of modes and although Harrah’s uses several different systems together, they effectively do the same thing as CRM if not more. And as business continued to boom, Harrah’s eventually chose NCR’s Teradata warehouse technology and Cognos’ enterprise analysis tools because they were the most powerful solutions at the time. Harrah’s continuous success allowed them to choose the highest caliber of technology and data collection. This allowed Harrah’s to have an even better understanding of their customers and their activities so that customer rewards could be further personalized. A couple of years later, TIBCO Software Inc. and Teradata announced a partnership, which allowed Harrah’s technology to operate faster and more efficiently. This created a world of possibilities, - to get and use information in real-time. While all of Harrah’s technology was of the highest quality that it could have achieved at each of their respective times, the most impressive aspect of their work is by far the data collection. The sheer amount of data that was collected for all of the millions of clients was amazing, but the ability to use the data effectively was what gave Harrah’s a competitive advantage.

The biggest competitive advantages Harrah’s had were their customer relationship strategy and their tech forward mindset. Their true competitive edge lies in their ability to make something out of the data they have. First of all, the customer relationship strategy is still the backbone of everything the company has done, which provides an amazing experience for every individual that visits any casino or affiliate. This will naturally leave people wanting to come back for more, and they do. The tech forward mindset stretching back from the founder, has really pushed the company and allowed it to reach capacities that it would not have been able to no matter how good the service was. “Harrah’s recognized that if it spent one-tenth the amount invested in marketing and advertising on additional IT initiatives, it would be able to achieve most of the solutions needed to gain this competitive advantage” (5, Ahsan). While most other casinos were building ornate palaces, Harrah’s focused on creating an extraordinary experience with the best IT infrastructure possible. This was incredibly advanced and forward thinking especially for its time. By looking at the technology acceptance model, we can come to the conclusion that the perceived usefulness was an exceptional degree for Harrah’s and perceived ease-of-use may not have been, but they braved it and came up with amazing results. Many others in the same casino entertainment industry may have been faced with the same decision and decided that technology would not enhance job performance an exceptional amount, or that the perceived ease-of-use was actually too difficult to attempt. “Harrah’s owned three patents for its real-time data technology. These patents kept Harrah’s one step ahead of its competition in the areas of recognition and rewards, two key considerations for building loyalty among customers” (4, Ahsan). And recognize and give rewards they did. Lavish rewards such as free airline tickets or free stays at a casino were given randomly and also after an accumulation of points. Amazing service coupled with even better infrastructure made Harrah’s unstoppable. After a while some companies started catching on to the importance of technology and tried to mimic Harrah’s programs. The result was a launch into an active enterprise so that any interaction with a customer will be tracked and used for analysis and marketing interventions. This created a continuation of a seamless experience with targeted marketing. Using observed behavior data and too-good-to-resist promotional tactics to engage new customers, Harrah’s could collect core customer information for virtually anybody that visited. Using Total Rewards centers, hotel front desks, their website and call center, Harrah’s could market to whoever, whenever. There were marketing campaigns for an array of forms, offers, segmentations and the observable results were easily measured. Key performance indicators such as offer acceptance rates and profitability by segment could be easily assessed and tweaked offers for under performing segments could go out and perform better. All of the capabilities of CRM were in Harrah’s IT system and the way that they used it created a sustainable competitive advantage as long as they maintained their customer relationship strategy and focus on technology.

Moving forward, I would suggest that Harrah’s should continue to give great customer service and maintain the technology forward mindset. As technology progresses for the rest of the world, I would try finding ways to stay ahead of the curve whether that be more in depth marketing campaigns, keep their data desirable and to create programs for generations of Harrah’s customers. First of all, there could be more marketing campaigns that could attract under performing segments. Data can be put together in new ways and specific targets could be marketed towards in individual campaigns. Examples could be campaigns for young professionals, old women over the age of 70, or bachelors between the ages of 25-35. Each segment could have tailored promotions and deals to draw people in. This can be done to revitalize relationships with decliners or attract new customers within a limited budget. Secondly, I would suggest keeping data desirable through “STARTS” attributes. Data needs to be sharable, transportable, accurate, relevant, timely and secure. Through time, data can be mismanaged and some value can be lost. Performing an audit and checking that data fits all of these criteria will keep the IT systems fresh and not outdated. Lastly, I would create an extremely special customer experience specifically for the visitors who have been coming for generations. At this point there must be some customers who have had family coming for decades and decades and having something like a special black tie event or customer appreciation deal would make the relationship between the customer and Harrah’s even more unique. Data could be easily tracked and if there are deals that customers can’t resist, there may even be some decliners that end up showing up. Word of mouth about such an amazing customer experience will surely be the product of a campaign like that. Ultimately, Harrah’s success can be attributed to their customer relationship strategy, the quality of their technology and data collection system and their competitive advantage.

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