1. Discuss the factors that drove Harrahs customer relationship strategy.

Executive in Harrahs observed the high amount of cross visits that happened in the gambling industry which raised serious questions on customer loyalty and led losses as much as $100 million. Another factor that led Harrahs to rethink its customer relationship strategy was that the competitors were entering into newer markets with flashy properties, which had helped create a new standards and made it difficult for competitors to imitate. In spite of the company having an excellent technology and infrastructure Harrahs did not have an efficient marketing arm to implement their strategies across all their properties in a consistent manner. All the above factors led satre to believe that many of the approaches till date are not effective and have not helped in Harrahs getting new customers .Hence in order to regain its market share and get back its customer loyalty satre had to come up with a marketing strategy that is well tied up with its operations strategy, which meant the usage of a common database, with an aim to be able to apply it across all the branches of Harrahs. Customer Relationship Management (CRM) at Harrah's consisted of 2 elements: Database Marketing (DBM) and Total Gold program. The DBM allowed Harrahs to segment its customers based on their activity levels & used to sell them offers based on analytical inputs, the Total Gold program motivated customers to consolidate their play instead. The data collected through the program allowed Harrahs to execute its direct marketing strategies that had increased its overall marketing efficiency 2. What are the Key Performance Indicators of the gaming industry? What are the objectives of the various database marketing programs and how are they working? The case identifies the following three metrics (KPIs) for the gaming industry: 1. Customer acquisition: This is the first phase where the motive is to get as many new customers as possible and once you get them to visit the casino they are incentivized via offers/schemes to visit the casino for a second or third trip

2. Building customer loyalty: This plan was focused on the customers who have been visiting the casino for at least six months or for considerable period of time. The goal here was to ensure that the service be provided so as to ensure continuity in the visits of these segment of customers. 3. Customer retention: This was focused on customers who had broken their historical visitation pattern. The goal was to get the customers back on board who had demonstrated signs of visiting other casinos. The main objective of the DBM programs were to ensure the improvement in the performance of the above mentioned parameters. In order to achieve this quantitative models were developed so as to understand the behavior pattern of the customers and make logical predictions based on the same. This was seen as an analytical CRM model that was predictive & therefore, completely different from how the company viewed its key customers. Analytical CRM was implemented through the following programs: ->New Business Program: ->Loyalty ProgramFrequency Upside ->Loyalty ProgramBudget Upside ->Retention Program 3. Explain how the concept of customer worth/ customer lifetime value has been applied at Harrahs casino in the Database marketing efforts to gain a competitive edge in the industry w.r.t key performance indicators Making use of customers usage of the various facilities within the casino an analytical method was developed so as to prepare a profile of all the customers and prepare a heuristic that helped predict the customers net worth and expected amount to spend in the casino. Harrahs came up with a new model to improve performance on each of the KPIs: customer acquisition, building loyalty, and customer retention.

Database marketing: In this method customers were identified who could be targeted for the casino offers. This decision is made with the aid of decision science tools that helped in knowing the expected revenue from each customer

Proactive marketing: This is an opportunity-based form of customer segmentation. This process required Harrah's to track customers play preferences, betting patterns, where they liked to eat in the casino and whether they stayed the night, how often they visited, how much and how long they played. This data was then used to prepare a rough profile of the customers which gave Harrahs a better insight into its customers and in turn helped the casino understand its customers better. Customized marketing method was used to achieve specific objectives such as driving incremental frequency, budget, or both.

Marketing Experiments: Harrah's quantitative mathematical approach gave an extremely logical and scientific approach to understand the customers which till date had been based less on logic and more on intuitions. An application in this approach is associated with the eradication of "same day cash" at most Harrahs properties. By using sophisticated decision tools, Harrahs learnt that it could eliminate "same day cash" without adversely affecting the business. Thus, the company was able to eradicate practices that did not contribute to incremental revenues.

4. Does Harrahs have a sustainable competitive advantage? Can other companies duplicate what Harrahs has done? Discuss

Harrahs had realized to make its casino business customer centric. Marketing efforts were essential but customer preference information was the need of the hour. So they invested heavily to come up with a Database Marketing and Total Gold program which has proved to be successful in new business, Loyalty and Retention. Quantitative Models were made to predict the customers future worth instead of the past data. This was Harrahs secret formula and it was rare in the industry. Also Quantitative approach made it possible to track customers over time and predict their preferences. This in turn helps to improve operational effectiveness. Total Gold program was patented which made it difficult for competitors to imitate. There are more than 20 million customer WINet offers annually, and Harrahs tracks each offer to determine when and how offers are redeemed and how marketing activities influence customer behavior at a detailed. With Closed loop marketing Harrah has learnt how to influence positive changes in customer behavior. Harrahs can learn what types of campaigns or treatments provide the highest net value.

Harrahs business strategy is supported by data warehousing and has led to fundamental changes in how the company is run and a leadership position in the gaming industry. Using IT has thus gained a competitive advantage now to make it sustainable it has to continuously innovate to remain ahead. Some future plans of Harrah includes: Introduction of a revenue management system that insures that customers are offered rooms at the right rates and the customers expected theoretical value from gambling at Harrahs casinos. It will extend to eCRM to make information through non Internet channel to be made through internet. Data warehouse will be extended to include enterprise wide information. This will make other companies difficult to duplicate Harrahs business strategy as it is constantly investing to remain ahead in the race.

5 Discuss the privacy, ethical and security issues associated with what Harrahs is doing. Are there concerns and how can Harrahs address them?

Harrahs business model is not purely ethical and in some cases breach a persons privacy and can lead to lapses in security. a. Harrah is using IT to provide information about consumer strategy while gambling. It is using this information to extend better offers to people to draw them towards gambling. It is aimed at enriching the exuberant alive experience of the customers. This can lead to customers getting addicted to gambling and losing their money. Thus it is definitely an ethical violation. 2. Harrahs maintain the entire profile of their customers right from their personal information to their gambling strategies. This information can be sensitive to a customer and may not want to be shared. This sometimes breaches the privacy of its customers. 3. Harrahs maintains the entire playing strategy for its customers, so it can play around in gambling for high profile customers to make him lose every time the customer puts a high bet. So there is a threat to the security of its consumers money while gambling. 4. Harrahs may cartel with credit card companies to share customer spending habits to help credit card companies to provide best offers to customers.