Q.

1 According to the case, the term customer worth has been coined to specifically quantify
the amount a particular customer can give to the casino. The DBM indicates the expected level
of play from the customer given their historical level of plays and hence the opportunities that
Harrahs can generate from them. However, there is a difference between the actual level of
plays and the predicted levels of play. A high worth customer can sometimes be observed to
have lower play levels. This gap can be exploited by Harrahs as they can compute the quantum
of losses they may be incurring due to the customers visiting other/rival casinos. If this
difference in the observed and predicted levels can be incorporated in the DBM, this will
present a unique opportunity for Harrahs to tap in customers who have been neglected by
them and perhaps their rivals till date.
In this instance, marketing campaigns can be tailored to customers with high customer worth
but low play levels. The play incentives can be designed taking into account the customer worth
thereby boosting revenues. This custom made targeting of potential customers segmented on
their worth can help them identify customers with whom they have brighter opportunities and
suitably target/market lower worth customers. This would undoubtedly result in a much better
prediction from the DBM as this would takes into account the future worth of the customer
rather than the historically observed play levels of the customers. Also, from the insights that
can be gleaned from the pilot studies, it seems that customers are responding well to this
segmentation. Hence to better the efforts of the DBM, including customer worth in the system
is a move that will be beneficial to Harrahs in the long term.
Q.2 Harrahs customer- centric marketing strategy stresses on three main aspects: developing
new business, retaining customers and loyalty. The company made use of the output of DBM
to rollout three important programs: the new business program, the customer retention
program and the loyalty program. The new business program was focussed on increasing the
conversion efficiency of fresh Total Gold members into customers who were loyal, i.e.
estimating customer worth and thereby making better investments.
The primary objective of the loyalty program was to strengthen Hannahs long term
relationship with customers. Customers who were not strangers (known for at least three trips
or 6 months) were intensely targeted. Rewards were then offered to the customers to step

into their casinos which encouraged switching behaviour. Exhibit 2c also shows how Harrahs
was able to become the first stop choice for many visitors.
The aim of the retention program was to recover the revenue from customers who were
considered lost by the management. To achieve this, it needed to examine the decreasing
support of select customers and then had mailed them offers to rejuvenate their relationships.
Another noteworthy effort was that returning customers were given a place in the loyalty
marketing program instead and were hence managed accordingly.
These three programs along with the Total Rewards program played a vital part in catering to
the customers needs and hence satisfying their marketing objective.