Harrah's database strategy and competitive advantage

Harrah's use of CRM and Analytics to Increase Gambling Revenue

What role has database technology played in Harrah's strategy? How critical is it to the success of the company?

The role of database technology and the use of data warehousing is critical to the success of Harrah's approach to segmenting and data mining specifics regarding its customers. Through the use of Cognos and SAS statistical analysis applications, Harrah's is able to define 90 different segments down to the amount spent during the last gambling trip. Harrah's has taken database technology to a very sophisticated level by creating WINet (Winners Information Network), a comprehensive database and customer management system that allows the entire company to focus on specific customer segments and design incentives and offers to drive up their gambling and spending in Harrah's locations. Underscoring all these strategies is the need for the Harrah's databases to track the result of customer spending in the Total Rewards programs, which has a graduated level of rewards based on customer loyalty. For all these strategies to be supported and for the company to achieve its vision of being centered on the lifetime value of customers, databases are critical for their success.

Are there ethical issues raised by Harrah's use of customer data? Explain your answer.

When any corporation has the wealth of data Harrah's has on the gambling and appending habits of nearly 4 million people, who at last count have entered into the Total Rewards Program, there is a cause for concern. The ethical issues of Harrah's having such detailed information and the ability to quickly analyze it using Cognos and SAS statistical analysis and forecasting software applications also raises the concern of the company being able to selectively sell off segmented and customized data to other companies. Harrah's is adamant that they will not sell off these lists, yet the value of this information is so high it presents a major liability to the company if it is ever stolen. The ethical issue of encouraging gambling through the development of promotions that will resonate with consumers based on their previous purchasing experiences also raises ethical concerns. There is also the ethical concern of knowing what percentage of someone's budget they spend gambling and being able to extrapolate entire financial profiles of customers based on years of data about them. For all these reasons and more, Harrah's has a serious responsibility to keep the data private and highly secure.

What problems can database technology and customer relationship management software solve at Harrah's? What problems can't it address?