This paper examines Harrah's Entertainment's customer relationship management (CRM) strategy, focusing on its database marketing program and the Total Gold loyalty card initiative. It explains how Harrah's uses predicted customer worth — rather than observed behavior alone — to drive targeted direct marketing across three phases: new business acquisition, loyalty development, and customer retention. The paper evaluates the profitability of specific CRM programs, including the Frequency Upside and Budget Upside loyalty programs, and discusses the ethical considerations surrounding the collection and use of customer data. The analysis illustrates how an integrated, customer-centric CRM strategy can support long-term business sustainability in the gaming and hospitality industry.
The paper demonstrates applied case analysis: it uses academic sources (Buttle, Berndt et al., Trevino and Nelson) to frame and evaluate a real business strategy rather than simply describing it. This technique shows how theory — such as the principle of predicted versus observed customer worth — can be used to assess and justify managerial decisions in practice.
The paper opens by establishing the strategic importance of CRM, then introduces Harrah's two-part program. It proceeds through the individual CRM program components before evaluating their financial outcomes. A three-phase strategic overview follows, leading into a sustainability assessment. The paper closes with an ethical critique of customer data collection and practical mitigation strategies, supported by cited sources throughout. The structure moves from descriptive to evaluative to normative, a strong pattern for applied business analysis.
Customer relationship management (CRM) is perhaps one of the most important activities business managers can engage in. Customers dictate the life cycle and potential demise of a business; therefore, the better the relationship a business maintains with its customers, the more likely the company is to survive in the long term. Harrah's Entertainment implemented a customer relationship management program in order to retain current customers, attract new ones, and maintain lasting relationships with potential return customers.
The CRM program at Harrah's comprises two core elements: database marketing and the Total Gold program. These two elements work together to enable Harrah's to engage in direct marketing strategies that optimize the efficiency and effectiveness of its marketing investment.
The database marketing program concerns the way in which Harrah's invests in its customers. This entails making decisions based on the projected worth of customers rather than relying solely on observed worth. In other words, Harrah's invests in the probability of customers returning by submitting customer profiles to a database and targeting those customers for direct marketing. In this way, a customer-centric approach is applied to direct marketing, where customers' potential behavior dictates the marketing action taken.
To support this approach, several CRM programs were implemented at Harrah's. The objective of the New Business Program, for example, was to improve the process of converting new Total Gold members into loyal Harrah's customers. Through this program, customer worth predictions are used to make more effective decisions regarding marketing to potential customers and to enhance customer loyalty.
The Loyalty Program for the Frequency Upside was designed to target customers estimated to give only a small proportion of their potential time and loyalty to Harrah's. This enabled Harrah's to create programs through which these customers were encouraged to spend more time at Harrah's properties. The Loyalty Program for the Budget Upside was used to identify customers who were allocating only a small portion of their gaming budget to Harrah's while directing the remainder toward competitors.
The purpose of the Retention Program is to target customers who are showing signs of attrition or who have broken their historical visitation patterns. The Total Gold program, meanwhile, was designed to encourage cross-market visitation by Harrah's customers. Customers who visit destination markets are encouraged to visit and play at Harrah's facilities in those locations.
Buttle, F. (2008). Customer relationship management. Butterworth-Heinemann.
Trevino, L. K., & Nelson, K. A. (2010). Managing business ethics. John Wiley and Sons.
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