Harrah's Case

There were a number of objectives for the various database marketing programs. First, database marketing was used in proactive marketing. In this case, database marketing was used to track gamblers betting patterns, play preference, and where they liked to eat in the casino. As a result, Harrah’s would be able to predict a customer’s potential gambling revenue based on their historical patterns. Examining Exhibit 2e, we can see that the theoretical winnings are very similar to that of observed winnings. For August 99, we can see that there is a variance of 245,000. Therefore, proactive marketing was a successful venture for Harrah’s.

Secondly, Harrah’s also implemented the new business program, which was designed to improve the effectiveness of converting total Gold members into loyal customers. More specifically, this predicted customer worth to make more effective investment decisions at the customer level, resulting in a more profitable business program. This program was successful indicated by the increasing trend of new customers as well as those who signed up after a few months. For example, in Exhibit 2b in April 99, we see that we have an increasing trends of revenue of 34% in the 1st month to 33% in the 2nd month. This means that Harrah’s new business program was successful.

Harrah’s also had a loyalty program, which was designed to identify customers who were only giving Harrah’s a small share of their total spending in a given market. The program would then develop incentives to get these customers to come to Harrah’s both more frequently and spend more money. This program was successful because in Exhibit C, we see that the average number of hours per das increases from approximately 3.4 to 4.0 with a number of trips increasing from 20 in Jan 99 to 153 in July 99. With respect to spending (Exhibit D), we see that profitability increases dramatically from 13,544 before the loyalty program to 18,710 in August of 99. Therefore, both of these...