Harrah'S Crm-Capitalising On Customer Lifetime Value

HARRAH’S CRM-CAPITALISING ON
CUSTOMER LIFETIME VALUE
Presented by ;
SIBASISH PATNAIK (10DR001)

AVISHEK KUMAR (10DR007)
SUVASHIS MAHAPATRA(10DR009)
.
• .
Solve tomorrow's problems today – by
introducing Life Time Value
.
Customer lifetime value - Definition

This is a long-term marketing principle which
looks at the value to the company of a
customer over the whole time that they relate
with the company. This includes knowing that
although a customer may temporarily use
another company's products/services, they can
return.
Calculation in customer retention cases
• Churn rate
• Discount rate
• Retention cost
• Period
One of the ways to calculate CLV
m r
1+I-r
• Where,
• m is the average gross margin
i is the discount rate
r is the customer retention rate
• In using this simplified formula we to pick one average profit
margin value and one average customer retention rate.
• We can calculate m for each segment as
• m = revenue - product or service costs - cost of servicing
(includes acquisition and promotion costs)
Objective
• Company info
• Why CRM?
• CRM strategy
• Analysis
• Threats
Company Information
• In 1937 it was bingo parlour (A game in which

numbered balls are drawn at random and players
cover the corresponding numbers on their cards)
• Harrah’s entertainment Inc. an entertainment
company had business interests in casino, food &
beverage &hotel rooms.(1950 become No. 1 player
in casino business.)
.
• In 1962 began foray into hotel business by opening

a400 rooms hotel.
• Company won the 2000 TDIE (related to casino
award) leadership award based is CRM orientation.
• Operate in13 state with 26 Casinos chain.
Harrah’s Entertainment
• KENO
• SLOT
• PACHINKO
• RANDAM NUMBER GENERATOR
• ROULETTE
• KENO or BINGO
Why CRM in Harrah’s ?
• Change in gaming laws, started rivalry, instead of

opening lavish properties.
• Leveraging IT. Harrah’s decided to compete using
a brand strategy supported by information
technology.
• Need to know their customer expectation well.
• To provide total reward to loyal customer through
loyalty program.
Because……
• A happy customer will increasing spending by

24% / year.
• An unhappy customer decreased sending by 10%.
• Increasing cross-market play from 13% in 1997 to
23% in 2ooo
Technology
• A tool SAS & COGNOS software used by Harrah's

carrying out for decision making.
• Benefit are:-
 Understanding the individual customers
spending habits and personal preferences .
 Products & Services demanded by the
customer.
 Easy and quick sharing of data & information
(winner information network)
Cont…….
Attributes
• Age,
• Distance of travel to casino,
• Game played by the customer
• Times of bets & value of the bets,
• They are segmented as :-
Prospected, Non – loyal, loyal & Attritor.
Harrah’s CRM Strategy
• Customer loyalty program.

• Hotel revenue management.
• Personal contact management.
• Multi-tier reward programme.
Customer loyalty Program
• Total gold program customer were given electronic

card.
• The customer information collated using this
card is stored in central repository.
• This information used to reward customer.
• Different approach i.e. tiered approach where
customer were divided into tiers:
gold, platinum $ diamond .
Cont……
• Some weakness in total gold program that are:-

 There was no difference between the reward
compare to the competitor.
 No consistency in reward earned by the
customer.
Hotel Revenue Management
• Offering customer room at attractive rate.

• The strategy was used for optimizing the sum of
gaming and room revenue.
• System made use of current & historical demand
in order to come out with demand forecast.
Personal contact management
• 25%revenu came from just5% of its customer

base.
• Harrah called this segment as VIP customer and
this customer assigned personal hosts.
• A player contacts system was implemented to
provide information about customer to the host.
• Magnetics card are being provided to identify
individual customer.
Threats
• Internet gaming generates $1 billion in sales

annually ; 4.5 billion from us casino .
• Competitors (too many brand name)

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HARRAH’S CRM-CAPITALISING ON

CUSTOMER LIFETIME VALUE

SIBASISH PATNAIK (10DR001)

• In 1937 it was bingo parlour (A game in which

• In 1962 began foray into hotel business by opening

• Change in gaming laws, started rivalry, instead of

• A happy customer will increasing spending by

• A tool SAS & COGNOS software used by Harrah's

• Customer loyalty program.

• Total gold program customer were given electronic

• Some weakness in total gold program that are:-

• Offering customer room at attractive rate.

• 25%revenu came from just5% of its customer

• Internet gaming generates $1 billion in sales

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