ADM1370 – Case Study #1, Winter 2012
Harrah's-Gambling Big on Technology
The large investment made by Harrah's Entertainment Inc. in its information technology strategy has been tremendously successful. The results of Harrah's investment include:
10-percent annual increase in customer visits.
33-percent increase in gross market revenue.
Yearly profits of over $239 million.
Highest three-year ROI (return on investment) in the industry.
A network that links over 42,000 gaming machines in 26 casinos across 12 states.
Rated number six of the 100 best places to work in IT for 2003 by ComputerWorld magazine. Recipient of 2000 Leadership in Data Warehousing Award from the Data Warehousing
Institute (TDWI), the premier association for data warehousing.
The casino industry is highly competitive (rivalry among existing competitors is fierce). Bill
Harrah was a man ahead of his time when he opened his first bingo parlor in 1937 with the commitment of getting to know each one of his customers. In 1984, Phil Satre, president and
CEO of Harrah's, continued that commitment to customers. In search of its competitive advantage, Harrah's invested in an enterprisewide technology infrastructure to maintain Bill
Harrah's original conviction: "Serve your customers well and they will be loyal."
Harrah's Commitment to Customers
Harrah's recently implemented its patented Total Hewards' program to help build strong relationships with its customers. The program rewards customers for their loyalty by tracking their gaming habits across its 26 properties and currently maintains information on over 19 million customers, information the company uses to analyze, predict, and maximize each customer's value.
One major reason for the company's success is Harrah's implementation of a service-oriented strategy. Total Rewards allows Harrah's to give every customer the appropriate amount of personal attention, whether it's leaving sweets in the hotel room or offering free meals. Total Rewards works by providing each customer with an account and a corresponding card that the player swipes each time he or she plays a casino game. The program collects information on the amount of time the customers gamble, their total winnings and losses, and their betting strategies. Customers earn points based on the amount of time they spend gambling, which they can then exchange for camps such as free dinners, hotel rooms, tickets to shows, and even cash. Total Rewards helps employees determine which level of service to provide each customer. When a customer makes a reservation at Harrah's, the service representative taking the call can view the customer's detailed information including the customer's loyalty level, games typically played, past winnings and losses, and potential net worth.
If the service representative notices that the customer has a Diamond loyalty level, the
service representative knows that customer should never have to wait in line and always receive free upgrades to the most expensive rooms.
"Almost everything we do in marketing and decision making is influenced by technology," says Gary Loveman, Harrah's chief operating officer. "The prevailing wisdom in this business is that the attractiveness of property drives customers. Our approach is different. We stimulate demand by knowing our customers. For example, if one of our customers always vacations at Harrah's in April, they will receive a promotion in February redeemable for a free weekend in April."
Business Analysis with an Information System
Over 90 million customers visit Harrah's each year, and tracking a customer base larger than the population of Germany is a challenge. To tackle this challenge, in 2008
Harrah's began developing a system called WINet (Winner's Data Network). WINet is an integrated information system that WINet links all Harrah's properties, allowing the company to collect and share customer information on an enterprise wide basis. WINet collects customer
