Harrah’s opts for Customer
Intelligence and wins
Faced with decreasing profits, Harrah’s Entertainment, one of the sector’s pioneer companies and today the absolute leader of this industry, decided to abandon its direct marketing policy, the indiscriminate advertising and promotions that their competitors were fiercely carrying out, in order to stop, take its time, and carefully analyze the profile of its current customers, who, like the rest of the competition, it was in danger of losing forever. Harrah’s Entertainment, like its rivals in the sector, was swimming in a sea of data that made it impossible for them to approximate their consumers’ reality. It had created a points program that allowed it to find out certain information about its customers through traditional loyalization techniques, but it was not able to distinguish its most profitable customers; those which deserved the focus of its retention efforts and new product and service offers, in an urgent context of crisis.

“The worldwide leader in the gaming sector accumulates so much information on its customers that it produces, each year, the most complete report on the profile of the American gambler”

The company redoubled its efforts to find out its customers’ behavior in-depth, and soon found the segment that it labeled “moderate gamblers”, which it situated between the majority segment of gamblers that come to bet regularly, but who spend moderate amounts of money on this leisure activity, and the small segment of “big gamblers”.

While for many years now potential market segmentation has been a well-known discipline perfected by Marketing and Sales professionals, the segmentation and in-depth knowledge of customer portfolios is still a pending challenge in too many organizations. Meticulously analyzing who are current customers are is key to retaining and loyalizing the ones that interest us most, applying cross-selling and up-selling strategies – that is, the possibility of offering new products and services to current customers according to an exhaustive knowledge of their needs -, optimizing costs, and preventing abandonment to the competition. Advanced customer management, which Daemon Quest has popularized in Spain using the terms Customer Intelligence or Marketing Intelligence, pursues the intelligent growth of the company at the lowest possible cost, which translates into an irrefutable competitive advantage in the changing environment our companies work in. 

Harrah’s Entertainment discovered that this segment of “moderate gamblers” not only represented the bulk of its income, but also found that, by extrapolating data in order to transfer it to the potential market in the United States and expand its income, this group made up 24% of all gamblers in the United States, and it generated 53% of the total gambling income in the country. In terms of the company’s own internal data, this intermediate segment represented 36% of all the visits to its gaming rooms, and it brought 81% of its income. The company’s Customer Intelligence activities focused on this interesting cluster of gamblers, whose behavior, trajectory, and preferences it studied in detail. The analytical models the company used to examine its priority customers’ needs allowed it to identify value drivers; that is to say, those elements that its customers most valued in all the services and products the company offered. Once these drivers were identified, Harrah’s focused its advanced customer management strategy on strengthening these value factors, with spectacular results: its income increased greatly, customer satisfaction shot up from 22% to 86%, and average spending per customer increased considerably.

The advanced customer management that Harrah’s developed first in its sector now not only places them indisputably at the forefront of the billion-dollar gaming sector in the United States –its income in 2003 increased to 4.3 billion dollars-, but has also made it the world’s principal information source in the gaming sector. Harrah’s distributes its Total Rewards card among all its customers, and thanks to this and other channels, it has been able to accumulate information on 28 million American gamblers. In fact, each year it publishes and distributes “Profile of the

American Gambler”, an informative jewel that minutely details the profile of the average American gambler.