1.

Please evaluate the effectiveness of Date Base Marketing programs Harrahs Customer Relationship Management is composed of two elements: Data Base Management and Total Gold Program. Data Base Management created mathematical models to predict each customers worth based on type, frequency, and amount of play.

The Data Base Marketing program enabled Harrahs to conduct experiments on which incentive programs were effective in increasing returns from customers. Harrahs also uses its database to decide when to pull back from a customer relationship Now that Harrahs is able to exactly predict each individuals worth to the company, it is estimated that they will realize more than $ 20 million in annual savings through the respective increases their marketing effectiveness. (Klugsberger, 2005)

2. Why is it important to use the customer worth in the DBM efforts rather than the observed level of play? Customer worth, or theoretical win, is the theoretical amount that the casino expects to win from that particular customers play. Observed level of play does not account for the money that Harrahs may be losing to competitors due to customers playing at other casinos. There are differences between the observed patterns of play and the predicted patterns from DBM and this information can be used to identify opportunities with customers. Customers that are identified to have lower observed play than predicted are targeted for direct marketing efforts. Customized incentives can therefore be provided to customers based on their future worth rather than on their past behavior.

3. How does Harrahs integrate the various elements of its marketing strategy to deliver more than the results of Data Base marketing? Harrahs has integrated the various elements of its marketing strategy to create programs that target three key customer phases: new business, loyalty, and retention.

The New Business Program was created to convert new Total Gold members into loyal Harrahs customers. DBM is used to predict customer worth and to efficiently and effectively deliver incentives to those high worth or theoretically high worth customers. The loyalty program was created to increase the frequency that loyal customers visited the casino by offering incentives and to increase spending per visit spending by getting customers to make Harrahs their first stop. The retention program was created to entice customers who had reduced their visits to return to the casino. DBM is used to identify those customers who attendance falls short of expectations based on historical patterns. Finally, the total rewards program was created to increase cross market visits by enabling customers to use their rewards at all Harrahs properties in the county.

4. Can Harrahs strategy be replicated? Harrahs protects its innovative customer tracking process and has one seven patents for various parts of their customer tracking systems. (Klugsberger, 2005) Harrahs uses its Data Base management and customer loyalty programs to encourage people to play at its various locations. This would not be a successful strategy for its single location competitors such as Foxwoods Resort Casino. This would not likely be a successful system for competitors such as Mirage who maintain their competitive advantage by being unique destination locations.

Need to read: http://www.eweek.com/c/a/Enterprise-Applications/CRM-Strategy-Make-EveryCustomer-More-Profitable/

Works Cited
Klugsberger, P. (2005). What made Harrahs an Innovation Leader? Strategy Implementation.