Diamonds in the Data Mine

Introduction
- Increasing customer loyalty with
o Database marketing & decision-science-based analytical tools to widen the gap
between the company and casino operators who base their customer incentives
more on intuition than evidence
o Deliver great service that consumers demand
 Mining customer data
 Running marketing experiments
 Using the results to develop & implement finely marketing & service-
delivery strategies

A Dicey Business
- Geographic diversification (expand to outside of Las Vegas)
- Invested in development of the intellectual and technological capabilities needed to
assemble & analyze data about those customers
- Total Gold but there were 3 problems
o No differentiation
o No uniformity
o Customers not given any incentives to consolidate their gaming with Harrah’s
- A database underlined -> customer preferences & transactional data points

Slicing the Dicing

- Loyalty strategy based on same stores sales growth to get customers visit regularly
o Same-stores sales growth driven by (1) frequency of visits, (2) profitability per
visit, and (3) cross- market play.
- Developed quantitative models that allowed us to predict, based on an individual’s play,
his or her “customer worth” – the theoretical amount we could expect the customer
over the long term
- Categorized the customers: different customers with different services (differentiation
in customer service)

Customer service
- Focus on customer satisfaction
- Employee rewards to customer satisfaction
o Rewards depends on everyone’s performance (would check on each other)

Winning hand
- Competitive advantage: using human capital & technology systems to get to know our
customers better
Harrah’s Entertainment: High Payoff from Customer information

Introduction
- Business strategy focuses on knowing their customers well, giving them exceptional
service, and rewarding their loyalty
- involved creative marketing, innovative uses of information technology, and operational
excellence.
- Integrate data from various sources for use in Harrah’s patron database (an operational
data store) and the marketing workbench (a data warehouse).
o supports operations, marketing, Total Rewards (a customer loyalty program),
and analytical applications.

Business Strategy
- casino managers historically ran their properties as independent fiefdoms and
marketing was done on a property by property basis.
- commonalties in the gambling experience for customers across the various casinos.
- Advertising and offers would promote the Harrah’s brand. There would be recognition
and reward programs for customers who cross-played at more than one of Harrah’s
properties.
- Cost effective route
- Strong customer service relationships -> learn about their customers’ behaviors and
preferences.
o better identify specific target customer segments, respond to customers’
preferences, and maximize profitability across the various casinos.
o to mine the data, run experiments using different marketing interventions (i.e.,
special offers), and learn what best met customers’ needs at the various casinos.
o Winners Information Network (WINet)
 to collect customer data from various source systems, integrate the data
around the customer, identify market segments and customer profiles,
create appealing offers for customers to visit Harrah’s casinos, and make
the data available for operational and other analytical purposes.
o Marketing Workbench (MWB)
 Serves as a data warehouse
 Marketing analysts can analyze hundreds of customer Marketing analysts
can analyze hundreds of customer attributes to determine each
customer’s preferences and predict what future services and rewards
they will want.
 generate the lists (i.e., “list pulls” in Harrah’s terminology) of customers
to send offers to.
 market segmentation analysis and customer scoring
o Total rewards
 As customers use the loyalty cards, detailed information about their
actions is collected to better understand them
Closed-loop marketing (
- to learn how to influence positive changes in customer behavior.
- what types of campaigns or treatments provide the highest net value.
- Figure 1 refer to pg 5)
- Begins with:
o definition of quantifiable marketing objectives
o characteristics of the test procedure
o expected values of the customers selected for the test, which are divided into
experimental and control groups.
- What is already known about their gaming customers -> the customer treatment is
designed to provide the right offer and message at the right time
- The selection of the customers & their treatments are based on Harrah’s Relationship
Lifecycle Model (figure refer to pg 6)
o Customers are offered customized
o incentives designed to establish, strengthen, or reinvigorate the relationship
depending on their positions on the customer lifecycle and the time since their
last visit
o Measurements: response rates, revenues generated by the incentive and
whether the incentive induced a positive behavior change (e.g., increased
frequency of visit, profitability of the visit, or cross-play)

New Directions
- Revenue management system that insures that customers are offered rooms at the
right rates
o The price of the room reflects the current demand for rooms and the customer’s
expected theoretical value at Harrah’s casinos.
- eCRM
o through advanced Internet access, networking their reach to current customers
as well as acquiring new ones
o All information that was previously available through non-Internet channels is
available through the Internet relationship management channel.
- enhanced its data warehouse to provide one source for enterprise-wide information
o The addition of data about customers, product sales, financial results, and labor
costs
o understand its customers, products, and customer service in new ways
 1. Identify one new application of the data that you already collect in your own
organization that can add value.
In my previous work experience, a data application that I encountered was customer
profiles. These customer demographics are obtained through a marketing automation
platform - MailChimp. It service includes offering marketing CRM tools that our
organization can use to turn audience data into sights that guide our activities, and
create integrated campaigns. It gathers our audience data, marketing channels, and
insights together so we are able to reach our goals effectively. Through this platform,
our organization is able to understand our audience better, build better relationships and
find new ones.
a. Describe it in some detail and how it would produce value to your organization
By understanding our customer profiles, we are able to find customer patterns through
the platform. For instance, the platform’s “Audience Dashboard” shows us pre-built
segments such as recent sources of growth and top locations. With this dashboard, we
are able to estimate the demographics of our customers and predict our customers’
lifetime value and their likelihood to purchase our products again through customer
segmentation. After that, we set up automated messages to customers based on
specific segments or tags. Overall, these contact data generates information such as
engagement rates to discover customer patterns, preferences, and behavior to provide
a personalized experience to the customers. This data generates value to our
organization in such a way that we are able to collect customer data, turn them into
actionable insights, monitor trends, track performance, eventually creating more
valuable integrated campaigns and enhancing customer loyalty.

b. How would you develop a business case to gain its development?

I would develop the business case by showing how this application data can influence
decision making and help in providing a clear picture of business performance and
improving business objectives. I would then provide quantitative information to show this
application data can affect company’s revenues and improve customer relationships. I
would also thoroughly identify business value outcomes to this data application to gain
its development.