Published: 2021-09-15 15:15:10
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It’s important to use “the customer future worth” in DBM rather than observed level of play in the past because the ability to predict future play helps this company to build relationships with customers based on what it is predicting to happen in the future and not only past activities. This new system enables the Casino to invest in customers that according to past activities alone were not great customers. Customers that visited the company only once, for example, may not have a great deal of past activities, but because this person’s profile shows that this person can potentially be a great customer in the future, it makes sense in this new system to invest in this customer. 3.
How does Harrah’s integrate the various elements of its marketing strategy to deliver more than the results of Data Base marketing? Harrah’s created the Total Gold program to facilitate and encourage cross-marketing visitation by its customers. To execute this program, this company created an integrated information technology network that linked all their properties together (this technology was patented to avoid competition from using it). As a result of this program, revenue grew. This integration, as the case points out, allowed this company to develop a distribution strategy to attracted customers, without having to depend so heavily on expensive infrastructure.
The next phase of the Total Gold program was the Total Reward program, which allowed this company to not only encourage cross-marketing visitation, but also reward and incentivize customer’s loyalty. With this Total Reward program they created an emotional component to the customer/company relationship. The best way to summarize this idea is what Mirman said “we want customers to think… I want to go to Harrah’s because they know me and they reward me like they know me, and if I went somewhere else they would not”. How Harrah’s integrated their information and implemented these programs, therefore, resulted in better ROI because they added more value to its customers with the information gained with the data base.
The data base and the way Harrah’s worked with it, gave customers what they truly wanted and facilitated customer’s loyalty to the company among all properties. 4. What is the sustainability of Harrah’s actions and strategy? Harrah’s strategy is clearly to gain knowledge about their customers, foster customer’s loyalty, and prevent customers from taking advantage of entertainment options from the competition. This company’s idea to implement and maintain a loyal customer base pushed it to be a first mover in terms of improving technology, integrating all the properties to one central data base, and running experiments to understand customers. As mentioned in the text “the farther we get ahead and the more tests we run, the more we learn”.
This strategy is not sustainable in the long term, however, because once the competition realizes that this is working, they can also start investing in this kind of data base/technology and loyalty programs. Competition will not overtake Harrah’s knowhow overnight. Harrah’s has been integrating its system for years and it gained valuable insight about customers along the way. It’s important for Harrah’s, therefore, to continue evolving their marketing strategy to stay ahead of competition. They could move, for example, to the next phase of marketing strategy, from a marketing orientation (what clients want and need) to an interaction orientation (more communication and participation of customers in determining the services). 5. What are the privacy and ethical issues Harrah’s should be concerned about?
The text says that Harrah’s was not concerned about privacy issues because customers perceived the rewards and mail offers to be valuable to their specific needs. In this case, even though the company was tracking personal information, such as gamming behavior, customers did not seem concerned about privacy because they were happy about the benefits from the Casino “knowing” them. In my opinion, as long as customers know their gaming information is tracked and this information is used towards the reward programs, I don’t see any ethical issue with this policy. Harrah’s should be concerned about ethical issues, however, if they start using customer’s information for other purposes, such as share this information with other companies.

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