In my last post I talked about the management style of Gary Loveman at Harrah’s Entertainment, and in this post I will focus on Harrah’s marketing and customer service. I just read “Diamonds in the Data Mine” written by Gary Loveman for the HBS. Before Gary Loveman came to Harrah’s, Harrah’s was following the pack with their Total Gold program in the 90s and they were able to evolve their program to “Total Rewards” and they have been leading the pack ever since. Their old Total Gold program allowed Harrah’s to find a trip-by-trip estimated value for their players and they gave comps, free rooms, and steak dinners like everyone else in the business. Total Gold was unable to capture the true value of their customers and that is where Total Rewards came in.
Former Harrah’s CEO Phil Satre hired Loveman as COO to lead the company “into a marketing-driven company that builds customer loyalty to all Harrah’s Properties.” Customer loyalty using marketing and excellent customer service is their number one goal. In 2002, Harrah’s owned and ran 26 casinos in 13 states, and by that time their Total Rewards program was up running. The only way they were able to accomplish that was by branding and consolidating Harrah’s. The trick was getting all of the properties on the same page and offering great service and services at all of them. That was the Harrah’s brand and if one of their customers found themselves in proximity to a Harrah’s property, they were able to use their Total Rewards card and their comps at all of the 26 properties.
Besides consolidating their properties, Harrah’s was able to find a lifetime value for their customers by tracking everything they did. Every time a customer used their Total Rewards card, Harrah’s tracks it. Whether it was at a slot machine, blackjack table, restaurant, gift shop, or boutique. They track everything and they are able to use that information to get those customers back, whether it is with a free meal or a shopping spree in the boutique.
“A happy customer makes for a happy company.” Having happy customers is what Harrah’s strives for because happy customers spend 24% more per year on gambling. Their customer service starts on the phone or the valet and runs through every person, nook and cranny. Harrah’s was able to implement a bonus program for all of their employees who used outstanding customer service. Every year each Harrah’s property was rated on customer service through comment cards and if they exceeded the 3% everyone was given a bonus up to $200.
Total Rewards has been the best rewards program to date. It is so valuable to Harrah’s and in return their customers receive the best offers and services. I don’t know about currently, but in 2005 especially Harrah’s was run by some of the smartest most educated people in the country. Total Rewards marketing is very strong. It is run by MBAs and PhDs and is just unfair to the common gambler. Harrah’s goes after everyday people and they are able to influence them into gambling past their means. They entice them to come in for free cash and free play and the customer stays until every last cent is gone.
Lately I have been talking to a lot of dissatisfied Harrah’s customers and former employees. The economy crash has caused Harrah’s to lose a lot of their great employees and worst of all their great customers. Budget cuts after budget cuts has brought Harrah’s down emotionally. All of the best employees (the highest paid) were fired and they have even cut off their players. I talked to a former Harrah’s player of over 25 years, and his comps were cut off because he had not visited them in a year. He was in Australia for business the past year and Harrah’s would not budge. His wife was so mad that she said she would leave her husband if he ever went back to Harrah’s. Big players like that are extremely valuable and Harrah’s kicked him to the curb. Even in tough times, Harrah’s should have been smart enough to know that this customer pays their bills.