Anyone who’s been a lifelong Red Sox fan knows a little bit about loyalty. Most important: It pays off in the end.
For David Norton, a longtime BoSox follower, and head of relationship marketing for Harrah’s Entertainment, the payoff hasn’t taken nearly as long.
The reason? Harrah’s has been turning the gaming world on its head by taking a different approach to customer loyalty. Rather than relying on “whales” to pump up revenues, the company is focusing its efforts on the broader casino audience that spends less but visits more often.
To make this strategy work, Harrah’s collects extensive data on its customers. It uses that information to build relationships with them and create a more personal interaction that pays off – for the casino and its clientele.
“We’ve developed a series of activities – all relationship-marketing oriented – to encourage our customers to be more loyal,” says Norton, senior vice president of relationship marketing for Harrah’s Entertainment.
“We started with a very highly segmented direct marketing program, we reengineered the loyalty program and we relaunched Total Rewards last year. It’s just been a continuous story around evolving our marketing capabilities to focus on our best customers. And we’ve seen really nice results in terms of them becoming more and more loyal to us.”
Norton’s responsibilities at Harrah’s include the company’s direct marketing strategy, VIP marketing, revenue management, teleservices, the Total Rewards customer loyalty program, Internet marketing, marketing reinvestment and operational customer relationship management.
About 76 percent of Harrah’s gaming revenue can be tied to members of the no-fee Total Rewards loyalty program, Norton says. Of those, about 50 percent were given trips or some sort of incentive to come in to their network of 26 casinos. “And the vast majority of those offers are made through direct mail,” he says.
Total Rewards, a three-tiered, aspirational program, allows Harrah’s to gather important customer feedback from a database of 6 million active members. Customers sign up and are given a card, which they swipe when playing a game. The more they play, the more credits they earn; credits that can be used for discounts at onsite stores, preferential seating at casino restaurants and invitations to exclusive events, all the way up to free vacations or shopping sprees.
Harrah’s uses the data to deliver targeted, customized messages and offers to members, either through direct mail or e-mail, Norton says.
“The great thing that we have accomplished, and it’s been in place since 1999, is a very highly segmented direct marketing program based on customers’ life cycles, our inherent knowledge of how loyal they are, how often they come, and their daily values,” he adds.
And because Harrah’s uses the same 80 or 90 segments in all of its casino marketing programs, information can be shared among facilities, accelerating learning and the rollout of targeted and customized new offers.
“We can quickly do tests and figure out which types of offers are most influential to customers or how influential a particular marketing intervention is,” says Norton. “That’s really the routine process that we use for direct mail.”
In a nutshell, Harrah’s tracks demographic information such as gender, age and address, and combines it with transactional information to drive the segmentation and customization of the marketing interventions.
