Data Base Marketing ProgramEssay Preview: Data Base Marketing ProgramReport this essay1. Please evaluate the effectiveness of Data Base Marketing programs.The underlying principle as to why Harrahs Entertainment Inc. took such an information technology-driven and innovative initiative was to engrave the customer intimacy, which certainly results in loyalty in the long-run, into its core competency. The most promising approach for a company trying to occupy a sweet spot in the grueling gaming industry seemed to begin pursuing a strategy that can best distinguish itself from the rivals.
During the times the rivalry among competitors was getting intensified and the relaxation of gaming rules was prevailing, Harrahs Entertainment Inc. found its pathway in focusing more on people by utilizing direct marketing techniques the market had not been introduced before. The approach, however, failed the company to achieve its desired targets, especially after the competitors commenced innovating the way they served their customers, creating highly themed environments that promise new experiences for their customers. Nevertheless, Harrahs decided to base its core competency on customer loyalty unlike the competitors, and anticipated that it could be a market leader based on that skill.
In a bid to develop a viable strategy that would have a massive impact on the company, and eventually became a candidate for changing the industry dynamics, Philip G. Satre, Chairman and Chief Executive Officer of Harrahs Entertainment Inc., hired an individual, Gary Loveman, to fill the COO position. The hire of Loveman initiated a string of winds of change. Once the company set out the new organization structure, which promised to link all casinos belonging to Harrahs to each other so that a corporate level strategy could be diffused among the properties, Loveman began developing brand image strategies to differentiate the company. Improving service was perceived to be the key factor of shoring up customer and organization relationships.
Once the company laid the foundation of a superior marketing strategy based on customer loyalty, the next step was to specify the system. Data Base marketing (DBM) was therefore designed to include information about existing and potential customers, which is relevant to the customized direct marketing initiative. DBM was conceived as a significant business tool to strengthen customer intimacy, and subsequently increase loyalty. The notion of the effective utilization of this IT-driven marketing was to tap into the information of customers, which was already added to the system, to target specific customers in customized ways so that the company may have accomplished to retain them for a long time. This would come through attracting the new customers, increasing the loyalty level of existing ones by improving their visit of frequency and gaming budgets allocated for Harrahs (New Business Program, Loyalty Program and Retention Program)
The marketing of the brand that is designed to increase the loyalty of the user was designed to enhance the profitability of the overall business. The concept of the effective utilization of this marketing was to extend the length and variety of campaigns, offering more of the existing existing customers and increasing the number of engagement points. On the other hand, the concept of the effective utilization of this marketing was to expand the number of contacts available and increase the number of customers that could be visited by an app. For example, a dedicated client who wants to stay with the brand could have any experience or experience they are seeking, but would rather play a game. The target audience could learn more about the brand. Also, all the campaign details could be stored in separate lists or in a separate database, allowing the user to determine the target audience of a campaign. Additionally, there would be no need to re-do all aspects of the campaign itself. The primary goal of a DBM campaign is to enhance engagement, increase the customer return, and strengthen customer-friendliness. To accomplish this, more and more of the existing customers would be connected and engaged with the brand and thus will be attracted (and possibly have a more profitable future) and in the future be able to engage with the brand.
Customer Acquisition strategy
We took many different approaches to customer acquisition. Most approach was to invest in new products from the new product base of the business, i.e. from the start of the current sales segment. A little experimentation was conducted. A good combination of all of the approaches included an objective of using a lot of different and innovative new product approaches. As you get to the point where you can think clearly on what products your customers are going to buy, there is also another aspect of the concept that is important. Because of the importance of this concept, we also needed to understand the importance of getting rid of all of the new brand products that are based off of the old.
One of the major factors that drove the decision was the fact of new product development cycles. So we were forced to develop new products that did not fit into the existing brand categories but had similar strengths. We also went out and applied the same approach to every product that is part of our business.
So, how do you develop a product that is so well integrated with your existing product base that it will make an impact throughout the business and could then be used in different types of sales? If the new product doesn’t work, we are forced to take a risk and invest at a higher level and create new products. Since we have already seen how it will fit the brand well, but the risks are so large that there are many possible solutions in some scenarios. In other cases, we were faced with an unexpected number of potential competitors to our product base and decided to adopt them. Here are some of the main features of an optimal market:
Exposure is not limited to only new products or new businesses. This model is already popular in the social media world.
What is important about market entry will depend on the way you view market exposure and market dynamics.
To achieve exposure, you must differentiate market entry from a market capture.
In a market capture, the first thing you try to do is to establish how much of a market can be expected of you within the target market, namely the user base – which includes you personally, the user base of that brand, the user base of your product – and the user base of the customer base.
This is how success is measured. In a market capture, in order to create a business model that maximizes the audience of your target customers that will eventually be connected with the marketing strategies which best work for you, the best ways to achieve exposure include:
1. Creating a platform to provide a platform that
Another advantage of DBM was to allow the company to envisage customer behavior and worth, which was considered to be an incredible innovation in the gaming industry. Customer profiles recorded on the information system were used to know about gaming preferences of customer, betting patterns, how often they visited, where they dined, how much they redeemed, and whether they are local and lodger etc. Harrahs capitalized on this information to engage in customer centric direct marketing by sending out personalized incentives to customers to play in. Besides, DBM helped to identify some opportunity-based customer segments for rationalized reinvestment. This would better be used to target untapped customers, for instance, who had low worth but high predicted value, or had low observed frequency but high worth. Furthermore, DBM was useful for tracing customers over time, and conduct marketing experiments, so that Harrahs could target right customer by using correct marketing techniques. This evidently allowed the company to shift into lean service system by eliminating the costly and useless business activities, such as “Same Day Cash”. All things considered, Harrahs managed to gain a better understanding of customers to increase customer intimacy/loyalty, which eventually elicited positive financial returns.
2. Why is it important to use the “customer worth” in the DBM efforts rather than the observed level of play?In the late 90s, Harrahs Entertainment decided to initiate the Customer Relationship Management program to intervene its market and boost its service. This program consisted two elements: Datebase Marketing (DBM), and the Total Gold program. DBM is a quantitative method to collect and analyze data that related to customers behavior – mainly the Theoretical Win of its customers. Harrahs utilized the DBM approach to collect customers base and Total Gold program to build a good relationship with its customers.
The main reason that Harrahs utilized DBM to decide customer worth was that it would accurately predict the theoretical amount the house expected to win based on customers future worth. It would not be possible to determine the customers future worth just by observing their past behavior, or their level of play. The Theoretical Win from a Customer per day was calculated by A*B*N*H, the product of the house advantage on a game, the average bet, the number of bets per hour, and the number of hours played per day. This equation could successfully predict the worth of a slot machine player. A more complicated model was built to predict the table game player.
Simply put, Database Marketing was a science tool. In the past, when Harrahs predicted customers worth just by observing level of play, a customer who just paid Harrahs once and spent limited amount money would never be on its radar, even though he could be a great customer to other Casinos. DBM enabled Harrahs to find this kind of customers, and help Harrahs to steal these customers from its competitors.
Furthermore, initiating DBM with the Total Gold program simultaneously helped Harrahs to decide which group of customers should be its target customers, to whom Harrahs should invest more. To illustrate, using the data collect by the DBM, Harrahs their target customers should be divided to three segments .This was decided by comparing observed behavior to predicted behavior and identified the opportunities segments based on disparity between predicted and observed values. The opportunity segments should be those either with a high worth or a high predicted worth. Using the DBM approach, Harrahs successfully determined exactly which customer had a high worth or a high predicted worth.
DBM also made it possible to conduct