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The big payoff

Active data warehousing sweetens the pot for Harrah's.

by Gary Evans

Sandeep Khera, director of operational customer relationship management, Harrah's Entertainment.

The woman standing at the slot machine is explaining to her husband why she wanted to come to her regular casino on her birthday, even though a new one has opened up in the vicinity. "You have to understand," she tells him, "They always take great care of me here. I really feel like they know me."

As if on cue, a smiling floor manager taps her on the shoulder and presents her with a birthday cake, candles already lit. She hasn't informed the casino that it's her birthday and isn't expecting any gifts or special treatment to help her celebrate. Even so, she's delighted with this affectionate display from the casino floor staff. Her husband grins at her after the rousing chorus of "Happy Birthday" finishes and the singers disperse. "Free cake?" he says. "Heck, I want to come here for my birthday."

This isn't a glimpse into the future or the dream of a business owner wondering how to increase the lifetime value of customers. This is reality, the result of the partnership between Harrah's Entertainment and Teradata. It provides a demonstration of the power of active data warehousing and its ability to redefine how businesses interact with their customers.

Upping the ante
Harrah's is, by anyone's reckoning, an extremely successful business. Founded in 1937, the Las Vegas-based company is a top provider of casino entertainment. With more than 40 casinos worldwide and revenue in the billions, Harrah's knows how to make good business decisions. But that doesn't mean the company doesn't have room to grow.

Sandeep Khera is Harrah's director of operational customer relationship management (CRM). "We've been doing analytical CRM for many years, and we use that to drive our closed-loop marketing cycle," he says. "This principally results in decision-science-based marketing interventions through direct mail, e-mail and outbound telemarketing channels. But these efforts tend to reach customers days or even weeks after their visit. Operational CRM allows us to provide the same value and service but we can deliver it before the customer has even left the floor."

According to Khera, an operational CRM system could profoundly improve Harrah's business in three primary ways. "To begin with," he says, "over the last several years, we've implemented technologies that have automated and reduced transaction times on the floor, but that means we've reduced the number of customer-employee touch points, too." Reducing touchpoints potentially creates a problem. "Fundamentally, casinos are about experiences and customer service, so one challenge is finding ways to maintain and maximize the value of these interactions."

Beyond this, Khera explains, an operational CRM solution helps to satisfy marketing needs. As more and more gambling channels open to the public, standing out from the competition becomes an increasingly onerous challenge. "An additional capability we wanted was to be able to pass on personal, timely and customized marketing offers to our clientele, right on the floor," he says.

Finally, Khera points out that operational CRM can profoundly affect a customer's experience: "We want to perpetually create the feeling that luck is pervasive across the floor. We want our guests to feel like they're in a lucky environment." Luck, of course, is outside the human ability to control, but the perception of luck is not. Hitting the right person at the right time with the right message, particularly when the message is delivered via transparent triggers, creates an environment conducive to fun—the kind of place where people like to gamble.

Sam Dillard, corporate director for enterprise applications support, Harrah's Entertainment

Seeing and raising
The relevance of active data warehousing to a company like Harrah's is self-evident. "We've actually been using Teradata Database technology in conjunction with custom development for some time," says Sam Dillard, corporate director for enterprise application support at Harrah's. "We've used it to extend our own customer relationship management aspects into the environment of the casino."

In other words, Harrah's was already well ahead of the curve in terms of collecting and acting on valuable client data points, but the marketing and technology team at Harrah's took it one step further by asking the right questions: How could they better use the data? Could they turn the slot floor into a communications channel to their customers, approaching them with a message that would possibly improve their experience?

Without an active data warehousing solution, Harrah's approach to floor service was limited to an ad hoc basis, and wasn't always as timely as required. "We had programs and systems, and customer service points were certainly being taken advantage of," Dillard says. "Specific preferences for a given customer were being used to create great customer service moments, but it really depended upon the initiative of any given employee to use the tools they had. Also, once a customer left the casino, there was an undesired lag before the customer was reached with our message or offer." Typically, the offers had to be passed through marketing and sent out via surface mail, a process that could take weeks. The Harrah's team knew they could improve on that.

Harrah's leveraged their relationship with Teradata to help make their vision a reality. "Harrah's has a strong culture," says Dillard. "We've developed good partnerships between marketing and the information technology group over the years. And we had experience with Teradata and knew they could help us deliver some of the programs we wanted.

"It's been our practice with the enterprise data warehouse to try something in a small way, allow the business the opportunity to examine the data and see if there is a business case for extending that technology and implementing it more robustly," Dillard notes. "That's exactly what we did with this project."

House advantage
The team at Harrah's asked themselves how they could meaningfully intervene with a customer while he or she was in-house, and what data they would need. They realized the scenario required real-time information flowing off of the casino floor, including things like the machine at which the customer was sitting, the length of time they'd been playing and even their historical relationship with the casino.

"We can use active data warehousing to answer these questions," Dillard explains. "We already use Teradata for similar things. We use an adaptor they provide to reach into our database to look up relevant customer history so we can act on it immediately. We want to understand how long someone's been a guest, we want to know whether or not they're currently staying in our hotel, what their preferences are, et cetera. Then we pull this information back into our system to make a determination as to whether or not that customer should be eligible for an offer and, if so, which one."

With Teradata's help, Harrah's has been able to provide much more personalized, yet systematic, floor service for its patrons. Examples of what the casino has been able to accomplish include the ability to recognize first-time customers and to provide them with services and experiences designed specifically for new visitors. Another interesting capability is recognizing customers who have been away from the casino for an extended period of time. When the active data warehouse alerts staff of such a return visitor, Harrah's provides a special "welcome back" interaction designed to make the customers frequent the casino more regularly in the future.

Read 'em and weep: full house
Another important program made possible through active data warehousing is Harrah's Player Contact System (PCS). This program is central to managing the relationship with those customers likely to be the most profitable for the casino.

Explains Dillard, "For some time, we've had employees who are VIP hosts. It's their responsibility to cultivate an ongoing personal relationship with our best customers and work with them to maintain their interest in coming to our properties."

Historically, those hosts were left to their own devices to drive VIP revenue, and they used everything from little black books to sales databases as their tools. Harrah's had no way of centrally managing how and when a VIP was contacted or by whom, or documenting the interaction. They also had a data/relationship loss risk. The relationship between the host and VIP is, by its very nature, extremely personal. If a host left the organization, a lot of these relationships—and information about these relationships—would go with them. Harrah's clearly needed a capability that would allow them, as an enterprise, to maintain this trove of guest data.

As if that weren't enough, just organizing contacts can be very challenging. "Historically, there was no great way to quantify which VIPs to spend the most time on," Dillard continues. "What we're doing now is using the analytical data we collect to prioritize the contacts for our VIP hosts. This helps ensure they are interacting with the customers who have the greatest revenue potential. We need to make sure we're focusing on the right people, our best relationships, instead of those who just call most frequently."

Taking it to the bank
Dillard and Khera agree that Harrah's active data warehousing program is a success. In just the fourth quarter of last year, Harrah's initiated more than 14,000 proactive customer interactions, and has seen better service scores in customer loyalty. Using the PCS, VIP growth over each of the last three years has been upward of 20%. Harrah's is also in the middle of designing and piloting an off-site disaster-recovery system, using Teradata's dual-active technology to ensure that these critical systems don't go down, even temporarily. As Dillard notes, "We're using the Player Contact System as the launch project. We've already completed several milestones, and assuming this project is successful, we'll no doubt continue to protect other operational CRM systems the same way."

By using active data warehousing to manage relationships with customers—whether new patrons or long-time VIPs—Harrah's has been able to maximize revenues while enhancing the casino experience. The lessons they've learned from their launch programs will allow them to branch out to achieve even better results in the future and maintain their market leadership.

Ultimately, the success of these projects rests on good logic and partnerships. As Dillard says, "We got smarter faster and we knew that what we wanted to tackle next was designing the operational CRM application on the IT side. Working with strong teams internally, and with the help of Teradata, we've been able to really make this work on a large scale. We have been able to stay at the top of the curve."

As you might guess, Harrah's loves gambling—just not when it comes to managing their relationships with their customers. T

Gary Evans is a regular contributor to several technology publications.

Photos by Jeff Green and Lisa Buser.

© Teradata Magazine-June 2006

RELATED LINKS:
Teradata Solutions for Gaming A Sure Bet for Growth: Teradata Gaming Decisions Active Data Warehousing

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