Wednesday, June 18, 2008

Harrah's Adopts Surface Computing

I’ve written about Microsoft’s surface computer before. It offers lots of opportunities for entertainment and interaction but it’s still pricey at $10,000 per unit. Also, I’ve long been fascinated by Harrah’s and their incredibly comprehensive and successful loyalty card program.

When I saw the article in CNET about Harrah’s installation of six surface computers in a bar in one of its Las Vegas casinos I read it with interest. The computers offer bar patrons a variety of applications—they can develop their own mixed drinks and send them to other patrons, watch YouTube videos, play games, and use an app called Flirt. You can see the uses on this seriously lame promotional video from Microsoft. I’m having trouble deciding whether the women or the men are most insulted by the content, but it does show the tables in action. View the video here.

The implications are broader than just empty-headed beautiful people flirting in a bar. Harrah’s has long been famous for its Total Rewards program and the way they use the resulting database to market their individual casino locations. If you know this story, your first thought is, “Data; I wonder what use they are going to make of it?” A lot of their marketing is based on knowing what individual customers do in specific casinos and marketing to their interests and needs. The surface computers are meant to fit into their databased marketing program in some way. I can’t see anything very profound from the features they currently offer, but it may be only a first step.

If you don’t know the Harrah’s story, it’s an excellent example of disciplined database marketing. If you have access to the Harvard Business Review there have been several articles by and interviews with CEO Gary Loveman since he took over in January 2003. There is a recent interview on The CEO Show with Robert Reiss. The 18-minute audio interview focuses on customer service but the importance of data about customers and how they use it at Harrah’s is frequently emphasized in the discussion. To listen, follow this link and scroll down to the March 9, 2008 interview. It’s worth it.

The Total Rewards program is deservedly famous. Take a look at its tiered strategy, which has emerged from segmentation analyses over the years. Harrah’s SVP of Relationship Marketing, David Norton, says it’s more than just a rewards program. Another way of saying that is that Harrah’s captures, mines and develops and executes marketing programs based on the customer data they capture from the program. That applies to individual customers and individual casino locations. In 2005 Norton said that 50% of Harrah’s revenue was driven by [targeted] marketing. That’s a major achievement, especially in an industry where glamorous properties, big-name entertainment and marquee chefs are the essence of strategy.

It’s about both data that drives programs and people who execute them. Gary Loveman has understood that from the beginning. It doesn’t happen overnight, but once a company puts a disciplined databased marketing program into place, it just gets better over time.

The Internet is now a chief source of data about our customers. How many of us capture and use transaction and activity data well? How many develop customer-effective programs that provide more of the kind of data we need to serve those customers better and win their undying loyalty? Very few!

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