Customer Lifecycle and Database Marketing Case Study

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When comparing the theoretical wins of customers targeted with the budget upside program with its incremental cost, the difference is $1,927, which amounts to 4%. This is significantly less than the results of the frequency upside program, but nonetheless a positive value that resulted in profit. The initial investment in this program is also significantly lower than that of the frequency upside program.

Harrah's CRM strategy is to focus entirely on customers and their potential behavior. It is assumed that everything Harrah's gives them has an effect upon customers' future gambling decisions. Hence, the Gold Card program is used to collect customer profiles, which in turn are used in it direct marketing efforts targeted towards customers who have shown the potential for loyalty. In this way, the programs are conducted in an integrated way to target customers who are most likely to be loyal in the future of Harrah's.

Specifically, this effort occurred in three phases: new business; loyalty; and retention. The first phase focused on encouraging new customers to return a second and third time. The second phase was focused on extending existing relationships with customers who have visited Harrah's for three times or intermittently for six months. The final retention phase was focused on customers who have demonstrated signs of attrition in order to reinvigorate their loyalty.

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This strategy is highly sustainable, as it focused not only on new and existing customers, but also on customers who are showing signs of leaving. By considering elements such as future customer worth, the hotel ensures a dynamic and sustainable strategy to maintain its customer relationships and continually forge new ones.

Important ethical issues should be a major concern for Harrah's in terms of its Total Cold card program. When players use these cards, their play preferences, betting patterns, restaurant and hotel preferences are tracked, along with the frequency of their visits and the length of their play time. In addition, their birth date and home address are recorded in a customer profile for use in direct marketing.

According to Buttle (2008, p.117), customer privacy is a basic right, which should be honored by the company. To mitigate this concern one possibility is to provide customers with a disclaimer stating that the information is for Harrah's sole use and will not be shared or otherwise compromised. Another option is to provide customers with a choice to be targeted for the company's future marketing efforts. This is a strategy used by many businesses where customer information is collected (Trevino and Nelson, 2010)......

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