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Freebies Help Harrah’s Ward Off Flashy Rivals

CTAM Summit attendees here got a taste of the CTAM U experience, participating in roundtables discussing how Harrah’s Entertainment fended off competition from glitzier, more feature-packed casinos.

The casino company used data mining to determine that back in the late 1990s, it was attracting hotel guests who were spending their gambling dollars elsewhere. In 1998, the company was earning only 36% of the gaming dollars spent by its guests. Harrah’s invested $100 million in technology to better mine data from the participants in its loyalty program.

That data led the company to decide to cater to frequent gamblers, even offering them cash-back coupons for future visits as a reward for past play. The latter was a strategy cable executives in panels July 23 branded as counter-intuitive, because, in operators’ experience, free services commonly cause consumers to devalue the product, participants said.

But data from the Harvard Business school study on the casino chain indicated that the cash-back coupons drew repeat business, even in the months beyond the expiration date of the coupon offer.