As part of an effort to fuel its customer loyalty program, Harrah’s Entertainment Inc. plans to replace the business intelligence tools used by Caesars Entertainment Inc., which it recently acquired. Since the Harrah’s strategy wins out in this merger, the Harrah’s tools also follow.Jason Pashko>Text
Later this year, Harrah’s will replace the SPSS Inc. analytical tools used at four Caesars properties in Las Vegas with predictive modeling and ad hoc analytic tools from SAS Institute Inc. and BI reporting tools from Cognos Inc. Harrah’s uses those tools to link customer gaming and spending habits with marketing programs.
Harrah’s, which completed a US$5.2 billion acquisition of Caesars in June, is scheduled to begin the five-month process of converting Caesars properties in Las Vegas to its own IT systems in December. The project is slated for completion in April, said Jason Pashko, director of database, reinvestment and analytics at Harrah’s.
“Since the Harrah’s strategy wins out in this merger, the Harrah’s tools also follow,” Pashko said. “We’ll be changing out for the most part all legacy systems at Caesars and replacing them with Harrah’s.”
Harrah’s uses SAS 9 analytical tools with proprietary algorithms running on a Teradata data warehouse. The system links information gathered about customer spending from its Total Rewards customer loyalty program to campaign management and revenue management programs.The company uses analytics to segment customers based on spending behaviour and offer deals based on predictions for profitable future spending. Analytics also comes into play when Harrah’s compares how a customer actually behaved versus the behaviour that was predicted.
With the conversion, Harrah’s faces a challenge in building new analytic frames of reference for the additional properties, Pashko said. For example, before the acquisition, Harrah’s had only two Las Vegas properties where customer data was compiled and analyzed to build marketing promotions.
With the additional properties, officials are grappling with more fragmented demand and expect that the Harrah’s BI system can meet that need. “How do you understand how a customer thinks about those properties when you have six versus two?” asked Pashko.
The process of converting Caesars’ customer loyalty program into Harrah’s will also require expanding the process Caesars used to analyze its customer base.
“They didn’t have one central view of the customer,” Pashko said. “The second we convert a Caesars property, we’ll be looking at that customer from a corporate-wide perspective. We think of the entire business view of the customer.” Keith Gile, an analyst at Forrester Research Inc., said many companies are looking to advanced analytics to better understand customer behaviour.
Complexity is always an issue with predictive analytics, he said, noting that Harrah’s has to consider variables like casino location, local demographics, travel dates and weather conditions.