Harrah’s knows how to get folks moving

By Bill Toland,
Sunday, January 29, 2006
Pittsburgh Post-Gazette

You can build a $512 million casino. You can surround it with river trails and condos. You can add all the trimmings — dinner buffets and swanky restaurants, a sports bar and a concert hall, jewelry shops and a hotel tower, not to mention thousands of slot machines.

Build that casino in Las Vegas and people will show up. But if you take the same casino, plop it beside the Monongahela River in Station Square, will people still want to come?

Harrah’s Entertainment Inc., based in Las Vegas, is betting they will. And it plans to make them a discount offer they can’t refuse.

Harrah’s turned the gambling world on its head in summer 2004, when it announced that it would buy rival Caesars Entertainment for $9 billion. When the deal was finished last year, Harrah’s became the world’s biggest gambling company, leapfrogging MGM Mirage, which itself had acquired Mandalay Resorts.

After the deal took effect, Harrah’s chairman, Gary Loveman, detailed the company’s strategy, which, he said, largely revolved around expanding the company’s Total Rewards program, already with more than 40 million members.

It’s a program which can be used to steer loyal Harrah’s brand customers to properties they otherwise might not visit, using shopping discounts, vouchers, free tickets and other incentives.

The program does more than offer discounts. It’s the envy of the industry because Harrah’s has been able to amass tons of information about its customers, and the company has been able to use that information to advertise on an intimate scale. The Wall Street Journal called it “an obsession with technology,” and was impressed by “Harrah’s ability to move its customers around the map” of nationwide casinos.

Alberto Lopez, Harrah’s spokesman, calls it cross-market promotion. “We do a ton of direct mail, as you can imagine,” he said. Harrah’s customers on the East Coast would, for example, be notified of the grand opening at Station Square. And, if they make the trip, they’d be offered meals, massages and more.

Sometimes, it’s a lot more.

When Harrah’s remodeled a riverboat casino in North Kansas City, Mo., last year, it sent out shopping vouchers worth $500 and restaurant vouchers worth $300 and offered six free hotel nights to customers in the St. Louis area. The cross-market steering tactics were so aggressive, some recipients thought they might be a hoax.

(Bill Toland can be reached at btoland@post-gazette.com or 412-263-1889.)