When Phil Satre resigns as Harrah’s Entertainment Inc.’s CEO on Jan. 1, a ripple effect will move direct marketing-savvy executives into several top positions.
The changes reflect the increased importance Harrah’s has placed on mail and direct response. Four years ago, the company was spending around $24 million for 40 million individual solicitations. In 2003 Harrah’s will lay out $50 million of its $300 million marketing budget for 80 million mail pieces.
Almost all of that targets the 6 million-plus active members of Harrah’s Total Rewards loyalty program. (The company’s files hold information on more than 25 million individuals, but only those who have played at least once within 12 months are considered active.)
In the past these efforts have paid off handsomely: Data-based marketing efforts have generated an increase of $24 per room in gaming revenue, every day of the year, across all 15,000 rooms in all 26 properties. Playing along at home? That’s an additional $131 million annually.
Much of the focus on database efforts is due to Gary Loveman, who will replace Satre as CEO, while Satre will keep his position as chairman. Loveman, a former Harvard Business School professor, joined the company in 1998 as COO and was named president in 2001.
Besides Loveman, Richard E. Mirman is stepping into the chief marketing officer, senior vice president, new development position from his spot as senior vice president of marketing, and David Norton will become vice president of relationship marketing. Norton’s current slot, vice president of loyalty marketing, will go unfilled.
It’s no accident that the company’s mail budget and volume have doubled since Loveman took over. Loveman’s focus has been on using quantitative data to drive the company’s marketing efforts. He has also strengthened Harrah’s database of transaction data, first with a companywide warehouse called WINnet and most recently with a multimillion-dollar data analysis system.
The lesson of tailoring communications to reflect customer interests has not been lost on other Harrah’s executives.
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