Catering to the wealthy

When a high roller steps into a Harrah's casino, the host -- whose job is specifically to look after such top players -- is likely to ask about his wife by name, tell him his suite has been stocked with his favorite brand of cigars and slip him tickets to that week's PGA golf tournament.

This personal touch occurs whether the gambler is in the Las Vegas casino he has frequented for years or is visiting Harrah's in Atlantic City for the first time.

The key is Harrah's Entertainment's Player Contact System, a sophisticated Web-based application. "Our competitors spend money tearing down (and replacing) casinos," says Tim Stanley, CIO at Harrah's. "We spend on technology. If you're a good customer, we do everything we can with IT to retain your business."

Having grasped the reality that the rich are, indeed, not like you and me (if only because they have more money), businesses are using IT to identify, market to and generally pamper them.

Companies hasten to say that they're not slighting those with lesser incomes; Stanley says Harrah's "sweet spot is not the high rollers but the 'middle rollers,' " those empty-nesters who are seldom multimillionaires. Nevertheless, there's no denying the impact of wealthy customers on businesses in industries such as financial management, travel and leisure, retail and automotive.

According to Gartner analyst Kimberly Collins, "When organizations do a formal calculation, they often find the 80-20 rule applies -- the top 20 percent of their customers account for 80 percent of revenue. In some companies, it's 90-10."

With that kind of money on the table, it's no wonder that companies are developing Web sites and CRM systems with an eye toward the affluent. And their results appear to justify the investments -- whether they're luring high rollers away from other casinos or tactfully informing a retail customer that those to-die-for Manolo Blahnik kidskin midheel halter pumps will set her back US$445 a pair.

Driver's Seat

Jaguar Cars, a unit of Ford Motor Co. with North American headquarters in Irvine, Calif., is recommending that its dealerships use a recently upgraded CRM system to identify and please upper-crust customers.

"We're offering technology to help them better track the customers they do have, as well as prospects," says Mary Magrino, IT director at Ford's Premier Automotive Group, North America, which also includes the Lincoln-Mercury, Land Rover, Volvo and Aston Martin brands. "We want the dealers to be able to get more structured information -- something more efficient than keeping index cards."

The CRM tools that headquarters recommends (but doesn't mandate) for Jaguar retailers include Right Relationship 360 from ADP and Contact Management from The Reynolds and Reynolds Co (both vendors are US companies).

Once prospects become Jaguar owners, the company takes pains to make them feel that they've joined an exclusive club, according to Melissa Grady, Jaguar's relationship marketing manager. Many of the perks enjoyed by club members have become routine for owners of high-end cars: a toll-free 24-hour roadside assistance number, a complimentary magazine, free maintenance during the warranty period and cross-branding tie-ins with Hertz rental cars and a hotel chain.

In addition, the company has launched, which offers customers a personalized Web site that includes information such as the owner's manual for their model, maintenance-tracking software and recall notices. Grady says Jaguar is updating the site "to make it more personal and highlight customer benefits" but declines to be more specific.

Erin Kinikin, an analyst at Forrester Research, calls such customer-specific Web sites prime examples of the extras businesses bestow on affluent customers.

Jaguar also slices its databases by region to invite customers to some pretty hoity-toity affairs. For example, Washington-area Jaguar owners were recently invited to a private premi're showing of a National Geographic TV special about jaguars in the wild. Jaguar has associated itself with the animal it's named after because its demographic studies have showed that the conservation pitch is popular with its well-heeled buyers.

Improving the Odds

According to Harrah's Stanley, the $4.14 billion company's investment in customer-coddling technology has helped it prosper -- partly because it helps Harrah's pursue a more cost-effective strategy than many competitors. Casinos are generally most profitable during their first few years. When a new facility's glitz fades, profits usually do, too -- which is why gambling palaces are so frequently dynamited and replaced.

But Harrah's has eschewed the trend toward expensive theme-park-style casinos, focusing instead on being what Stanley calls "the top-of-mind choice for serious gamers." With its loyalty program and Player Contact System attracting such customers, including "whales" (industry slang for elite high rollers), Harrah's has increased same-store sales 18 quarters in a row, according to financial statements.

Moreover, Stanley credits the loyalty program and Player Contact System with boosting market share. He says Harrah's metrics indicate that in the past four years, the company's share of customers' total gambling budget has risen from 35 percent to 43 percent. "There's a $1.10 rise in our stock price for every percent increase," Stanley says.

Key components of the Player Contact System include a Teradata active data warehouse from NCR, middleware from Tibco Software and a new client-facing application from Blue Martini Software that was designed for retailers and has been heavily customized by Harrah's.

The Player Contact System is, in turn, one component of Total Rewards, the loyalty system Harrah's has been refining since 2000. The casino chain -- which has 26 locations in 13 states -- encourages customers to use a loyalty card for as many purchases as possible, from nickel slots to room charges to swank no-limit tables. The cards feed data back to Harrah's. Stanley says it takes only a couple of visits for the system to make accurate guesses about whether a customer fits into one of the casino's two highest segments, dubbed "avid experience players" and "very important players."

'Addictive' Service

According to Forrester's Kinikin, one of the top challenges when dealing with the rich is identifying them in all channels. "Good service is addictive," she says. "Once you get it, you want it all the time." Interestingly, she adds, the laggard channel tends to be the physical store. When an affluent client appears online or calls, customer service representatives in contact centers can immediately peg them as high rollers. This raises the customer's expectations, which may be dashed when he wanders into a store belonging to the same company and is treated like one of the great unwashed.

In that respect, the Seattle Mariners are fortunate: Their regular customers -- that is, season ticket holders and luxury suite owners -- have assigned seats. Last year, the baseball team switched from a largely paper-based customer-care system to a CRM system from Onyx Software. The software allows the team to track complaints and requests from season ticket holders as well as anybody enrolled in the team's loyalty program, says Larry Witherspoon, vice president of technology services.

Onyx helps the Mariners pamper suite owners through an approach that marries high touch and high tech. From the time a corporate customer or other high roller calls the club to order a suite, the in-house catering, housekeeping and ticketing groups are automatically notified of any special requests, "and the account exec can just pop in to visit the client" during a game, Witherspoon says. He says the team has reduced complaints from luxury suite holders a whopping 80 percent since implementing the software.

Searching in Style

Technology aimed at enticing the rich goes beyond CRM. One well-to-do technology company executive with a 1,200-mile weekly commute was such a regular passenger on the same flights up and down the coast that his airline took to paging him when those flights ran into delays. Kinikin says this type of proactive service is exactly what companies must offer affluent customers in order to retain their business.

Even the way the rich think about shopping is different, researchers have found, and upscale companies' Web sites are changing accordingly. Last year, Neiman Marcus implemented One Step, a natural-language search engine from iPhrase Technologies, at the retailer's Web site. Neiman Marcus' research showed that high-end shoppers are much more specific about the items they're seeking than average shoppers. For example, while a Target shopper might simply search for "pocketbooks" and sort by price, a Neiman Marcus customer is more likely to search for "cloth Kate Spade totes with leather trim."

According to a Neiman Marcus spokesman, the retailer has tripled its conversion rate -- the percentage of online shoppers who follow through and make a purchase. The spokesman adds that those shoppers return to the site twice as often as they used to.

Apparently, the rich know exactly what they want -- and if you want their business, you need to know exactly how to deliver.

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

More about Blue MartiniBlue Martini SoftwareFord MotorForrester ResearchGartnerHarrah's EntertainmentINSiPhrase TechnologiesJaguarJaguar CarsNCR AustraliaOnyxOnyx SoftwareTeradata AustraliaTibcoTibco Software AustraliaVolvo

Show Comments