David Norton

Senior Vice President and Chief Marketing Officer, Harrah's Entertainment

Harrah’s Total Rewards program has become the gold standard for player rating systems in the industry. With its complete data-sifting characteristics and Harrah’s network of properties, Total Rewards has created a unique brand of loyalty among customers. Now, a new program that incorporates non-gaming spend into traditional gaming ratings has raised the bar. Chief Marketing Officer David Norton explains how the system will be implemented and what it might mean for his company and his customers. He spoke with Global Gaming Business Publisher Roger Gros and Editor Frank Legato at Harrah’s corporate offices in Las Vegas in September. To hear a full version of this podcast, go to www.ggbmagazine.com and click on the GGB Podcast button.

GGB: Total Rewards has allowed Harrah’s to market to its
customers and really create relationships between them and all the company’s properties. Tell us how this new initiative will expand the reach of Total Rewards.
Norton: We recently launched a non-gaming version of Total Rewards. It
recognizes the non-gaming spend from all our Total Reward members. Obviously it should work well in Las Vegas and Atlantic City, but it can also be used at Horseshoe Hammond and other properties that have big non-gaming amenities.

We’re trying to attract a broader audience, people who might like to game a little bit but are coming for other reasons: a good meal, a great room, spa treatment or whatever. Now, our program is relevant to them. We’ll track all their activities and they’ll be able to earn great rewards. This will allow us to be able to market to them more effectively beyond gaming because we’ll know intuitively what they like.


Why bother with non-gaming purchases? Has the ratio of gaming spend to non-gaming spend become that important?
We’ve done a lot of research and analysis on this, and we’re confident it will pay off. In Vegas, of course, the ratio of non-gaming to gaming revenue is much greater. Across the company, 20 percent to 25 percent of our revenue is non-gaming. It’s been growing at a good clip and has become a big part of our strategy in all our markets to attract this audience.

For the customer, it’s one account. If they decide to throw some money down on the games or spend it in other parts of the hotel, they get credit for everything on one account. It’s a lot of value for the customer and for us too.


Does this apply to all non-gaming buys: hotel rooms, show tickets, spa treatments, hotel retail outlets, restaurants, etc.?
Yes, with one caveat. The leased outlets are not included in the program at this time, such as the Forum Shops or the Pier at Caesars. But anything on property, we’re going to credit your Total Rewards account for purchases.

How about your smaller casinos in the heartland? Is there as much of a non-gaming element there?
It certainly depends on the property. But each property has something. For example, the Horseshoe Council Bluffs with its Whiskey Bar where they have concerts. Their buffet is something special and most properties have things like that. But clearly the gaming revenues outweigh non-gaming pretty dramatically in this region. But it’s still a reasonable share of the business and it will grow.

This program has a pretty simple formula: customers will get one point for every dollar spent in non-gaming outlets. How do you reconcile that with the widely differing profit margins in restaurants, retail, and so forth?
There was a lot of discussion internally about this before we reached our final decision. You are right. The profit margins vary quite dramatically depending upon the outlet. We felt like getting customers to understand the concept of tying rewards to profitability was not worth the effort. We felt that one point for every dollar was much easier to communicate for both customers and employees, and was parallel to our membership awards where you get a point for every dollar spent. It’s not perfect on the profitability side, but we feel the upside outweighed it.

Might this program encourage the development of non-gaming amenities in other properties to capture that revenue and marketing ability?
It could spur it on, especially in the Midwest. But the network effect of building loyalty, not only in the home market, but when they come to Las Vegas or Atlantic City for their once-a-year excursion will be enhanced.

Are these non-gaming and gaming ratings going to be merged together so you have a better idea of the customer’s value?
At the deepest level, yes. We will know the customer’s profitability to a much greater extent. For example, you could have two $50 average-bet gamblers.
One would spend $1,000 on the hotel, spa, shopping etc., while the other would spend $100. In the past, we would have treated them both the same. Inherently we will now know the true value of the customer and reward them appropriately. Exactly how we execute our marketing plans will be refined and evolve as we go along.

There’s a whole range of possibilities and we have to determine what is the biggest motivator for specific customers or groups of customers. The idea is to be relevant to them so we can target very closely what motivates them.


Is this an internally developed program for Harrah’s? Did you use any outside vendors?
From a strategic marketing perspective, no, it was all done internally. We worked with Leo Burnett on the creative that really will bring this campaign to life.

I was very passionate about this program, as was Gary Loveman. We had a lot of debate and discussion internally. We did some tests in Las Vegas late last year and launched it in Tahoe in July, which was more of a technical test than anything. We’re convinced this is the right thing to do.


How does it work on the technology side? Do you need separate card swipes at each point of sale?

Yes, we capture the data at each POS terminal. They must present their Total Rewards card in addition to a credit card or cash, so it is one more step. Then the information feeds into the data warehouse. And when it’s fed into the data warehouse, we do the calculations about profitability, but still reward the one point for each dollar spent.

The biggest challenge is the amount of data coming into the system. It took a lot of time to get the data to flow accurately and to figure out how to handle it effectively.


Can you see this program someday being introduced into the leased properties at the Pier or the Forum Shops?
With Total Rewards, we’re capturing so much data, we have to be respectful of the customer’s information, so I’m not sure if that would work.

We’re cognizant that there may be some confusion at the Forum Shops, for instance, so we’ve developed some signage that we can put in front of company-owned shops saying ?Earn and Redeem Here.?


Several years ago at the Pier, we offered up the Total Rewards Gift Card through Discover, which allows members to redeem points at Pier shops. That amounts to several hundred thousand dollars a month. Guests who redeem these gift cards can go to any of the shops or restaurants and get quick rewards. We’re doing this now at the Forum Shops, as well. There’s a lot of value for the customer and for the entities in these shopping areas.


Down the road, we’ll definitely tackle ways to earn points at these stores, but we want to get this up and running before we do that. It will be a much more complex process, but not insurmountable.


Are you going to rate people who don’t gamble at all?

Yes, that’s part of the incentive for this program. It comes down to execution at each property, but hopefully when you check in, we encourage membership in Total Rewards. Even if you don’t gamble, this program is relevant for that person too. When we start with the big promotions to support this new program, it will become even more obvious why you have to become a member.

We saw a demonstration from Microsoft at last year’s G2E, which focused on a very extensive and complicated relationship program. Is this part of that plan?
We launched Microsoft Surface at the I-Bar at the Rio recently, which is part of this relationship-building program. At this time, these two things are totally separate, but there could certainly be some linkage in the future. There could be a system where you could put your card on the table and it magically gets swiped when you order a drink. There are ways to integrate this, for sure. We want to test as many things as possible so that eventually we can offer the customer a complete, seamless and easy-to-understand package.

Is this advanced technology?the kinds of things that younger people are very comfortable with, texting, sharing videos, etc.?the element you think will shape Total Rewards in years to come?
We envision people being able to interact through Total Rewards whether they are at our 300-plus acres in Las Vegas or a smaller riverboat property in the Midwest. There are many more compelling and innovative ways we can utilize Total Rewards than simply sliding it into a slot machine or swiping in at one of our retail outlets. We can make it more mobile and part of the experience. I think this will happen. When it happens and how it happens is still to be determined.