Harrah s Marketing Overview. February 2008

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1 Harrah s Marketing Overview February 2008

2 Total Rewards Overview Today s Discussion Segmentation, Campaign Management, Modeling and Analytics Other Personalized Touch Points New Channels 2

3 HET: The Leading National Player in Casino Entertainment 3

4 International Operations Nine casinos in the UK Two in Egypt One in South Africa One in Uruguay Planned Developments Bahamas Spain 4

5 Total Rewards Overview Total Rewards is the leading loyalty program in the gaming industry, and is accepted at nearly 40 casinos nationwide There are 40 million customers in the program, 8 million of which have been active in the last 12 months Across the company, more than 80% of our gaming revenue is tracked to a Total Rewards card 5

6 Total Rewards Elements Total Rewards and the underlying technology is key to our success -- enabling us to profitably recognize & reward Customers in differentiated ways National Distribution Key Features PLAY REWARDS/ RECOGNITION Acceptance: a Total Rewards Card can be used at any Harrah s owned property -- no matter where it was issued Portability: Cash and comps can be earned, tracked & redeemed at any location, regardless of origin Recognition: tiered card status leveraged across all Total Rewards brands Differentiation: Customers receive targeted offers and rewards based on their predicted and actual value and preferences Differentiated CRM 6

7 Total Rewards Timeline We continually evolve the program Winners Circle Total Gold Total Rewards TR2 Seven Stars Club Tier Benefits TR Portable Cash Profile Comps Reward Credits Tier Cards Base RC s Reward Catalog 4 th Tier Better benefits for Plt/Dia Winners Circle Integration Integrate Connection Card 7

8 Total Rewards Non Gaming Create a more compelling loyalty program that drives loyalty in gaming and non-gaming customers Dining Shows Shopping Nightclubs 8

9 Tracked Play Tracked Play has increased significantly 82.0% 80.0% 78.0% 76.0% 74.0% 75.7% 76.3% 77.4% 77.7% 76.6% 78.0% 80.4% 80.2% 80.1% 78.7% 79.2% 79.5% 78.9% 72.0% Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 9

10 Total Rewards Value Proposition 10

11 Cross Market Play Cross Market Play increased to a Record $2.26 Billion in

12 Service Differentiation Our Diamond and Seven Stars TR customers receive white-glove treatment on property Special Slot & Service Areas Private Lobbies & Lounges Preferred Hotel Check-in Expedited Lines Total Rewards Center Restaurants Cashier Special events & promos 12

13 Customer Satisfaction Program We receive more than 400K customer satisfaction surveys from our customers, providing feedback on a number of the key touch points on property The surveys are skewed toward Diamond customers and key result times The survey results are reviewed every week by Senior Management and property operators The survey scores drive Front-line quarterly bonus of up to $200 per person 25% of property bonus 10% of corporate bonus 13

14 Strategic Vision of Customer Journey Customize marketing and service interactions with guests (TR members and non) In a multitude of touch points, Visit Having a thorough understanding of their gaming and non-gaming purchase behavior, Stated and implied preferences Pre-Visit $$$ Post-Visit And targeted demographic attributes in order to engender more loyalty and increase the profitability of our assets 14

15 The Customer Journey: From Awareness to Loyalty Awareness Brand Trial Loyalty I Know I Understand & I Like I ll Take a Risk and Act I Commit 15

16 The Marketing Challenge: Grow the numbers that flow out of the funnel Awareness Brand Trial Loyalty 16

17 Total Rewards Based CRM in Action: Harrah s Closed Loop Marketing Gaming Behavior Predicted Actual Demographics Other Detail Trans Marketing Actions 17

18 CCM Approaches Brand, Type of Offers, Preferences, Demographics Pilot one contact management within a market; which brand to lead with BASIC CONTACT MANAGER + Unica/CCM Harrah s Customers Rio Customers Business Rules Including: Frequency, Play Level, Profit & Response Pilot two contact management within a property Calendar of Events S M T W T F S Events: A, B Events: A, B,C Events: B,C 18

19 Ethnic Marketing 19

20 World-Class Business Intelligence We have also established world-class reporting capabilities that enable us to evaluate key marketing and operational activities at a detailed level Confidential Financial Performance Customer Performance Products and Programs Performance Customer Satisfaction KBIs and Operating Scorecard Operations Review Reports Trend Reporting Customer Segment Performance Offer and Redemption Reporting Promotions and Channel analysis Product and Campaign Performance Test and Control Reporting Purchase Behavior Reporting Key CSA Metrics and Trends Labor and Operational Trends Focus Areas 20

21 Hotel Revenue Management Room Rate vs. Gaming Revenue Optimization $$$ Cash Room Rate ($ s) Retail Cash Customer Predicted Customer Value X $ VIP/AEP Casino Comp Customer Gaming Revenue 21

22 VIP Player Contact System 22

23 Our Web Vision To be the premier online gaming home for serious slot and table players and TR members providing them with the information they want and tools they need to manage their relationship with us To be the key online resource for the FIT exploring visits to our core destinations by showcasing the wide range of choices and amenities that the HET portfolio offers 23

24 Our goal is to extend our CRM expertise to realtime interactive channels Analytical CRM Interactive CRM Customer Activity Customer Activity Customized Direct Marketing Data analysis In-the-moment Marketing Real-time Rules History/ Pref. Current Play Inventory Via Multiple Channels Mobile, Slot Machine, PCS, Microsoft Surface 24

25 1. Integrate Historical and Current Data in Real-time EDW + Offers + SDS + CMS ADW Operational CRM 2. Develop Event Monitors and Real-Time Triggers Sandbox 3. Deliver Offer / Interaction to the gaming floor Active Data Warehouse Real-Time Information Customer History Current Play data TR Tier / VIP Code Available Offers Location, Other Real-time Business Rules Engine (HEARTs) Lucky/Unlucky triggers Approaching profile play VIP Interaction Alert (RTCM) Many others are possible Lucky Customer Luck Ambassador 25

26 Op CRM: VIVID / Total Touch 26

27 Ordering a Drink SAMPLE ONLY 27

28 Wireless / Mobile Wireless technology will play a pivotal role in maintaining HET s leadership position in CRM Efforts to-date have focused on: Operational CRM: using wireless applications and devices to better know and serve our customers Marketing: effectively and efficiently communicating with customers in a wirelessly networked world Wireless Gaming: preparing for the near-term regulatory environment that will allow wireless gaming on property in Nevada Evaluating multiple technologies including text messaging, WAP, Bluetooth, WiFi, and RFID 28

29 Conclusions CEO who is passionate about marketing & IT capabilities Bottom up education is critical as well Bring in people from the outside to offer a fresh perspective Added tremendous value to the companies we have acquired Data privacy is critically important 29

30 Next Steps Continue to create new and enhance existing capabilities More seamless integration across capabilities & channels Expand Operational CRM Mobile/Wireless integration Implement our capabilities in an international environment 30

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