Caesars Entertainment
The Challenge
By 2012, consumer spending habits in Las Vegas had changed. For the first time in history, gaming now accounted for less than 50% of overall revenue. Tourists were now spending more money on restaurants, entertainment, night clubs and retail.
I was the Vice President of Hospitality Marketing for Las Vegas at Caesars Entertainment, and we knew we had to reposition, and relaunch, our Total Rewards program. Historically, Total Rewards had been Caesars’ gaming-centric loyalty program, which offered consumers the opportunity to earn points based on their spending activity on property, and was the backbone for measuring customer worth. However, little incentive had been created for customers to leverage their Total Rewards membership beyond the gaming floor. We had limited data on the totality of customer spending and therefore a limited view on total customer worth.
How could we create an incentive for Total Rewards customers to use their Total Rewards card in non-gaming environments and drive incremental EBITDA?
The Solution
We leveraged a best practice from, of all places, the grocery store industry. We partnered with our Food and Beverage leaders and Enterprise Analytics teams across the city and created Total Rewards Pricing at 50 of our restaurants across Las Vegas.
Similar to the grocery store environment, customers would see two prices: Total Rewards Membership pricing and Non-member pricing. The current retail price became the Total Rewards price. A second pricing column was created for non-members, typically at a 10% increase from the Total Rewards price.
The Result
Prior to the introduction to Total Rewards Pricing, only 5% of Total Rewards users were swiping their card in our restaurants. Within 9 months of launch, that number jumped to 17%. What this allowed us to do, is partner with the database team and begin to reassess our customer reinvestment levels: essentially, creating a scenario where a $500 gaming customer (who also spent significantly in other areas) became more valuable than a $750 gaming customer (who spent minimally in other areas around the resort).
Additionally, the incremental non-member pricing among the 50 other restaurants drove approximately $9 million in incremental EBITA.