The Harrah's Quandary: Will Bad Credit Change the Customer Experience?

One of my students recently asked if a past bankruptcy or negative credit report would likely impact their opportunity to get a job. They were concerned that as HR departments get inundated by more candidates that more eliminating factors would be put into place, such as a credit check. In today’s dreadful economy many people are having a hard time paying bills on time which in turn can lead to bad credit. The question was quickly turned on its head though to the following: Is large debt likely to force a shift in the ability of many organizations to acquire customers and maintain their customer experience goals? In short, what happens to your brand and to the customer experience when your financial problem is worse than the worst-case-scenario?

Today’s WSJ contained an article about Harrah’s (“Harrah’s Changes Its Game – Tough Times for Gambling, Large Debt Force Shifts”). Harrah’s is often mentioned in marketing and CRM type presentations for its branding around the customer experience. As mentioned in the article, “Harrah’s customers have been especially spoiled by perks they earn through a loyalty plan, called Total Rewards that is similar to airline frequent-flier programs.” The article stated Harrah’s “recently cut the hours at some of its casino VIP lounges, and even replaced plates full of hearty sandwiches with bruschetta and hummus. The moves riled Harrah’s middle-market customers, who are accustomed to getting the high-roller treatment in exchange for their loyalty. The changes were a small sign of larger problems at the nation’s biggest casino company.”

The question facing Harrah’s is becoming universal for marketers in today’s economic downturn. “How does an organization build their brand and create marketing buzz without spending cash?” The answer may be simple – it just can’t be done. The article went on to state that Harrah’s “is scrambling to cut costs where it can, laying off hundreds of employees, deferring development projects key to its growth plans, and trimming customer services.” When you decrease headcount and trim customer services the customer experience is bound to be impacted. Place your bets?