Direct Marketer of the Year: David Norton

Anyone wagering that David Norton would use the word “I” to describe any of his feelings about earning the title of Target Marketing magazine’s 2010 Direct Marketer of the Year just lost a bet.

David Norton, senior vice president and chief marketing officer, Harrah's Entertainment
David Norton, senior vice president and chief marketing officer, Harrah’s Entertainment

Anyone wagering that David Norton would use the word “I” to describe any of his feelings about earning the title of Target Marketing magazine’s 2010 Direct Marketer of the Year just lost a bet.

It’s as if the senior vice president and chief marketing officer of Las Vegas-based Harrah’s Entertainment repeatedly chanted mantras such as “It’s we, not I” and “There’s no ‘I’ in team” before taking the lead marketing position three years ago at the now 52-casino, $10 billion international gaming empire.

But no. Those who’ve known Norton throughout the dozen years he’s been with Harrah’s say he’s genuinely humble—despite being a major reason Harrah’s is known as a marketing superstar. Norton says this selfless, team-oriented attitude is one he looks for in others, as well. Otherwise, the marketing overhauls he advocates—including centralizing marketing analysis in April 2009, saving Harrah’s $15 million to $20 million in its first year; and becoming an almost pure-play direct marketing entity during the recession—might not yield the company as much profit.

“It’s a filter I have when I interview people,” Norton says. “It’s just that ego factor. We want smart, aggressive people who are proud and can challenge. But if there’s too much of an egomaniac factor, it’s just not going to work; both within my team and given they probably have to work with the properties. So we’ve got a couple of those at a time and it usually ends up in just a disaster, because they’re very smart and they have some short-term success. [But] long-term, it just doesn’t work.”

A fan of analytics, Norton’s advice to up-and-coming marketers does reveal his passion and why direct marketing’s been so much a part of his life for 20 years: “I think the key is to be comfortable in analytics. So [people] may get caught up a little bit in creative, and that’s important. But really understanding what’s working and what’s not at a program—at a customer segment level—and having a degree of comfort in analytics, I think is a key foundation … for a successful direct marketer.”

Know When to Hold `em
Harrah’s loyalty program continues to hit the jackpot.

“We track 80 percent of our gaming spend to someone using a Total Rewards card,” Norton says. “Always.”

At first called Total Gold, Harrah’s loyalty program began in 1997 and passed into Norton’s hands a few years after he joined the company in 1998. Having been renamed Total Rewards in 2000 upon the introduction of many improvements, such as tiered reward levels, Harrah’s CEO Gary Loveman tasked Norton with further enhancing the program. Loveman remembers Total Rewards II as an “enormously successful” fundamental relaunch of the program.

Since working on 2003’s Total Rewards II, Norton has led launches of two more versions of Total Rewards. Informed by database analytics, the June 2004 relaunch introduced a fourth tier to the rewards program that caters to the 0.15 percent of customers who contribute 12 percent of Harrah’s revenue.

The loyalty program’s database holds information on 9 million active customers and more than 40 million total casino-goers. Part of the reason loyalty card holders aren’t classified solely as gamblers is non-gaming spend now qualifies for rewards.

“I think that the program that David administers, Total Rewards, is central to the way we operate the company in a way unlike any other business I’m familiar with,” Loveman says. “And, accordingly, that program needs to get better routinely. So no matter how effective it is at a moment in time, I am always pushing David to make sure that it’s better and better as our competitors work hard to try to, in one way or another, emulate it.

“I think the place where I challenge David the most,” Loveman continues, “is to enhance the functionality of the program, the ubiquity of the program, the quality of the analytics that are generated by it, and, perhaps the most daunting of these, to make sure that all of our operating businesses—the 52 casinos we operate around the world—use the tools that David creates as well as they should be used. And that is probably the biggest challenge.”

Know When to Fold `em
While Norton doesn’t have a catchphrase, he does have a way of thinking about direct marketing. Analysis, he says, is what’s romantic about the process, and digging deeper to find out what motivates people provides the prize.

“Everybody can have an opinion,” Norton says. “But the beauty of direct marketing is we’ll know who was right.”

Putting this theory into practice, Norton advocated centralizing marketing analysis for Harrah’s properties during the throes of the Great Recession—a time when many businesses were keeping their cards close to the vest.

“We knew consumers were responding differently; that they just were not going to casinos at the same rate,” Norton says of the logic behind the bold April 2009 move. “And what we were trying to do at the property level was stimulate revenue, so we drove more and more at the guest. We figured not all of that was incremental, and maybe quite a bit wasn’t.

“So we knew we had to be much more effective with our direct marketing, and it was a significant amount of spend for us as a company; not only the production of it, but the offers that go out with the direct mail pieces,” Norton continues. “We had a pretty aggressive goal to save many, many millions of dollars. And we knew we had to take a little bit more centralized control, create more visibility.”

Before the change, marketing analysis at the property level only involved a one-click process. But marketers there—who were seeking answers from the local finance professional tasked with evaluating the reports—weren’t getting answers in timely fashion, or perhaps at all, Norton says.

A year into centralizing marketing analysis, Norton estimates Harrah’s saved $15 million to $20 million by eliminating incentives and offers that weren’t working. “Centralizing analysis was more efficient because it is more timely and we have the benefit of sharing knowledge across the enterprise more easily.”

Norton later adds: “We’ve made this very much a marketing company. So for better or worse, when performance isn’t there, people look to marketing. And when things are going pretty well, people look to marketing as well. So I think that’s a positive. It’s very much a marketing-centric company, which I’m proud of having helped build. So yeah, you want to be an important cog. You don’t want to be an afterthought, for sure.”

Having worked at several of the casinos, Brett Kline, Harrah’s vice president of VIP marketing, can testify that Norton’s accomplished that goal. “The marketing group is one that, I think, is highly respected and trusted and comes with a degree of credibility with those out around the company. And that has everything to do with David’s leadership and [that] he walks the talk.”

Know When to Walk Around
A long pause comes after Norton is asked, “What does your office look like?”

His first response is to describe the conference area where he meets with his team in Las Vegas. After that, he’s mainly describing hotel rooms, limousine interiors and casino floors. The casino floors are really his offices, he explains.

“That’s important; to get out there and work with the folks and also get to see the customers, as well,” Norton says. “I mean, that’s one of the other beauties of our industry, as well. As you walk the casino floor, you can actually see the customers out in the casino.”

His humble attitude conflated with a love of learning—as evidenced by his bachelor’s degree in finance, his master’s in business administration and his executive master’s degree in technology management from the University of Pennsylvania—mean Norton enjoys this hands-on approach. Seeing gamblers at the slot machines and betting at the tables helps him understand how to market to them.

“We’re a marketing company and we do a lot before the customer gets there,” Norton says. “But a lot of what we’ve done really impacts their visit, as well, to make that as customized as possible.”

So Norton’s always happy to see Total Rewards signs in the gaming area, as well as to visit each Total Rewards Center in casinos, where customers can sign up for the loyalty program.

“[Walking the casino floor is] something I’ve always done,” Norton says. “Because you can’t create something in a vacuum. And I think it’s especially important, coming from outside the industry when I started, that you have to have that credibility to go out there in the field.”

Norton arrived at Harrah’s in 1998 without experience in the casino business. However, he’d already spearheaded many initiatives to innovate credit card marketing when he worked for American Express, Household Credit Services and MBNA.

Starting out his career as a management development trainee in 1990, Norton’s first titled position was—not surprisingly—in analytics. As division analyst, he managed financial analysts and presented reports to senior management that emphasized direct marketing concepts like account activation and customer retention. Consequently, he moved on to hold the title of Customer Retention Manager, then became an assistant vice president and account activation manager. At that level, Norton’s efforts helped MBNA generate $250 million and grow his start-up department from seven to 50 employees in six months through outbound calls. (While in this position, Norton also organized the installation of a call management system.)

Leaving MBNA as a vice president of marketing in 1994, Norton took a position at Household Credit Services as balance building marketing manager and “generated nearly $600 million in receivables in 1995, exceeding [the] original plan by more than 300 percent,” according to his résumé.

In his last stint as a credit card marketer, Norton was the senior director of telemarketing capabilities for American Express from 1996 to 1998. Here, it seems, he began his habit of winning awards. In his résumé, Norton describes the project that earned him the American Express Chairman’s Quality Award as “a capability that links the company to its vendors and supports the strategy of daily dynamic name prioritization and facilitates the storage of marketing results in a consistent manner for analysis, targeting and model development.”

Finding Aces to Hold
Perhaps Norton’s early non-casino background explains why he avoids gaming-centric conferences when he’s trying to recruit marketing talent. Although it’s absent from his résumé, Norton’s a regular speaker at marketing conferences and has served as co-chairman of the Direct Marketing Association’s Travel & Hospitality Council in 2006-2007. He says this aspect of his work life is about more than giving back to his profession.

“I think everybody’s interested in our story; broadly around [customer relationship management] and direct marketing,” Norton says. “People are interested. So I think it’s good visibility for us, I think it helps on the recruiting side to win an award like this one or CMO of the Year, [awarded in May by the Chief Marketing Officer Institute].

“And we’re constantly trying to really nurture our own talent, but also bring in new talent,” he says. “[If] people say, ‘My God, this is one of the best marketing companies in the world; certainly one of the best direct marketing CRM loyalty companies in the world,’ then I think that’ll attract new talent. And then, I think, raising the bar helps everybody.”

That’s not to say Norton doesn’t spot marketing talent from within the organization. He met Kline seven years ago at an operating review for Harrah’s East Chicago, a casino in Indiana that’s no longer part of the company. Norton called Kline up six years ago to be part of his team.

“He’s a great mentor for me, personally,” Kline says. “He has unwavering … loyalty [for] folks that are hard-working and passionate and results-oriented, and that’s what comes to mind for me. And so I look at that and I have a lot of respect for him and for leaders that show that.

“He doesn’t micromanage; he’s the antithesis of micromanagement,” Kline continues. “He fully empowers one to do their job. … You learn how to get things done. And so, you have to develop a proactive, somewhat intuitive [skill set]. You have to take initiative and you can’t have that reliance that David’s going to solve all your problems for you. And so I think that’s good from a development perspective. It really teaches you how to get things done in a company of our size. And that you sometimes need to pick up the phone and call a divisional president and have a conversation with him. And I think that’s a good thing. So I think that … he empowers his team to work through challenging and complex situations, but to always know that he’s there to lend counsel and wisdom and to be a mentor to help you think through [problems]. I think that provides a tremendous amount of comfort for those that work closely with him.”

Know When to Run (Into the Future)
It’s a given that Norton’s job as CMO means that he will deal with more than direct marketing. But among the many job duties that require his leadership and management, the latest goes beyond marketing—he’s helping Harrah’s delve into direct sales.

Loveman says Norton is implementing Total Experiences, which is aimed at giving the well-marketed company “a true sales capability.” Total Experiences targets a customer segment that’s interested in high-end experiences for groups and special occasions.

“The core of our company is direct marketing, in terms of driving a significant portion of our revenue,” Norton says. “So we’ve organized a team where I think we manage it pretty well on a day-to-day basis. But as we evolve it, then I’ll be pretty involved to make sure that we’re pushing the envelope as much as we can.”

After all, Norton’s entire first year at Harrah’s revolved around direct marketing. And his favorite memory about direct marketing is what he and Loveman accomplished more than a decade ago.

“We originally, back in 1999, were able to roll out this new segmentation strategy,” Norton says. “So [I] came from financial services and Gary came from academia. And within a year, we had rolled out a whole different approach to a casino company that was pretty skeptical. That foundation is still in place, and we want to continue to push it and evolve it. But that foundation that we launched in August ’99 is still how we do marketing. And it’s the reason why we were able to go private and, hopefully, why we will be able to go public, whenever that happens.”

Harrah’s mainly adds higher levels of segmentation to those five core “shelf campaigns” that Norton helped create in 1999 with Dave Kowal, Harrah’s vice president of revenue management and analysis, whose team built the models and queries. Norton then worked with two properties to pilot the campaigns at the casinos. “It seemed to work and we rolled it out,” Norton says.

In the final analysis, when many businesses may be taking this time to regroup, Harrah’s is moving forward. And Norton brings a large part of that momentum.

He points to Harrah’s history to illustrate his point that during the 12 years he’s been with the company, it’s grown into a direct marketing company and expanded from 15 properties to 52.

“It’s been fun building something, and we’re doing as much new stuff this year as we ever have before,” Norton says. “So it’s harder, because we’re pretty great at marketing. But we’re challenging ourselves to get better and better. Whether it’s direct marketing where we’re world-class—we’ve got a big project to push that forward and Total Rewards and [a] variety of other things— … we’re not resting on our laurels. Partly because the world’s changed around us, but that makes it exciting.”

Sometimes Norton views his marketing career as a bit of a surprise. He knows he couldn’t have imagined this path while growing up with a father in banking and a mother in insurance.

“I definitely didn’t dream of being in a casino situation, for sure,” Norton says. “What I would say is I never expected to have as much fun and accomplish as much as I have or we have in these 12 years. When I left American Express to go to Harrah’s, who knew what it was going to be all about? And it’s certainly been a life-changer in so many positive ways. … It’s a good feeling.

“But, like I say,” he chuckles. “We’re busting our hump … to get better and better.”

Author: Heather Fletcher

Heather Fletcher is senior content editor with Target Marketing.

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