MAY 4 '00

		"Pavlovian Marketing" is data mining its way to pay dirt for Harrah's Casinos, reports Christina Binkley in The Wall Street Journal. It's called Pavlovian because the idea is to find the pitch that loosens purse-strings among the low-rolling 30 percent of gamblers who generate 80 percent of Harrah's revenues and nearly 100 percent of its profits! The targets are sometimes called "grazers" because of their steady habits, or perhaps a bit more reverently as "avid experienced players." Previously, the casino had concentrated on courting the high-rollers via high-end perks like free airplane tickets. Not profitable. The bolder, brighter Pavlovian approach started after Harrah's found itself swimming not only in red ink but also in "information they didn't know how to use," generated primarily via a "frequent gambler card" program. The cards didn't exactly have the intended effect of carrot-sticking gamblers to greater gambles, but they did collect "minutiae on gambler's habits" such as age, gender, favorite games "and which neighborhoods around the country produce the most lucrative customers." So Harrah's hired a Harvard Business School professor named Gary Loveman who, in collaboration with Booz-Allen consultant Richard Mirman, sliced, diced and tested the 16-million-gambler database to create "a vast mathematical model" that is now helping Harrah's drive each type of gambler to spend more money. In at least one case, a more modest offer yielded a more profitable result. Overall, the data mining led Harrah's to drop some expensive perks that weren't yielding satisfactory results. The data crunching is mixed with a "human" touch as well: "Telemarketers are trained to get customers to talk about their earlier casino experiences, and then to listen for trigger phrases such as "hotel room" or "steak dinner" to come up with the most alluring offer." The article also notes: "Harrah's stock price has risen quickly in recent weeks as investors have received news of the marketing results." Tim Manners, editor