Jackpot!

What You're WorthHumans, like dogs, respond to rewards.


A challenge: See if you can price a human being. Go ahead, don't be shy. If you're having trouble, ask the master himself, Gary Loveman — CEO of Harrah's Entertainment. If the reports are true — that Harrah's may try to take over Philadelphia's flailing Foxwoods Casino project — he should be in town soon enough.

"We know what every customer is worth. Think about that," Loveman boasts in the 2002 book Jackpot! Harrah's Winning Secrets for Customer Loyalty by Robert L. Shook ("Win a trip to Harrah's Las Vegas!" says a fake sticker on the cover).

Loveman isn't just some businessman — he's a kind of scientist, a technician of the human mind. With data and computers, Harrah's casinos can calculate exactly how and how much a gambler can be convinced to play longer, and to greater loss, than they might otherwise. In other words, to increase their value to the casino.

The principle is very simple: Humans, like dogs, respond to rewards. Harrah's treats its customers accordingly: "We would reward customers for spending in ways that added to their value," Loveman explained in a 2003 article for the Harvard Business Review. "If, for example, we discovered a customer who spends $1,000 a month ... hadn't visited us in three months, a letter or telephone call would invite him back. ... [A] certain percentage of our customers responded positively to offers of a steak dinner. ... We decided to make a point of routing our customers into three different lines. People who weren't card-carrying Harrah's members ... stood in lines; Platinum customers would stand in still shorter lines, and Diamond cardholders would rarely ever have to stand in line. ... [W]e watched as our customers did what they could to earn the higher-tiered cards."

Loveman mined the data deeper than that: When a player slows, computers alert floor managers to comp them a drink; players who've been losing might get free credit. "Ours is a push strategy," remarks Harrah's communications chief Gary Thompson in Jackpot!

Now and then, they might push a little too hard: Harrah's, like other casinos, has seen its share of bankrupt gamblers, lawsuits and suicides. But without those friendly little nudges, we just aren't worth as much.