So unfortunately the win & the loss amount are still not taken into account here. Customers with low RPF scores may be ignored which actually can form the target audience for marketing promotions. Now low recency and high spending could be ranked lower similar to what we observed in a flat structure. So although RFM may be a good standard for the retail industry . now in a casino environment it still does not fit the bill.
Our research leads us to the development of two newly introduced parameters i.e. Bonusing & Discounting. So bonusing & discounting we call it that BD is added to RFM. So it will be the BD analysis. Now let’s look what is this BD analysis. Let me directly explain the difference between the RFM & BD combined.
Lets first consider the RFM analysis of tearing. Here , considered two players one in scenario A and the other in scenario B. In both the scenarios player A & player B have spent equal amount of 1000$ each. But player a loses to the casino and his feeling low, whereas player b has had a good day & wins. While running the tearing logic the casino will still consider the amount spent by both these players 1000$ each , and rank them equally.
So in this case both are on tier level 2. Now you can very easily understand the problem with retaining this player A, whereas if you now consider RFM plus bonusing discounting analysis, here the player who loses to the casino will be considered for an upgrade that will be based on his spent weight age. Hence there’s a probability that the player may get an upgrade to his tier. Similarly player B may just about manage to stick to his current tier. or even may be downgraded that shown here.
So now a word of caution here , please do not take these numbers at face value they have been demonstrated to simplify the understanding of bonusing & discounting. The actual process is bit more complex with percentage, weightages allocated to a per visit theo and total theo calculation. Now the greatest advantage of the BD system is an increase in your players retention & also encouraging the players to increase their spend.