Partnership evaluation to acquire high‑LTV cardholders: Home‑sharing (RH) vs Big‑box retailer

Context

C1, a credit‑card issuer, is considering marketing partnerships with:

• Rent‑a‑Home (RH), a home‑sharing platform, and
• A Costco‑like big‑box retailer, with the goal of attracting and growing high‑LTV cardholders.

Assume both partners can target their users with issuer‑funded or partner‑funded offers and can support randomized treatments. The issuer can track applications, approvals, activations, spend, and credit outcomes by MCC.

Tasks

1. Define "high value" quantitatively for this context (e.g., 12‑month net contribution after CAC and expected loss; 24‑month CLV). State your formulas and any assumptions.
2. List and justify the top factors to analyze before signing, including at minimum:
   • Audience overlap and incremental reach
   • Expected average spend and category mix
   • Interchange by MCC
   • Partner commission/revenue share
   • Promo mechanics (e.g., 30% off RH) and breakage
   • Cannibalization of existing spend
   • Approval/activation/usage funnels
   • Credit risk and expected loss
   • Fraud risk
   • Operational/servicing costs
   • Legal/regulatory constraints
3. Propose a measurement plan covering:
   • Primary KPI(s)
   • Guardrail metrics
   • Experiment design (randomized offer with holdout)
   • Sample size and power assumptions
   • How to detect and adverse‑select against “credit‑card gamers”
4. Specify the data needed, key segments to cut (e.g., new vs existing customers; peak vs off‑peak periods), and your go/no‑go thresholds (e.g., 12‑month payback and minimum IRR).