Case Study | Acquisition decision scorecard
| Sector | Mail Order |
|---|---|
| Products | cipher:marketing |
| Application | Marketing |
Our client, an on-approval mail order company, had introduced on-application credit screening to reduce their exposure to non-payment risk. To get a credit score, the client needed to ask the prospective customer for their date of birth on application. The product itself was not age specific, and so this request was seen as erroneous by potential buyers. Indeed, enquiry-to-conversion rates dipped significantly and were shown to be directly linked to the introduction of credit screening. Furthermore, the drop in conversions was not made up for by an equal reduction of first party fraud or non-payment.
Removing risk screening altogether simply wasn't an option because the client needed to reduce first party fraud and defaults.The business was looking for a an alternative solution to traditional credit bureaux, without increasing their risk exposure. This project tested replacing credit screening with Fraudscreen, which requires no more data than the customer would give to arrange delivery.
We worked with the client to develop a three level analysis, covering single dimension, correlation analysis and multi-dimension interplay. We then used this to develop a comprehensive decision tree of each identified customer type.
The results were immediate and sustained. One year one and the bad debt rate is now stabilised at 45% lower than pre-implementation and the acquisition rates are performing as well as they were before the introduction of risk screening.
