Evaluate merchant partnership for high-value customers

C1, a credit-card issuer, is weighing partnerships with a home-sharing platform called Rent-a-Home (RH) and big-box retailers similar to Costco in order to bring in high-LTV cardholders. Define “high value” in quantitative terms—for instance, 12-month net contribution after CAC and expected loss, or 24-month CLV. Identify and defend the main factors you would examine before signing: overlap and incremental reach, expected average spend and category mix, interchange by MCC, partner commission or revenue share, promotion mechanics (such as 30% off RH), cannibalization of existing spend, breakage, approval/activation/usage funnels, credit risk and expected loss, fraud risk, operational and servicing costs, and legal or regulatory constraints. Lay out a measurement plan covering primary KPI(s), guardrails, experiment design (a randomized offer with a holdout group), sample size and power assumptions, and how you would detect or adverse-select against “credit-card gamers.” State the data required, the key segments (new versus existing, peak versus off-peak), and your go/no-go thresholds (for example, payback within 12 months and a minimum IRR).

Overview: This question tests customer lifetime value modeling, marketing experiment design, acquisition economics, funnel and credit-risk analysis, fraud and operational-cost assessment, and measurement planning for partnership decisions.