In some interesting news this week, American Expressed announced that it’s offering some of their customers $300 to shred up their credit cards:
http://uk.reuters.com/article/marketsNewsUS/idUKN2335219120090224
In an environment where many companies are fighting just to keep revenues flat, trimming your customer base may seem to be somewhat of an odd move but it’s really a great example of how a company can use business intelligence to proactively reduce its exposure to risk by:
1. Monitoring external or macro market conditions to better assess risk to business fundamentals; keeping a close eye on unemployment and default statistics in this instance.
2. Identifying pockets of risk by profiling and segmenting customers who are carrying high balances, slow on payments and starting to fall behind on other debt obligations as indicated by external credit reports.
3. Deploying strategies to reduce risk. In this case, offering customers with high risk profiles a $300 gift card incentive in exchange for paying off their balance by a certain date.
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