Consumer Credit
How did Cofidis evolve to be a success? Have its segmentation, targeting and positioning efforts contributed to this.
Answer.
Cofidis is an offspring of leading French direct marketer 3 Suisses international. Before 1981, 3 Suisses offered its customers a payment card managed by Cetelem. That was used for 12% of catalog sales. However, unless 3 Suisses agreed to pay Cetelem FF 5 million per year, new restrictive credit regulations in France were forcing Cetelem to withdraw in 1981. 1n 1982 after two unsuccessful attempts at accruing a small bank, 3 Suisses international decided to create an independent credit company called Cofidis.
Cofidis was already profitable in 1983 and in 1986, Cofidis went beyond the store credit card business and introduced Libravou. It consisted of a cash reserve that customers could use to buy what they wanted, when they wanted, without any justification. The reserve could be used in part or completely, with no charged involved when not used, similar to bank overdraft facility. Libravou had an advantage over home equity loans as it was an unsecured loan and it needed no customer asset for collateral. Pre-determined monthly payment was partly used to re-fill the reserve whenever customers used Libravou. The credit line was granted for one year, automatically renewable in the absence of any incident.
The Libravou reserve came in various amounts, from FF 5000 to FF 25000. The monthly payment was chosen by the customer to be either FF 150 or FF 200 per FF 5000 slice of reserve.
Applying for Libravou was meant to be simple. It could be done over the phone (between 8 am and 9pm, Monday through Saturday), by mail, or online. The questionnaire to get the load requested information on family situation (marital status, dependents, government allocations received, pensions received and given), housing (owner vs. renter, at what cost, since when), work situation, income, and current debt situation. It took only seven minutes to setup the
Answer.
Cofidis is an offspring of leading French direct marketer 3 Suisses international. Before 1981, 3 Suisses offered its customers a payment card managed by Cetelem. That was used for 12% of catalog sales. However, unless 3 Suisses agreed to pay Cetelem FF 5 million per year, new restrictive credit regulations in France were forcing Cetelem to withdraw in 1981. 1n 1982 after two unsuccessful attempts at accruing a small bank, 3 Suisses international decided to create an independent credit company called Cofidis.
Cofidis was already profitable in 1983 and in 1986, Cofidis went beyond the store credit card business and introduced Libravou. It consisted of a cash reserve that customers could use to buy what they wanted, when they wanted, without any justification. The reserve could be used in part or completely, with no charged involved when not used, similar to bank overdraft facility. Libravou had an advantage over home equity loans as it was an unsecured loan and it needed no customer asset for collateral. Pre-determined monthly payment was partly used to re-fill the reserve whenever customers used Libravou. The credit line was granted for one year, automatically renewable in the absence of any incident.
The Libravou reserve came in various amounts, from FF 5000 to FF 25000. The monthly payment was chosen by the customer to be either FF 150 or FF 200 per FF 5000 slice of reserve.
Applying for Libravou was meant to be simple. It could be done over the phone (between 8 am and 9pm, Monday through Saturday), by mail, or online. The questionnaire to get the load requested information on family situation (marital status, dependents, government allocations received, pensions received and given), housing (owner vs. renter, at what cost, since when), work situation, income, and current debt situation. It took only seven minutes to setup the