Should Neo Financial prioritize expanding its credit card rewards program to attract new users or focus on increasing interest rates for savings accounts to improve profitability?

Introduction

The trade-off we're examining today is whether Neo Financial should prioritize expanding its credit card rewards program to attract new users or focus on increasing interest rates for savings accounts to improve profitability. This scenario touches on the classic product management challenge of balancing user acquisition with revenue generation. I'll analyze this trade-off by considering the business context, user impact, technical feasibility, and strategic implications for Neo Financial.

Step 1

Clarifying Questions (3 minutes)

• Business Context: I'm thinking Neo Financial's current growth stage might influence this decision. Could you share where we are in terms of user base size and revenue targets?

Why it matters: Helps determine if we should prioritize growth or profitability Expected answer: Early growth stage, focusing on user acquisition Impact on approach: Would lean towards expanding the rewards program if growth is the priority

• User Impact: Based on our user demographics, I'm assuming our target market is millennials and Gen Z. Is this accurate, and do we have data on their preferences between rewards and high-interest savings?

Why it matters: Aligns product strategy with user needs and behaviors Expected answer: Younger demographic values immediate rewards over long-term savings Impact on approach: Might favor expanding rewards program if this is true

• Technical Feasibility: Considering our current tech stack, I'm wondering about the complexity of implementing either option. How much development effort would each require?

Why it matters: Ensures we can execute the chosen strategy effectively Expected answer: Rewards program expansion is more complex but feasible Impact on approach: Would need to factor in development time and resources

• Resource Allocation: Given our current team structure, I'm curious about our capacity to handle either initiative. Do we have dedicated teams for both credit card and savings products?

Why it matters: Determines if we can pursue both options simultaneously or need to choose Expected answer: Limited resources, need to focus on one initiative Impact on approach: Would need to prioritize based on expected impact and resource availability

• Timeline and Urgency: Considering market conditions, I'm thinking about the urgency of this decision. Is there a specific timeline we're working with, perhaps due to competitive pressures?

Why it matters: Influences the speed of implementation and testing Expected answer: Increasing competition in fintech space, need to move quickly Impact on approach: Might favor the option that can be implemented and show results faster