Should Traveloka allocate more resources to developing new travel products or enhancing our loyalty program to increase customer retention?

Introduction

The trade-off we're examining today is whether Traveloka should allocate more resources to developing new travel products or enhancing our loyalty program to increase customer retention. This decision is crucial for Traveloka's growth strategy and long-term success in the competitive travel industry. I'll analyze this trade-off by considering various factors including business context, user impact, technical feasibility, and resource allocation.

Step 1

Clarifying Questions (3 minutes)

• Based on our current market position, I'm thinking we might be facing increased competition. Could you share insights on our market share trends over the past year?

Why it matters: Helps determine if we need to focus on acquisition or retention Expected answer: Slight decline in market share Impact on approach: Would lean towards enhancing loyalty program if market share is declining

• Considering our revenue model, I assume we operate on a commission-based structure. What percentage of our revenue comes from repeat customers versus new acquisitions?

Why it matters: Indicates the potential impact of improving customer retention Expected answer: 60% from repeat customers, 40% from new acquisitions Impact on approach: Higher repeat customer revenue would justify loyalty program investment

• Looking at user behavior, I'm curious about our current customer churn rate. Can you provide insights on our monthly churn percentage?

Why it matters: Helps quantify the retention problem we're trying to solve Expected answer: 5-7% monthly churn rate Impact on approach: High churn rate would prioritize loyalty program enhancement

• Regarding technical feasibility, what's the current state of our loyalty program infrastructure? Is it easily scalable or would significant development be required?

Why it matters: Determines the level of investment needed for loyalty program enhancement Expected answer: Moderate scalability, some development required Impact on approach: Easy scalability would favor loyalty program enhancement

• Considering resource allocation, what's our current split between new product development and loyalty program maintenance?

Why it matters: Helps understand the potential for reallocation Expected answer: 70% new products, 30% loyalty program Impact on approach: A high imbalance might suggest room for shifting resources to loyalty