Should Attain prioritize expanding its rewards catalog to increase user engagement or focus on higher-margin gift card options to improve profitability?

Introduction

The trade-off we're examining today is whether Attain should prioritize expanding its rewards catalog to increase user engagement or focus on higher-margin gift card options to improve profitability. This scenario touches on the classic product management challenge of balancing user satisfaction with business sustainability. I'll approach this analysis by first clarifying key aspects of the situation, then diving into a structured evaluation of both options, considering their impacts on various stakeholders and metrics.

Step 1

Clarifying Questions (3 minutes)

• Context: Based on the current market dynamics, I'm thinking Attain might be facing increased competition. Could you provide some context on our market position and primary competitors?

Why it matters: Helps frame the urgency of our decision and potential competitive advantages. Expected answer: Attain is a top-3 player with increasing pressure from new entrants. Impact on approach: Would influence whether we prioritize short-term gains or long-term differentiation.

• Business Context: Considering our revenue model, I assume gift cards are a significant profit driver. Can you share what percentage of our revenue comes from gift card sales versus other sources?

Why it matters: Determines the financial impact of focusing on higher-margin gift cards. Expected answer: Gift cards contribute 60-70% of revenue. Impact on approach: A high percentage would justify prioritizing profitability over engagement.

• User Impact: I'm curious about our user segments. Do we have data on which user groups are most active in redeeming rewards versus those who primarily use gift cards?

Why it matters: Helps identify which user segments might be affected by each option. Expected answer: Frequent users prefer diverse rewards, while occasional users opt for gift cards. Impact on approach: Would inform targeted strategies for different user segments.

• Technical Feasibility: Expanding the rewards catalog likely requires integration with new partners. What's our current technical capacity for onboarding new reward options?

Why it matters: Assesses the feasibility and timeline for implementing catalog expansion. Expected answer: Current system can handle 20% increase in partners without major overhaul. Impact on approach: Would influence the scope and timeline of potential catalog expansion.

• Resource Allocation: Considering our current team structure, do we have dedicated resources for partner management and catalog curation?

Why it matters: Determines our ability to execute on catalog expansion effectively. Expected answer: Small team in place, would need to grow for significant expansion. Impact on approach: Might necessitate a phased approach or reallocation of resources.