How can Chegg balance offering affordable subscription plans while maintaining high-quality expert answers?

Introduction

Balancing affordable subscription plans with high-quality expert answers is a critical trade-off for Chegg's product strategy. This scenario involves managing user expectations, maintaining content quality, and ensuring financial sustainability. I'll address this challenge by analyzing the trade-off, proposing metrics, designing experiments, and providing a data-driven recommendation.

Step 1

Clarifying Questions (3 minutes)

• Context: I'm assuming Chegg is facing pressure to increase affordability while maintaining quality. Could you provide more context on what's driving this need for balance?

Why it matters: Helps understand the urgency and scope of the problem Expected answer: Competitive pressure or user churn due to pricing Impact on approach: Would influence the aggressiveness of pricing strategies

• Business Context: Based on Chegg's subscription model, I'm thinking revenue per user is a key metric. How does the current pricing structure align with our profit margins?

Why it matters: Determines the flexibility we have in adjusting pricing Expected answer: Healthy margins, but pressure to improve accessibility Impact on approach: Would inform the extent of potential price reductions

• User Impact: I'm considering the different user segments Chegg serves. Can you share insights on how price sensitivity varies across these segments?

Why it matters: Helps tailor solutions to specific user needs Expected answer: Higher price sensitivity among undergrad students Impact on approach: Might lead to segment-specific pricing strategies

• Technical: Considering the need for high-quality answers, I'm curious about our current content creation and moderation processes. How scalable are these systems?

Why it matters: Determines our ability to maintain quality while potentially increasing volume Expected answer: Some automation in place, but still reliant on human experts Impact on approach: Would influence strategies for maintaining quality at scale

• Resource: Given the potential need for enhanced quality control, I'm wondering about our current expert network. Do we have the capacity to expand or improve this network?

Why it matters: Affects our ability to maintain or improve answer quality Expected answer: Some capacity to expand, but concerns about cost Impact on approach: Would impact strategies for balancing quality and cost