Should Too Good To Go prioritize expanding its restaurant partnerships or focus on increasing user retention for existing customers?

Introduction

The trade-off between expanding restaurant partnerships and increasing user retention for Too Good To Go presents a critical strategic decision. This scenario involves balancing growth with customer loyalty in the food waste reduction app space. I'll analyze this trade-off by examining the product ecosystem, potential impacts, key metrics, and experimental approaches to inform a data-driven recommendation.

Step 1

Clarifying Questions (3 minutes)

• Context: Based on the current market conditions, I'm thinking Too Good To Go might be facing increased competition. Could you provide more context on our market position and growth trajectory?

Why it matters: Helps determine if expansion or retention is more critical for maintaining market leadership. Expected answer: Moderate growth, increasing competition in key markets. Impact on approach: Would influence whether to prioritize aggressive expansion or focus on strengthening existing user base.

• Business Context: Considering our revenue model, I assume we take a percentage of each transaction. Is this correct, and are there any other significant revenue streams?

Why it matters: Clarifies how expansion vs. retention directly impacts our bottom line. Expected answer: Confirmation of transaction-based model, possibly with additional revenue sources. Impact on approach: Would help quantify the financial impact of each strategy.

• User Impact: I'm curious about our user segments. Do we have data on which user groups contribute most to our revenue or have the highest retention rates?

Why it matters: Identifies which user segments to prioritize in retention efforts. Expected answer: Breakdown of user segments by value and retention rates. Impact on approach: Would guide targeted retention strategies for high-value segments.

• Technical: Regarding our platform's scalability, how easily can we onboard new restaurants without compromising user experience?

Why it matters: Assesses the feasibility and potential challenges of rapid expansion. Expected answer: Current onboarding process and any technical limitations. Impact on approach: Would influence the pace and scale of partnership expansion efforts.

• Resource: Can you share insights on our current team capacity and budget allocation between partnership acquisition and user retention initiatives?

Why it matters: Determines resource constraints and current priorities. Expected answer: Overview of team structure and budget distribution. Impact on approach: Would help align recommendation with available resources and organizational focus.