Should WumDrop focus on acquiring new customers or increasing order frequency from our current user base?

Introduction

The key trade-off we're examining is whether WumDrop should focus on acquiring new customers or increasing order frequency from our current user base. This decision is critical for our growth strategy and resource allocation. I'll analyze this trade-off by considering our business context, user impact, technical feasibility, and resource constraints. My approach will involve clarifying the situation, identifying key metrics, designing experiments, and providing a data-driven recommendation.

Step 1

Clarifying Questions (3 minutes)

• Based on our current market position, I'm thinking we might be in a growth phase. Could you share our current market share and how it compares to our competitors?

Why it matters: Helps determine if we need to focus on market expansion or user retention Expected answer: We're a mid-sized player with room for growth Impact on approach: Higher market share might lean towards retention, lower towards acquisition

• Considering our revenue model, I assume we operate on a per-order basis. Is this correct, and are there any subscription or loyalty programs in place?

Why it matters: Influences the potential impact of increasing order frequency Expected answer: Per-order model with basic loyalty program Impact on approach: Strong loyalty program might favor frequency increase

• Looking at our user segments, I'm curious about our current customer satisfaction levels. Do we have recent NPS scores or customer feedback data?

Why it matters: Indicates potential for organic growth and word-of-mouth acquisition Expected answer: Moderate satisfaction with room for improvement Impact on approach: High satisfaction could support both strategies

• Regarding our technical capabilities, how scalable is our current infrastructure? Could it handle a significant increase in new users or order volume?

Why it matters: Determines if we have any technical constraints on growth Expected answer: Moderately scalable with some limitations Impact on approach: Limited scalability might favor order frequency increase

• Considering our resources, what's our current marketing budget allocation between acquisition and retention efforts?

Why it matters: Indicates current strategic focus and potential for reallocation Expected answer: 70% acquisition, 30% retention Impact on approach: Heavily skewed budget might suggest rebalancing