Should Huron prioritize expanding its body wash scent options to attract new customers or focus on improving the formula of existing bestsellers to boost customer retention?

Introduction

The trade-off we're examining today is whether Huron should prioritize expanding its body wash scent options to attract new customers or focus on improving the formula of existing bestsellers to boost customer retention. This scenario touches on key aspects of product strategy, including customer acquisition vs. retention, product line expansion, and resource allocation. I'll walk through a structured analysis to arrive at a data-driven recommendation.

Step 1

Clarifying Questions (3 minutes)

• Context: I'm thinking Huron is a direct-to-consumer personal care brand. Could you confirm if they have any retail presence or if it's purely e-commerce?

Why it matters: Impacts distribution strategy and customer acquisition channels Expected answer: Primarily D2C with limited retail partnerships Impact on approach: Would focus more on digital marketing and online customer experience

• Business Context: Based on the focus on bestsellers, I assume Huron follows a 80/20 rule where a few products drive most revenue. Can you share the revenue split between top products and the rest of the catalog?

Why it matters: Helps understand the potential impact of improving bestsellers vs. expanding options Expected answer: Top 3-5 products account for 60-70% of revenue Impact on approach: Would lean towards improving bestsellers if they're crucial to the business

• User Impact: I'm thinking there might be distinct customer segments with different preferences. Do we have data on customer personas and their buying behaviors?

Why it matters: Helps tailor strategy to specific user needs and preferences Expected answer: Yes, we have 2-3 main customer personas with different product preferences Impact on approach: Would consider persona-specific strategies for retention and acquisition

• Technical: Regarding formula improvement, I'm curious about our R&D capabilities. Do we have in-house labs or rely on third-party manufacturers?

Why it matters: Affects feasibility and timeline of product improvements Expected answer: Mix of in-house R&D with some outsourced manufacturing Impact on approach: Would factor in development timelines and costs for formula improvements

• Resource: Considering both options require different skill sets, how flexible is our team structure? Can we easily reallocate resources between product development and marketing?

Why it matters: Impacts our ability to execute on either strategy effectively Expected answer: Some flexibility, but core teams are specialized Impact on approach: Would need to consider hiring or training needs for chosen strategy