Should iKhokha invest in developing a loyalty program to increase customer retention or allocate resources to expanding our payment processing capabilities?

Introduction

The trade-off we're examining today is whether iKhokha should invest in developing a loyalty program to increase customer retention or allocate resources to expanding our payment processing capabilities. This decision is crucial for our growth strategy and customer satisfaction. I'll analyze both options, considering their impact on our business goals, user experience, and technical feasibility.

Step 1

Clarifying Questions (3 minutes)

• Based on our current market position, I'm thinking customer retention might be a pressing issue. Could you share our current churn rate and how it compares to industry standards?

Why it matters: Helps quantify the potential impact of a loyalty program Expected answer: Churn rate is slightly above industry average Impact on approach: Higher churn would prioritize the loyalty program option

• Considering our technical infrastructure, I'm assuming we have some room for expansion in our payment processing capabilities. What's our current transaction volume capacity, and how close are we to reaching it?

Why it matters: Determines the urgency of expanding payment processing Expected answer: Operating at 70-80% capacity Impact on approach: Near-capacity operation would favor expanding processing capabilities

• Looking at our user segments, I'm thinking certain groups might be more responsive to a loyalty program. Can you provide a breakdown of our customer base by transaction volume or frequency?

Why it matters: Helps tailor the loyalty program design if chosen Expected answer: Mix of high-volume merchants and smaller businesses Impact on approach: Would influence loyalty program structure and rewards

• Regarding our competitive landscape, I'm curious about our differentiators. What unique features or services do we currently offer compared to our main competitors?

Why it matters: Identifies areas where we can further strengthen our position Expected answer: Competitive pricing and local market expertise Impact on approach: Could inform which option better enhances our competitive edge

• Considering our long-term strategy, I'm wondering about our expansion plans. Are we looking to enter new markets or focus on deepening penetration in existing ones?

Why it matters: Aligns the decision with broader company goals Expected answer: Focus on existing markets with potential new market entry in 18-24 months Impact on approach: Could influence the priority of processing capabilities vs. customer retention