Is it better for Wasoko to focus on acquiring new customers or increasing order frequency from existing ones?

Introduction

The trade-off question at hand is whether Wasoko should focus on acquiring new customers or increasing order frequency from existing ones. This scenario involves balancing growth strategies for an e-commerce platform in the African market. I'll analyze this trade-off by examining the product context, potential impacts, key metrics, and experimental approaches to inform a strategic recommendation.

Step 1

Clarifying Questions (3 minutes)

• Context: I'm thinking Wasoko is an e-commerce platform serving small retailers in Africa. Could you confirm if this is correct and provide any additional context about the company's current market position?

Why it matters: Understanding the business model and target audience is crucial for evaluating growth strategies. Expected answer: Confirmation of business model and details on market share or growth stage. Impact on approach: Would help tailor the analysis to Wasoko's specific market challenges and opportunities.

• Business Context: Based on the focus on customer acquisition vs. order frequency, I assume Wasoko operates on a transaction-based revenue model. Is this accurate, and are there any other significant revenue streams?

Why it matters: The revenue model directly impacts which growth strategy might be more effective. Expected answer: Confirmation of revenue model and potential additional income sources. Impact on approach: Would influence the weighting of metrics and potential trade-offs in the analysis.

• User Impact: I'm thinking there might be different segments within Wasoko's customer base. Can you share any insights on the current split between new and repeat customers, and their respective behaviors?

Why it matters: Understanding user segments helps in predicting the potential impact of each strategy. Expected answer: Breakdown of customer segments and their ordering patterns. Impact on approach: Would inform the targeting strategy and potential experiment design.

• Technical: Considering the focus on order frequency, I'm curious about the current technical capabilities for personalization and retention marketing. What systems are in place for these functions?

Why it matters: Technical infrastructure affects the feasibility and potential success of increasing order frequency. Expected answer: Overview of current CRM and marketing automation capabilities. Impact on approach: Would influence recommendations for implementing the chosen strategy.

• Resource: Given that we're considering two distinct strategies, I'm wondering about the current allocation of resources between acquisition and retention efforts. Could you provide an overview?

Why it matters: Understanding resource constraints helps in assessing the feasibility of each option. Expected answer: Current budget and team allocation for acquisition vs. retention. Impact on approach: Would guide recommendations on resource reallocation for the chosen strategy.