Why has the average transaction value for Divvy (Draper)'s corporate credit cards decreased by 20% compared to the same period last year?

Introduction

The 20% decrease in average transaction value for Divvy's corporate credit cards compared to last year is a significant issue that requires thorough investigation. I'll approach this problem systematically, focusing on identifying potential root causes, validating hypotheses, and developing both short-term and long-term solutions.

Step 1

Clarifying Questions (3 minutes)

• Looking at the timing, I'm thinking there might be seasonal factors at play. Has this decrease been consistent throughout the year, or is it more pronounced in certain months?

Why it matters: Seasonal patterns could indicate external factors rather than product issues. Expected answer: The decrease has been relatively consistent. Impact on approach: If consistent, we'll focus more on product and user behavior changes.

• Considering user segments, I'm wondering if this decrease is uniform across all customer types. Have you noticed any differences in transaction value changes between small businesses and larger corporations?

Why it matters: Different impacts on user segments could point to specific product features or market conditions affecting certain groups. Expected answer: The decrease is more pronounced among small businesses. Impact on approach: We'd focus on features and market conditions particularly relevant to small businesses.

• Thinking about recent changes, have there been any significant updates to the product, pricing model, or card limits in the past year?

Why it matters: Product changes could directly impact user behavior and transaction values. Expected answer: A new feature allowing more granular spending controls was introduced. Impact on approach: We'd investigate how this feature might be influencing spending patterns.

• Considering market dynamics, has there been any notable shift in competitor offerings or marketing strategies in the past year?

Why it matters: Changes in the competitive landscape could be driving users to alter their spending habits. Expected answer: A major competitor introduced a new cashback program. Impact on approach: We'd analyze how this might be affecting user preferences and spending patterns.