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Product Management Root Cause Analysis Question: Investigating customer retention drop for Wasoko's cooking oil product

Why has Wasoko's customer retention rate for first-time buyers of cooking oil decreased from 60% to 40% this quarter?

Data Analysis Problem-Solving Strategic Thinking E-commerce FMCG Retail
E-Commerce Data Analysis Customer Retention Root Cause Analysis FMCG

Introduction

Wasoko's customer retention rate for first-time cooking oil buyers has dropped from 60% to 40% this quarter, signaling a significant issue in our product strategy. To address this problem, I'll employ a systematic approach to identify, validate, and resolve the root cause while considering both immediate and long-term implications for our business.

Framework overview

This analysis follows a structured approach covering issue identification, hypothesis generation, validation, and solution development.

Step 1

Clarifying Questions (3 minutes)

  • Looking at the timing, I'm thinking there might be seasonal factors at play. Has there been any significant change in cooking oil demand or consumption patterns in the past quarter?

Why it matters: Seasonal variations could explain the retention drop without indicating a deeper product issue. Expected answer: No significant seasonal changes observed. Impact on approach: If seasonal, we'd focus on adapting our strategy to cyclical demand.

  • Considering our user segments, I'm curious about the demographics. Has there been any shift in the types of customers making first-time purchases this quarter?

Why it matters: Changes in customer demographics could indicate a misalignment between our product and new user needs. Expected answer: Some increase in younger, urban customers. Impact on approach: If confirmed, we'd need to reassess our product-market fit for this new segment.

  • Thinking about recent changes, have we made any modifications to our cooking oil product, pricing, or delivery process in the last quarter?

Why it matters: Internal changes could directly impact customer satisfaction and retention. Expected answer: Minor packaging changes implemented. Impact on approach: If changes are confirmed, we'd need to evaluate their impact on user experience.

  • Regarding market dynamics, has there been any significant movement from competitors in terms of pricing or product offerings?

Why it matters: Competitive pressures could be drawing customers away after their initial purchase. Expected answer: One major competitor launched a promotional campaign. Impact on approach: If competitive factors are significant, we'd need to reassess our value proposition.

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