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Cut churn or buy more customers?
The prompt
The fictional meal kit company wins 10,000 new customers a month and loses 8 percent of its customers each month. Each customer brings SGD 36 of contribution a month. Option A: a better first month (free menu changes, a call from a chef) cuts churn to 6 percent and costs SGD 200,000 a month. Option B: more advertising raises new customers by 25 percent at a cost of SGD 150 for each extra customer. Which option earns more once the customer base settles? (Assume churn stays steady.)
Your interviewer will share data as you ask for it. Ask clarifying questions, state a hypothesis, then lay out your structure out loud before you calculate.
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