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Cut churn or buy more customers?

You run the case. Read the prompt, answer questions from the notes below, and share data only when the candidate asks for it or gets stuck. Score at the end.

Case timer

00:00

Target length:

1. Read the prompt aloud

Read it slowly, then pause. Let the candidate ask questions before they structure.

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.)

2. Answers to clarifying questions

This case has no scripted clarifying answers. Answer from the prompt, and say "assume what you think is reasonable" if the prompt does not cover it.

3. A model structure

Compare the candidate's structure with this one. A different split can be just as good if it is clean and fits the problem.

Settled customer base = new customers per month / monthly churn
- Base today and under each option
- Monthly contribution = base x SGD 36
- Key: Minus the cost of each option

4. The working, step by step

Each step shows how a strong candidate works it out. Share a new fact from it only when the candidate asks or is stuck, and let them do the math: the result in the dark box is what they should reach.

Step 1: Base today
What a strong candidate does: 10,000 new a month divided by 8 percent churn.
Settled base today (customers): 10,000 ÷ 0.08 = 125,000
Step 2: Contribution today
What a strong candidate does: 125,000 customers at SGD 36.
Monthly contribution today (SGD): 125,000 × 36 = 4,500,000
Step 3: Option A base
What a strong candidate does: 10,000 new a month at 6 percent churn.
Settled base with option A (customers): 10,000 ÷ 0.06 = 166,667
Step 4: Option A result
What a strong candidate does: Contribution minus SGD 200,000 a month.
Option A monthly result (SGD): 10,000 ÷ 0.06 × 36 - 200,000 = 5,800,000
Step 5: Option B base
What a strong candidate does: 12,500 new a month at 8 percent churn.
Settled base with option B (customers): 12,500 ÷ 0.08 = 156,250
Step 6: Option B cost
What a strong candidate does: 2,500 extra customers a month at SGD 150 each.
Option B monthly cost (SGD): 2,500 × 150 = 375,000
Step 7: Option B result
What a strong candidate does: Contribution minus the extra advertising.
Option B monthly result (SGD): 156,250 × 36 - 375,000 = 5,250,000

The recommendation to listen for

At the end, say: "The CEO walks in. What is your recommendation?"

The company should cut churn first: option A settles at about SGD 5.8 million a month after its cost, against SGD 5.25 million for option B and SGD 4.5 million today. First, cutting churn from 8 to 6 percent grows the settled base by a third, to about 166,700 customers, with no extra advertising. Second, the extra customers in option B cost SGD 375,000 a month, and the cohort table suggests newer customers are already leaving faster, so the real churn on them may be worse than 8 percent. The risk is that the first-month fixes do not cut churn as much as hoped. As a next step, test them on one month's cohort and compare its 3-month retention with the cohorts before.

Risks a strong answer names: The settled base takes many months to reach; the gap opens slowly; If extra advertising brings lower quality customers, option B is worse than shown.

Score the candidate

Score each criterion from 1 to 5. A 2 or a 4 sits between the descriptions.

This case has no exhibit. Score Exhibit reading on how the candidate used the data you gave them: did they pick out the number that matters and say what it means?

Structuring

1: No clear structure, or a memorized framework that does not fit the problem.
3: A sensible structure, but with some overlap, a gap, or no clear priority.
5: A structure built for this problem, with no overlap and no gaps, a stated hypothesis, and a clear first step.

Math

1: Frequent errors, no units, or needed heavy help to finish.
3: Right answers but slow or messy working, or one error caught late.
5: Accurate and clearly narrated, with units, a sense check, and what the number means.

Exhibit reading

1: Read the chart aloud without finding the number that matters.
3: Found the key number but gave only part of the so-what.
5: Pulled the right number quickly and said what it means for the case.

Synthesis

1: Summarized what was done, with no clear answer.
3: Gave an answer, but with weak reasons or no next step.
5: Answer first, then two or three reasons with numbers, the main risk, and next steps.

Communication

1: Hard to follow: long silences, no signposting.
3: Clear most of the time, with some rambling.
5: Calm and concise, signposted each step, and checked in with the interviewer.

Total

0 out of 25

Score all five criteria to see the band and the feedback template.