Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Excel Tables below: HF structure Profit margin (= profit / box_price) 25% Cohort Initial size (week 1) 1,000 Retention see breakdown Av. order value $102

image text in transcribed

Excel Tables below:

HF structure
Profit margin (= profit / box_price) 25%
Cohort
Initial size (week 1) 1,000
Retention see breakdown
Av. order value $102
Discounts see breakdown
Additional acquisition cost (at week 1) $65
Breakdown - Discount offer and retention assumptions
week discount cohort retention (=number of customers ordering a box as a % of previous week)
1 50%
2 0.9
3 0.89
4 0.89
5 50% 0.95
6 0.82
7 0.89
8 0.84
9 0.82
10 20% 0.93
11 0.84
12 0.92
13 0.4
14 1.5
15 0.9
16 0.78
17 0.78
18 0.92
19 0.89
20 0.88
21 0.87
22 0.78
23 0.9
24 0.92
25 0.78
26 0.8
27 0.89
28 0.84
29 0.89
30 0.84
31 0.86
32 0.81
33 0.9
34 0.81
35 0.82
36 0.83
37 0.85
38 0.84
39 0.81
40 0.86
41 0.91
42 0.79
43 0.84
44 0.88
45 0.87
46 0.89
47 0.78
48 0.8
49 0.85
50 0.87
51 0.92
52 0.89

1. Understanding data a. On top of the discounts offered on boxes 1,5,10, the model includes additional acquisition costs (\$65). Please list examples of what this may include for Hellofresh. b. In the attached data table, retention_week_14 =1.5. Please give an example of a situation where the cohort retention would logically drop and rebound within a few weeks. 2. Computing profitability a. How many boxes should a customer order to turn profitable? b. After how many weeks is a cohort profitable? c. What % increase in retention (added as percentage points) do I need to justify an additional acquisition costs 1.5x as large ($651.5x). d. Suppose we have the possibility to acquire 10% customers or increase our retention by x%. What's the equivalent uplift in retention to get as many boxes? (i.e. what is x ?). e. Our goal is to maximize cohort added value by incentivizing loyalty. Give an alternative discount structure that we could implement. Please list your assumptions clearly. 1. Understanding data a. On top of the discounts offered on boxes 1,5,10, the model includes additional acquisition costs (\$65). Please list examples of what this may include for Hellofresh. b. In the attached data table, retention_week_14 =1.5. Please give an example of a situation where the cohort retention would logically drop and rebound within a few weeks. 2. Computing profitability a. How many boxes should a customer order to turn profitable? b. After how many weeks is a cohort profitable? c. What % increase in retention (added as percentage points) do I need to justify an additional acquisition costs 1.5x as large ($651.5x). d. Suppose we have the possibility to acquire 10% customers or increase our retention by x%. What's the equivalent uplift in retention to get as many boxes? (i.e. what is x ?). e. Our goal is to maximize cohort added value by incentivizing loyalty. Give an alternative discount structure that we could implement. Please list your assumptions clearly

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Contemporary Financial Management Fundamentals

Authors: R. Charles Moyer, James R. McGuigan, Ramesh P. Rao

1st Edition

0324015771, 9780324015775

More Books

Students also viewed these Finance questions

Question

What are the important facts related to this situation?

Answered: 1 week ago