Answered step by step
Verified Expert Solution
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
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
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started