You are the co-founder of a nascent e-commerce business. The revenue has declined 5% w-o-w. What do you think is the reason?
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Clarifying Questions:
- How sudden or gradual is this drop in revenue? Over what time period did it occur?
- Has there been a change in other other metrics such as:
- Checkout cart conversion rate.
- Account creation conversion rate (assuming its seperate from the checkout conversion rate).
- Average number of products added to the cart.
- Average cart value in USD.
- Total number of views for particular products (by day, week, or month).
- DAU, WAU, MAU?
- Total number of purchases (by day, week, month).
- Retention (percentage of users completeing a purchase and then returning to complete another one within x number of days).
Segment data to narrow down:
- I would segment the revenue chart by different properties such as region, product sku number, operating system, and payment method. I would look for any patterns here that may give me a clue about where to look next.
Check For Data Errors:
- Assuming none of the previous questions or data segmentation gave me any hints, I would continue with the analysis.
- I would check to see if there are any errors with the data as this is common occurance in a lot of software companies.
- If there is a CDP such as segment or mparticle, I would view the livestream data and search for events that are being used to chart the given metric to ensure that this events are firing correctly.
- I would also check to see if the relevent events are being filtered from any downstream systems.
Check server status:
- Continuing I would check to see if there have been any server down incidents lately that coincide with the drop in revenue.
Check For External Factors:
- I would check for any bad PR online, new competing companies, or new product/feature releases from competitors.
Check release schedule:
- Has there been any recent updates to the website that coincide with the drop in revenue?
- If so, I would smoketest the website myself to see if there are any bugs or problems with the user experience.
Prevention:
- The prevention aspect would depend on what exactly the issue was.
- Depending on the interviewers response to the previous points I discussed, I would outline a plan here to prevent the problem from happening in the future.
- I may also mention a specific A/B test I would run to fix the problem if applicable.
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