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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:

  1. How sudden or gradual is this drop in revenue? Over what time period did it occur?
  2. Has there been a change in other other metrics such as:
    1. Checkout cart conversion rate.
    2. Account creation conversion rate (assuming its seperate from the checkout conversion rate).
    3. Average number of products added to the cart.
    4. Average cart value in USD.
    5. Total number of views for particular products (by day, week, or month).
    6. DAU, WAU, MAU?
    7. Total number of purchases (by day, week, month).
    8. Retention (percentage of users completeing a purchase and then returning to complete another one within x number of days).
Segment data to narrow down:
  1. 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:
  1. Assuming none of the previous questions or data segmentation gave me any hints, I would continue with the analysis. 
  2. I would check to see if there are any errors with the data as this is common occurance in a lot of software companies.
    1. 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.
    2. I would also check to see if the relevent events are being filtered from any downstream systems.
Check server status:
  1. 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:
  1. I would check for any bad PR online, new competing companies, or new product/feature releases from competitors. 
Check release schedule:
  1. Has there been any recent updates to the website that coincide with the drop in revenue?
  2. If so, I would smoketest the website myself to see if there are any bugs or problems with the user experience.
Prevention:
  1. The prevention aspect would depend on what exactly the issue was.
  2. 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.
  3. I may also mention a specific A/B test I would run to fix the problem if applicable.
 
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Get access to 2,346 pm interview questions and answers to give yourself a strong edge against other candidates that are interviewing for the same position
Get access to over 238 hours of video material containing an interview prep course, recorded mock interviews by expert PMs, group practice sessions, and QAs with expert PMs
Boost your confidence in PM interviews by attending peer to peer mock interview practices, group practices, and QA sessions with expert PMs