Basil & Co: Newer Customers Are Leaving Faster
Marketing
easy40 min0 submissionsGoogle
Scenario
Basil & Co is a quick service restaurants business in India with about 78k active customers paying ₹682 per month on average.
Monthly churn has risen from 3.3% to 5.4% over four quarters. Acquisition has not slowed — the base is still growing — but the finance team has noticed revenue growth decelerating faster than the customer count would suggest.
What the analytics team has produced:
- Cohorts from 12+ months ago still churn at about 3.3% a month
- Cohorts acquired in the last two quarters churn at roughly 5.4%
- Retention by tenure: month 1 57%, month 3 42%, month 12 27%
- 48% of customers acquired in the last two quarters came in on a promotional discount, up from a much smaller share previously
The CMO believes the product has got worse. The Head of Product disagrees and points at marketing.
Supporting data
base
- arpu monthly
- 682
- active customers k
- 78
churn
- older cohorts pct
- 3.3
- recent cohorts pct
- 5.4
acquisition
- discount acquired share pct
- 48
derived hints
- monthly revenue at risk
- 0.1
retention by tenure pct
- month 1
- 57
- month 3
- 42
- month 12
- 27
Your task
Diagnose the churn increase and recommend a response. Your answer should provide:
- Analysis — structure the churn problem and isolate where it actually sits.
- Risks — what your diagnosis depends on, and what would disprove it.
- Recommendation — specific actions, and what you would measure to know they worked.
State any assumptions you make.
Ready to move forward? Up next: Kirana Connect: Where Should the Acquisition Budget Go?Next question
How you'll be graded
100 points, 60% to pass.
- root cause25
- recommendation20
- cohort analysis30
- problem structuring25
Hint
Reveal suggested structure
Churn by cohort × tenure × acquisition source; early-life vs late-life; mix shift vs product change