Price Optimization for a Subscription Model with High Churn Rate
Instruction: Propose a price optimization strategy for a subscription model experiencing a high customer churn rate.
Context: This question tests the candidate's ability to use pricing as a tool to reduce churn and improve customer retention in a subscription-based business model.
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I would diagnose churn before changing the price. Separate voluntary cancellations from failed payments and distinguish price objections from missing value, reliability problems or a mismatched billing unit. Interview recent leavers and people who renewed; high usage does not prove low price sensitivity.
Define a starting paid cohort and renewal window...