How would you investigate if the number of transactions suddenly decreases?

Question Analysis

This question is designed to assess your problem-solving skills and ability to perform a root cause analysis. It evaluates your understanding of data analytics and your capability to identify and address issues that may arise in transactional data. You are expected to demonstrate a structured approach to problem-solving, showcasing both your technical skills and strategic thinking.

Answer

To investigate a sudden decrease in the number of transactions, I would follow a structured approach:

1. Data Verification

   • Check Data Integrity: Ensure that the data collection process is functioning correctly and that there are no errors in data logging or reporting. This includes checking for system outages or data pipeline issues.

2. Trend Analysis

   • Historical Comparison: Compare the current data with historical data to determine if the decrease is part of a broader trend or an isolated incident.
   • Seasonal Patterns: Analyze any seasonal or cyclical patterns that might explain the decrease.

3. Segment Analysis

   • Identify Affected Segments: Break down the transaction data by various dimensions such as geography, customer demographics, or product categories to identify specific areas that are affected.

4. External Factors

   • Market Analysis: Investigate if there are external factors such as economic downturns, changes in consumer behavior, or competitor actions that could influence transaction volumes.
   • Regulatory Changes: Check for any new regulations or policy changes that might impact transactions.

5. Internal Factors

   • Product or Service Changes: Review if there have been any recent changes in the product, service, pricing, or promotional strategies that could have affected customer behavior.
   • Operational Issues: Examine if there are any operational issues such as supply chain disruptions or inventory shortages that might impact sales.

6. Hypothesis Testing

   • Formulate Hypotheses: Based on the analysis, formulate hypotheses on potential causes and test them using A/B testing or controlled experiments if possible.

7. Communication and Action

   • Report Findings: Communicate the findings to stakeholders with clear visualizations and recommendations.
   • Implement Actions: Collaborate with relevant teams to implement corrective actions to address the identified issues.

This methodical approach ensures a comprehensive analysis of the issue, leading to effective problem resolution.