Does a Jaipur merchant survey justify expansion?
Before the decision
A phone survey shows high intent, but hard-to-reach merchants are underrepresented. The survey vendor promised a quick read from a directory of existing contacts. The commercial team discovered that many of the locations it wants to serve are absent from that directory.
The problem
Should the team choose Field validation or Phone survey for the next 12 months?
Decision owner: The business unit lead.
The survey misses businesses open only at peak hours or without current phone numbers.
Option economics
Scroll the table to see all figures.
| Option | Volume (verified accounts) | ₹ per unit | Fixed cost | Net contribution |
|---|---|---|---|---|
| Field validation | 5,700 | 680 | ₹27 lakh | ₹11.76 lakh |
| Phone survey | 7,400 | 490 | ₹23 lakh | ₹13.26 lakh |
Make the call
- Calculate net contribution for Field validation and Phone survey. Which assumption makes the comparison most fragile?
- If the leading option delivers 10% fewer verified accounts, does your recommendation change?
- What evidence would you ask for before the team makes an irreversible commitment?
Reveal the worked solution
Start by validating Phone survey. It contributes ₹13.26 lakh after fixed costs and leads by ₹1.5 lakh. Treat that gap as the amount of unmodelled cost or lost contribution the option can absorb before the ranking reverses.
- Frame the decision
Specify the eligible population and the outcome before collecting data. Treat the figures as planning estimates. Use comparable groups to measure the effect before rollout.
- Calculate both options
Field validation: 5,700 verified accounts × ₹680 less ₹27 lakh in fixed costs gives ₹11.76 lakh. Phone survey: 7,400 verified accounts × ₹490 less ₹23 lakh in fixed costs gives ₹13.26 lakh.
- Stress-test the forecast
Phone survey leads by ₹1.5 lakh in the base case. If Phone survey delivers 10% fewer verified accounts (6,660) at the same margin and fixed cost, it contributes ₹9.63 lakh. Holding the other option constant, the stressed result falls behind. This isolates volume risk. Check whether both options would respond to the same change in demand.
- Set a decision threshold
Holding the other option’s result fixed, Phone survey needs at least 7,094 verified accounts to match or beat it under the model. Draw a validation sample from storefront listings and report nonresponse by ward.
The survey misses businesses open only at peak hours or without current phone numbers. Compare the cost of a limited test with the loss the business would face if the full commitment failed. Ask the team to agree the decision criterion before collecting more evidence.
Check whether your answer names the trade-off, cites a number from the exhibit and specifies a reversal condition.
What if the whole market moves?
The worked solution tests a change to one option at a time. Here, both options gain or lose the same percentage of volume. Unit contribution and fixed costs stay constant.
| Volume scenario | Field validation | Phone survey | Higher contribution |
|---|---|---|---|
| Both lose 10% of volume | ₹7.88 lakh | ₹9.63 lakh | Phone survey |
| Base assumptions | ₹11.76 lakh | ₹13.26 lakh | Phone survey |
| Both gain 10% of volume | ₹15.64 lakh | ₹16.89 lakh | Phone survey |
Explain which option you would take forward. Check whether capacity, price or customer mix would also change as the market moves.
Practise this case as an interview