Retain existing customers

Instead of focusing solely on acquiring new customers, startups should prioritize retaining existing ones. This is the best way to increase revenue and reduce expenses in a context where cash flow is no longer readily available.

Retaining existing customers – an effective way to increase revenue and reduce expenses.

Instead of focusing solely on acquiring new customers, startups should prioritize retaining existing ones. This is the best way to increase revenue and reduce expenses in a context where cash flow is no longer readily available.

Kamereo, a B2B food delivery platform founded in Vietnam by Japanese entrepreneur Taku Tanaka, has announced it has raised $7.8 million to expand its business.

Representing the investment fund that has been supporting the start-up from its early days, Ms. Hoang Thi Kim Dung, Country Director of Genesia Ventures Vietnam, assessed that one of Kamereo's success factors is its continuous increase in customer retention rates.

Ms. Dung believes that customer retention is one of the most important indicators for building a financially healthy and sustainable start-up. According to a Harvard Business School study, existing customers spend 33% more than new customers; a 5% increase in customer retention can lead to a 25% to 95% increase in profits.

This shows that focusing on "burning money" to find new customers will only worsen the company's financial situation; in fact, the more sales and new customers it acquires, the more losses it will incur.

"Focus on your existing customers, identify the best customer segments within them, and then try to convince them to continue using your services. This is the best way to increase revenue and reduce expenses in a context where cash flow is no longer readily available," emphasized a representative from Genesia Ventures Vietnam.

At Kamereo, the customer retention rate is over 80%, meaning that for every 100 customers who start using Kamereo's services, more than 80 continue to use them in subsequent months. Particularly in the Vietnamese food delivery market, where delivery speed is always a major challenge for any company, Kamereo consistently achieves an on-time delivery rate of up to 99%.

Ms. Dung revealed that Founder and CEO Taku Tanaka has his own strategies for retaining customers. First, he decided to separate the sales team and the customer service team into two distinct groups. Typically, in many startups, these two departments are combined, each responsible for acquiring new customers, selling, and providing support to existing customers.

On a small scale, this approach might still be effective, but as startups grow and acquire more customers, the sales department will find it difficult to handle multiple tasks. Furthermore, the skills needed to acquire new customers and the skills needed to nurture existing ones are not the same. "The decision to separate these two groups of employees has helped Kamereo significantly improve its customer retention rate," Ms. Dung affirmed.

In addition, Kamereo has strived to create customer loyalty to its services and products by delivering the exact values ​​that customers need and consistently keeping them satisfied with those values.

According to CEO Taku Tanaka, from its early days, Kamereo clearly defined the value it would bring to customers: competitive pricing, high-quality products, excellent service, and efficient operations. To create these values, the entire Kamereo team continuously pursues the Kaizen philosophy – a very famous Japanese business philosophy – which is the spirit of continuous improvement and refinement based on customer feedback and the startup's real-world data.

From the perspective of a startup investor who has invested in early-stage startups, Ms. Hoang Thi Kim Dung strongly believes that investing in a startup with good growth and high-quality customer retention is better than investing in a business with explosive growth but low customer retention. Kamereo's success today is the clearest evidence of that belief.

Source: https://baodautu.vn/giu-chan-khach-hang-cu---bien-phap-tang-thu-giam-chi-hieu-qua-d235083.html