Retain old customers

Instead of focusing on finding new customers, startups should focus on “retaining” old customers. This is the best way to “increase revenue and reduce expenses” in a context where cash flow is no longer easy.

Retaining old customers - an effective measure to "increase revenue and reduce expenses"

Instead of focusing on finding new customers, startups should focus on “retaining” old customers. This is the best way to “increase revenue and reduce expenses” in a context where cash flow is no longer easy.

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

Representing the investment fund that has accompanied the start-up since its early days, Ms. Hoang Thi Kim Dung, Country Director of Genesia Ventures Vietnam, assessed that one of the factors for Kamereo's success is the constant increase in customer retention rate.

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

This shows that focusing on "burning money" to find new customers will only make the business's financial situation difficult, even the more sales and new customers, the more losses.

“Focus on your current customers, find the best customer files, and then try to convince them to continue using. This is the best way to increase revenue and reduce expenses in the context of cash flow being tight,” emphasized the representative of Genesia Ventures Vietnam fund.

At Kamereo, the customer retention rate is over 80%, meaning that for every 100 customers who start using Kamereo's service, more than 80 customers continue to use it in the following months. Notably, in the food delivery market in Vietnam, where delivery speed is always a big challenge for any unit, Kamereo always achieves an on-time delivery rate of up to 99%.

Ms. Dung revealed that Founder and CEO Taku Tanaka had his own strategies to retain customers. First, he decided to separate the sales team and customer care team into two separate groups. Normally, in many startups, these two departments are combined, both finding new customers and selling and taking care of and supporting old customers.

On a small scale, this approach may still be effective, but when a start-up has more customers, it becomes difficult for the sales department to multitask. Not to mention, the skill sets needed to acquire new customers and the skills needed to take care of existing customers are not the same. “The decision to separate these two groups of personnel has helped Kamereo greatly improve its customer retention rate,” Ms. Dung affirmed.

Besides, Kamereo has made efforts to create customer adhesion to services and products, by bringing the exact values ​​that customers need and always making them satisfied with those values.

According to CEO Taku Tanaka, Kamereo has clearly identified the value that the start-up will bring to customers since its early days, which is competitive prices, good product quality, good service quality and good operation. To create the above values, the entire Kamereo team continuously pursues the spirit of Kaizen - a very famous Japanese business philosophy - which is the spirit of continuous improvement and perfection based on customer feedback and actual data of the start-up.

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

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