Startups like Indonesia’s ESB will confirm that beyond customer acquisition, the other key part of running a successful business is retention. Attracting a new customer costs five times more than what it takes to keep an existing one. The probability of closing a deal with an existing customer is around 60% to 70%. When it comes to selling to a new prospect, however, that figure drops to somewhere between 5% and 20%.
As such, one of the most important rules of business is to retain customers and build relationships with them. By raising the lifetime value of a customer, you’re also able to offset your overall customer acquisition cost.
On a recent episode of Indonesia Digital Deconstructed, Adrian Li explored the topic with Gunawan Woen, co-founder and CEO of ESB, a leading restaurant management SaaS used by many of Indonesia’s most prominent F&B outlets, including Ismaya, Boga Group, and Starbucks.
ESB’s platform provides a full-stack solution for restaurants that includes point-of-sale, enterprise resource planning, a mobile ordering system, digital payment services, and more.
Following a US$29 million funding round in August 2022, the startup began offering working capital facilities and expanded productivity features designed to help SMEs increase their sales. It also rolled out order and delivery channel management solutions, accounting capabilities, supply chain management, and a human resources information system.
Having raised US$39.6 million in total funding since March 2021, Gunawan mentioned that ESB achieved a retention rate of 90% during the pandemic for two key reasons: human touch and sticky product features.
While Covid-19 made human contact challenging, ESB maintained a human touch in the way it handled customer support requests.
In recent years, many companies implemented chatbots to cope with customer support interactions, or at least funnel inbound requests through a few levels before allowing customers to reach another human on the other side of the chat. This is understandable in terms of facilitating efficiency and lowering support costs. But in the context of food service, ESB did not want to lose the all-important human touch.
Today, its customer support chat continues to be run by a whole team ready to address questions, troubleshoot issues, and receive feedback from customers. The company wants its customers to feel that they are receiving the attention they deserve by creating a connection and that ESB is there every step of the way. Even if their issues are not resolved immediately, people should feel a sense of comfort when being tended to by customer support.
This was no more prevalent than during the pandemic when many were already feeling isolated. Working so closely with customers on a personal level during 2020 and 2021 is what helped propel ESB to its current level of traction, explained Gunawan.
ESB was built to stick
The entrepreneur added that ESB also built core functions into its product early on that tend to create strong stickiness amongst its restaurant users. Often in enterprise tech, this means a product is so integral to a company’s operations that migration away from it would be difficult or otherwise unappealing. Product stickiness also refers to the tendency of users who keep coming back to your product because it is valuable to them.
Stickiness propels growth by enhancing customer retention, providing account expansion opportunities, and increasing customer lifetime value. Check out the full episode of Indonesia Digital Deconstructed to learn more about ESB’s sticky features.
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