This SaaS startup helps small businesses, single-store retailers create customer retention programmes
Small businesses that thrive from the support of the local community lose out in the larger market due to pricing and supply power of the big-box retailers and ecommerce giants. Ankita Garg and Amitabh Mehta realised that in many ways technology plays a major part in retaining customers. In a bid to help SMEs establish customer loyalty, the duo founded their startup, Enthrall Labs, in 2017.
A B2B startup based in Bengaluru, Enthrall Labs’ SaaS product HyPerk helps small-sized offline businesses—such as convenience stores, restaurants, salons, pet stores, and bookstores—acquire high value customers.
It does so by enabling them to engage their target audience effectively, win over and retain more customers, and increase their lifetime value.
"We are solving for improving customer retention for offline businesses. We are starting off with restaurants as a category because they face severe customer churn and operate on high acquisition costs," Co-founder Ankita says.
How HyPerk works
Friends Ankita and Amitabh were classmates at IIM-B, and started Enthrall Labs a year after they graduated in order to work on bringing technology to small businesses.
"When a new customer walks into a restaurant because of discovery platforms, ads, and referrals, it is an opportunity for the store to bring them into their ecosystem and build a long-term relationship on their own, without paying extra commissions to other platforms for getting the same users again," Ankita explains.
The startup provides each business with a unique invite code, using which they can invite their customers to become a member. Post becoming a member, customers can view the store catalogue, pre-order, receive offers, manage subscriptions, and use the store’s e-wallet.
Business owners can run targeted campaigns to nudge their members, manage credits, engage with their customers, manage customer rewards, receive feedback, and run referral campaigns.
"We did our first few free pilots with selected businesses and developed our MVP quickly with them. Once our MVP was ready, we approached a few restaurants, and soon enough got our first cheque. We realised that the problem for high acquisition costs and high churn is so bad in the restaurant industry because of deep discounting, and everyone is looking for as solution. We are glad that we have early adopters who believe in us and gave us a chance to prove our model with them. This validation is critical for any B2B product," says Ankita.
The business model and future plans
The founders have invested their own money in the startup and don't want to disclose revenue or investment plans at this point of time.
The challenge right now for HyPerk is to find an effective customer acquisition model.
"Over time, our product needs to prove that it works. Another challenge we have is to expand our reach without increasing our variable costs much. We keep a close eye on the unit economics and we want to ensure that we grow profitable," says Ankita.
Enthrall Labs follows a SaaS business model with annual pricing for the retailer or restaurant. It charges each business a fixed subscription charge.
"Right now, we are working with a few priority partners. Our plan in the next six months is to build a sales team and expand to a wider market. Plans are on to reach out to more businesses and on-board more than 500 businesses," says Ankita.
The 10-member Enthrall Labs team works with around 25 businesses using the HyPerk platform and has enabled 225 transactions so far.
"Our ground-up design to serve single stores is our unique proposition, which we believe will pay off in the long run. Our solution is not force fitted. Hence, it is easy to use, quick to learn, is value for money, and without any complications of feature overrun or variable pricing. Everything is designed keeping in mind a nearby grocery wala who does not want to deal with upfront investment in specific hardware, and learn complicated systems," says Ankita.
The startup founders say their differentiation is that they offer hyper-targeted, mobile, customer-driven loyalty programmes.
"We are using the latest research available from customer behaviour in building a customer-driven loyalty programme. We are using gamification and designing nudges to promote habit formation and customer loyalty," says Ankita.
There are 10 million small retail businesses in India, according to KPMG. If you include small manufacturing business and professionals the total number of small businesses is 50 million in India.
With HyPerk Enthrall Labs' target market includes businesses such as restaurants, grocery stores, pharmacy stores, pet stores.
There are many different players building solutions focused for larger business and for smaller chains, like PoS solution provider GoFrugal. There are also businesses solving some unmet needs, such as billing systems, discovery platforms, payment apps, and CRM. However, solutions like HyPerk that are focused on single stores are not many.
In recent times, with the advent of smartphones and the reach of the internet, companies have started thinking about the need for this uncatered segment. Reliance Jio too is making a move to help kiranas with its technology.
On future plans, Ankita notes that the startup’s prime focus is not to expand too quickly on the clients front but to improve upon the product, the analytics engine, and to work closely with select businesses.
(Edited by Evelyn Ratnakumar)Ends