Image credit: Jessyfrup

Image credit: Jessyfrup

Every business faces a similar dilemma: How to get returning customers? This is especially true in the restaurant industry, where Taipei-based startup Jessyfrup has developed a solution in the form of a nifty iPad app that it claims is helping local business get retention rates of up to 30 per cent.

Just six months old and the bootstrapped Jessyfrup is already working with 50 small businesses in the city and looking to land contracts with a few ‘big name’ restaurants in the coming months.

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Founded by Chu Hsuan Ting, a graduate of the Chinese Culture University in Information Communications, the startup’s four-man team is already eyeing expansion into Hong Kong and Singapore in 2015.

“Jessyfrup CRM is our first product, which is an iOS app. It’s a CRM (Customer Relations Manager) system for restaurants. We help them raise their customer retention rate,” Ting told e27.

“We found out that many restaurants in Taiwan use Yahoo ads, Google AdWords or Facebook ads to get customers from the Internet into their stores. They pay like US$300 every month for online advertising. But those customers will only visit the store once, so they have to keep spending US$300 to get more customers,” he added.

This is where Jessyfrup steps in, allowing customers to input their mobile number into the store’s iPad app in person and then receive promotions/offers via SMS to encourage them to return. The startup uses its own data to calculate when best to send the SMS to each customer to maximise return rates.

Ting estimates that when businesses use his system they can reduce a US$300 monthly online advertising spend by as much as half thanks to increased retention rates.

“We have two [sources of] income. The first one is the fee for the app. To use our software you have to pay US$70 per month. The second is we help you to design the marketing campaign,” Ting said. Prices for established chain stores will be higher.

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“I think investors will be interested. There are barely any services for collecting customer data in offline situations. Everyone is collecting customer data online like Facebook and Amazon,” he added.

While the startup is currently still losing money, it expects to hit profit around May 2015, about five months from now. In the meantime, Ting and his team are looking for a US$300,000 seed round.

The main challenges have been in figuring out what small restaurants and retail stores really want and need.

“At the beginning, we thought they wanted numbers, reports and analytics. But we found out that the small stores don’t care about that. They just want more people. The big stores care more about data mining and intelligence,” he said.

Turning to Taipei as a startup location, Ting called it a ‘weird place, a weird city’.

“Taipei is basically only a money city. All the VCs and angels are based here, but none of the strengths of Taiwan are in Taipei. So it’s a weird city to start a startup,” he said.

Ting is eyeing expansion into Singapore and Hong Kong due to earlier adoption of new technology in those markets, as well as the fact that he personally wants to work in a new place.

Recently, Jessyfrup had a presence at Asia Beat Taiwan 2014. It was first year the event co-organised by e27 has run.

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Possible threats to the business model include ease of copying, but that does not necessarily mean imitators will be able to execute the concept as well or as quickly.

“Our app is easy to copy just like Uber’s is easy to copy, but our business development team is very strong. We have been able to collaborate with some big brands in Taiwan in a very short time. We have very good relationships in the industry,” he said.

Ting explained that initially he wanted to create a point of sale solution for businesses, but quickly realised the space was too big. He needed to identify something more niche.

“We thought: What kind of functions do restaurants need that they don’t have now? Or what is old fashioned that we can renew? We identified coupons and membership systems. The interface and way it’s done is still old-fashioned,” he said.

The startup is expecting to announce a major new partnership with a well-known Taipei restaurant in the next month, but can’t reveal any details at present.

As a side piece of trivia, the ‘Jessy’ part of the name comes from one of Ting’s high school friends, and the ‘frup’ part comes from Starbuck’s world-famous Frappuccinos.

If you follow the Taiwan startup scene, these guys may be a team to keep on your watch list.

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