Mulah pivots to establish foothold in Malaysia

  • Constant learning and reinvention lead to final successful product
  • Training and providing value for customers essential

 

Mulah pivots to establish foothold in Malaysia

 

MALAYSIA-based software-for-services startup Mulah was established in its current form in early 2016 but has already gone through quite a few changes to its business model – a few small pivots – to get where it is now.

Mulah operates Mulah Rewards, a loyalty system that allows users to collect points with their mobile phone numbers and receive rewards at restaurants and retailers. But co-founders Nicholas Liu and Pei Ong actually started Mulah as an in-store ordering app; basically, consumers could use it in a restaurant to order their food.

The learning that led the business from this app to the rewards programme happened on the go. The app’s first retail customers were a bar and a mid-range restaurant but Liu and Ong soon learned that the app would only really work in a setting that required the least change of consumer behaviour coupled with affordable menu prices that engendered continuous revisits from consumers and so shifted focus to another restaurant that met these criteria.

“We were marketing aggressively and getting downloads very quickly but the uninstall rate was very high. We would get 100 downloads a day but that same night there would be about 80 uninstalls,” says Liu.

Customer feedback was that ordering through the app was more of a hassle than filling in an order chit at the restaurant as the consumers were used to. This was another big lesson the co-founders learned: “We realised we have to cater to demand, give people what they actually want”.

This may have been an obvious truth but Liu and Ong needed that real-world experience for it to become evident. Using this knowledge, they developed a loyalty programme, working off another universal truth: consumers, especially Southeast Asian ones, love loyalty programmes.

The loyalty programme resulted in a 40% drop in uninstall rates and pushed up the app’s organic usage rate significantly. It became clear that a digital loyalty programme would work better. “So we very quickly pivoted from a food ordering app into a loyalty programme provider for our merchant partners,” explains Liu.

The next pivot happened when the co-founders realised that the app was gathering a tremendous amount of information about each restaurant customer, powerful data that was lucrative for SMEs to have.

After conducting some research, they decided to do something similar to US company FiveStars, which runs the largest customer loyalty programme in the US, using automated promotions, acquisition and loyalty in one marketing programme.

“With this data, our partners could build a stronger brand and mind share, reach out to their customers and enlarge their customer base,” says Liu, adding that these findings gave them a lot of confidence in the product they would eventually develop.

This confidence in their final pivot would help Liu and Ong in their next challenge – fighting to stay alive against a bigger player in the market.

David vs Goliath

Just as Mulah made its last pivot into its loyalty programme, BIG Zap Sdn Bhd, a joint-venture between AirAsia Bhd and Zap Philippines, the largest loyalty programme in the Philippines, entered Malaysia with about 500 partnering merchants at the outset.

“We needed to set ourselves apart from BIG Zap as we were a small startup while they were the 800-pound gorilla in the room,” says Liu.

The Big Zap product did not have an app while Mulah’s did, and to enable its partners to reach their customers at no cost, Mulah developed a push notification feature. This meant that Mulah partners did not have to be concerned about rising SMS costs as their customer databases grew. Liu says that the in-app messaging feature impressed potential partners so much that it changed some minds about signing up with Big Zap.

“That was a really small blow for them but to our team, it was a glimmer of hope. We felt we could actually beat them at their own game so long as we kept our ears close to the ground and our minds set on anticipating our partners’ needs.”

“We decided that we should provide value for our partners so it would be a no-brainer for them to pick us over our competitor,” he continues. “Our goal was and is to transform retail.”

Mulah created more value by meeting another partner need – Mulah Discover was created as an avenue through which business owners could reach out to discovery platforms such as FoodPanda or 11Street as a way to generate new business. Mulah also compiled site data from social media influencers and news media for its partners.

These extra services and information greatly increased Mulah’s partner’s perception of the value Mulah brought to their businesses, and in return helped seal many a deal, says Liu.

Next page: More challenges, more hard work before success

 

 

Guidance is essential

 

Mulah pivots to establish foothold in Malaysia

 

Meanwhile, there was an on-going challenge that had to be resolved. Consumer sign-up rates were low because partners’ staff were not getting their customers to sign up for the loyalty programme. The team discovered that this was due to the fact that the majority foreign-worker staff either did not know how to go about this or were unable to do so because of language barriers.

Liu points out that Big ZAP was encountering the same problem in Malaysia but did not seem able to solve it whereas Mulah drastically improved its training programme to include detailed instructions and even role-playing activities on how to on-board customers.

“The training programmes are extremely important,” says Liu, explaining that it is essential that staff understand why their employer is instating the loyalty programme, why they are collecting data and why the staff have to get people to sign up. This information converts into an intrinsic motivation for staff to help their employer do well.

There was an instant improvement in sign-up rates to the loyalty progamme after the training programme was initiated. Liu says that the training and the hands-on service Mulah provides is the main reason partners choose Mulah and stick with the startup. “We are quite a customer-oriented company in that sense.”

Perseverance leads to sustainability

Mulah’s training extends to its own staff – Liu says that its marketing team is taught what he calls hard skills, which is exactly how to sell the product. They are also empowered to change the way the startup does things if they believe methods can be improved.

The startup is looking to expand its marketing team in preparation for growth; its tech team is outsourced from its investor, tech venture builder LaunchPad. It currently has 38 partners in the Klang Valley and Malacca, 95% of which are restaurants and 5% retail. It plans to go into Indonesia and Taiwan and grow its team from the current 40 to 60 in the next six to nine months.

Liu admits that Mulah is a little behind in its targets. The initial plan was to have 40 partners on board by July and a bigger team. The pivots and changes, however, have taken up time, though they have not eaten through the startup’s funding.

Mulah obtained seed funding of RM600,000 (US$139,659) from LaunchPad early last year and has been subsisting leanly on that. Liu says Mulah will be ready for its next funding round in about three to six months.

Now, the target is to get 100 partners on board by the end of the year, which Liu says is definitely achievable. Partners pay an average subscription fee of about RM3,500 (US$814.60) per year but Liu declined to reveal exact revenue numbers, though he does believe that Mulah can reach profitability by early next year.

Liu says that the co-founders plan to take the business as far as it can go after profitability. “When I say we want to transform retail, I mean that we have long-term plans for more products, such as a digital queueing system, and to use beacon technology to push promotions to customers’ smartphones.”

The lessons the startup has learned in its short but eventful journey so far will hopefully keep it on the path to success. Liu says the biggest lesson is the importance of providing good training and guidance for staff, and trusting and listening to them.

His advice for small startups fighting to gain a foothold in their industry is to look for a niche and establish themselves there. “You should always listen to your customers, identify their pain points and have a long-term plan to deliver more value to them,” he says.

“It doesn’t matter if you’re a small business; you can grow. It’s ok to start small, as long as you have plans in place to grow big.”

 

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