Five lessons on scaling your customer service from Smart50 winner Foodbomb
The hospitality sector is one that’s built on strong relationships; on handshakes, trust and knowing your neighbours. In a lot of ways, it’s pretty traditional like that.
So when Foodbomb came onto the scene to simplify the venue-supplier relationship through tech, it was important for founders Paul Tory and Josh Goulburn to bring those business owners along on the journey. That meant meeting face-to-face, jumping on the phone and asking for input, all to be sure their product would actually be useful.
Now the startup is scaling, and such things are not exactly practical anymore. But they’re as important as ever.
Foodbomb took home the first ever SmartCompany Startups Award — then called the StartupSmart Award — at the Smart50 Awards 2018. Each year, the Smart50 Awards run to celebrate the very best of Australian business. Join us for the 2021 virtual event by registering here.
Growth during testing times
Essentially, Foodbomb is a marketplace for wholesale food suppliers, allowing restaurants, cafes and other venues to order from various suppliers through one platform.
Born out of Tory’s previous meat sales platform Butcherman, the startup launched as Foodbomb in 2017.
When Tory filled out the Smart50 application form in June the next year, the business had 100 active customers and 30 suppliers on the platform, and was processing about 500 transactions every month.
By the following December, those numbers had tripled. And in April 2019, the business raised $1.4 million from early-stage VC Equity Venture Partners, having recorded 12 months of consecutive month-on-month growth.
In August 2021, Foodbomb hit the news again with a $4.5 million Series A raise.
Of course, in the hospitality sector, an awful lot had changed in the interim.
Tory says the business is at least 10 times the size as it was when we first met in 2018. If it wasn’t for the pandemic, he believes it would be double the size again.
For the most part in 2020, when Melbourne was in lockdown, businesses in Sydney were still operational, Tory explains. During Sydney’s lockdown the team launched a B2C offering, at the behest of their supplier customers.
On the one hand, he says there’s “no doubt” Foodbomb has lost customers along the way, as venues have gone out of business. CBD venues in particular are struggling, he notes, while those in more residential areas are surviving, if not thriving.
“We’re just seeing the territory start to change,” he says.
On the other hand, the startup is still onboarding between 40 and 50 new venues per month.
New and existing clients may be ordering less frequently and spending less when they do, but Tory is heartened by the number of transactions still coming through the platform.
“Venues are running on smaller staff, they’re looking to optimise and streamline the way they run their business. Foodbomb has been great for that.”
Now he believes the business will be ready to pick right up again when the lockdowns ease.
“It’s a long game. It’s a marathon not a sprint.”
Part of the reason Foodbomb has survived — a tech business operating in an antiquated industry that’s plagued by low margins and under more pressure than ever — is its continuing focus on its customers, and constant communication with them.
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As the business has grown, the founders have incorporated high-tech tools, customer engagement groups and good old fashioned one-on-ones to ensure they’re meeting the ever-changing needs of their customers.
“We are a product-led company, which means if we are going to win this it’s going to be because we’ve built products that the customers want and need,” Goulburn explains.
At the same time, “we understand that this industry is antiquated,” he adds.
Widespread adoption of technology in this sector requires behavioural change, and that requires education and collaboration.
So while this is a tech company, some of those conversations have to happen offline, balancing data-based methods with more traditional, pick-up-the-phone customer care.
The founders now take a multi-pronged approach to customer communication and relationship management.
Foodbomb's five-step approach
First, the business now has two dedicated customer success teams, one focused on suppliers and one on venues.
Their job is to be in constant communication with customers, meeting with them (when they can), getting a sense of their needs and taking feedback on board to work into new features.
Each customer has one dedicated team member, and the idea is that the customer should always be able to reach them, at any time.
“It makes the whole experience easier and smoother.”
The second prong to the strategy is around hiring people with industry experience.
Yes the teams can talk to the customer and seek individual input, but the idea is that everyone within the business also has some experience of what it’s like to work in hospitality, either on the venue or supplier side.
Tory himself founded the business after some 20 years in the sector, to solve some of the problems he saw persisting. He knows better than anyone that if an employee has been in the customers’ shoes, they can understand the pain points much more acutely.
Foodbomb has also launched its Foodbomb Collective, a group of venues that have volunteered to offer up feedback and ideas.
It’s a relatively new initiative, Tory explains, but more venues have put their hands up than he expected.
The group has already suggested a ratings and review system for suppliers, allowing them not to criticise, but to highlight which are best for which products. The idea is not to tear any business down, Tory stresses, but to help ensure they find the supplier that is the best fit for them.
Finally, Foodbomb has started analysing customer data to better understand and anticipate their needs, delivering the right communications at the right times.
“Ultimately, that has a really big impact on our success,” Goulburn says.
While the customer success teams are getting word-of-mouth feedback, the data teams are digging into behavioural patterns. They can get a sense of what’s selling well, and when; of when venues order their veg or meat; and of whether suppliers are growing.
That means they can send out the right comms, and address any issues those customers may be facing sooner rather than later.
It’s no longer the case that one person or even one team is managing communications and customer relations, Goulburn says.
“It’s a collaborative approach.”
Multiple teams are working together to create a holistic view of the customers and to figure out new ways to solve their problems.
“Unless we’re out there speaking to them, and constantly trying to solve their problems and understand exactly what it is their problems are, we can’t evolve as a company.”