SmartQ is already monetizing

I will be skipping this section, but i will be doing litmus test in next section

SmartQ monetization

Still doing litmus test to check how SmartQ is doing:

SmartQ’s Goal

To provide exceptional food service for corporates by managing the end-to-end operations of their cafeteria, ensuring seamless execution for admins. SmartQ delivers high-quality, compliant, and engaging dining experiences while offering transparent, value-driven pricing based on the services provided.

ICP

Lets look at our ICPs (This is the continuation from our past projects). 3 ICPs are mentioned and another section on in depth research for SmartQ is documented. Did research across 12 clients

Client/ User segmentation

Here the Client means Admins/ facility managers of corporates

The natural frequency of SmartQ

Casual Users: Engagement with SmartQ team once a month
Core Users: Engagement with SmartQ team once in a week
Power Users: Engagement with SmartQ team 2-3 times in a week

Monetization litmus test

(Conduct the litmus test for your product)

Retention Graph ✅

SmartQ has a flattening retention curve, as a B2B food service company the retention rate is around 92% on an average and the flattening of the curve starts happening post 2.3 years.

Lets see retention for different segments. X axis denotes months and Y axis denotes percentage of active clients.

• Casual: We can see at 88% in 24th month the line flattens
• Core: At 91% in 27th month the line flattens
• Power: At 95% in 27th month the line flattens

Depth of Engagement ✅

Documenting the data of research based on Engagement frequency, feature usage and transaction value in the tabular format here:

After a deep dive into our depth of engagement with SmartQ's service, we identified the distribution of clients across Core, Power, and Casual users based on Ideal Customer Profiles (ICPs):

• ICP 1 (Core Users): 25% of our clients
• ICP 2 (Power Users): 33% of our clients
• ICP 3 (Casual Users): 41% of our clients

Willingness to Pay ✅

Since ICP-1 (Core Users) and ICP-2 (Power Users) make up a significant portion (58%) of our client base, I’ll focus on gathering detailed insights and analysis on these segments.

I will be following research methodology of focus groups and do 1:1 calls to collect more information.

After speaking with our ideal customers (paying users of SmartQ), we found that our current pricing model—based on COGS plus a service fee—is well received by ICP-1 and ICP-2.

Key Takeaways:

• Clients in ICP-1 & ICP-2 are already aware of their cafeteria challenges and see value in SmartQ’s managed food service.
• They are willing to pay for quality and service continuity, provided it aligns with their core needs.
• Price sensitivity is lower in these segments—they prioritize problem resolution over cost reduction.
• If there is a price increase, they expect enhanced value in the form of better employee experience, consistency, compliance, and seamless cafeteria management.

This reinforces that SmartQ’s value proposition resonates strongly with ICP-1 & ICP-2, and we can strategically introduce premium service offerings without disrupting retention

Trial to paid conversion

Experiment 1: Converting Trial Users into Full-Fledged SmartQ Users

Since SmartQ doesn’t have a free service model, we currently offer a 15-30 day trial, allowing clients to experience our food quality, vendor management, and operational efficiency before committing. Currently right after trial, clients are only offered premium service. Our experiment here is to add another tier before premium service to give some basic features and push them towards premium at a higher pricing.

To increase conversion from trial to a full-fledged service, we can introduce tiered service models:

📌 Basic Plan (Standard Cafeteria Service)

• Food Service Only: Vendors deliver and serve food at the cafeteria, but no dedicated SmartQ operations executive is present.
• Limited Tech Access: Employees can scan a QR code for feedback, but no full tech integration (e.g., SmartQ app for pre-orders).
• No Free Events: Additional events or special menus will be charged separately.
  

📌 Premium Plan (Full SmartQ Experience)

• Dedicated Operations Executive: A SmartQ team member is always on-site, ensuring food setup, quality checks, and real-time feedback collection.
• Full Tech Integration: Employees get access to the SmartQ app, enabling meal pre-ordering, next-week menu visibility, and seamless feedback submission.
• Monthly Special Event: One free food event every month, providing unique employee engagement experiences.
  

📌 How This Drives Conversions:

1️⃣ Trial Experience Mirrors Premium Plan – Clients experience the full value of SmartQ, making them more likely to opt for the premium model after the trial.

2️⃣ Choice-Based Upsell Approach – By clearly differentiating basic vs. premium, clients can opt for enhanced services without feeling forced.

3️⃣ Employee Engagement as a Hook – The free monthly event in the premium plan makes cafeteria experiences more exciting and engaging.

📌 Communication plan

Show Value in MBRs – Every month, highlight how premium improves feedback, engagement, and quality assurance with real data. Make it clear: better service = happier employees.

Free Event Trial – Give basic plan users one free food event in month two. Let them experience what they’re missing.

Industry Insights – Share case studies, success stories, and peer comparisons via newsletters and emails to create FOMO.

Increase like for like growth by cross-selling and up-selling

Experiment 2: Upselling our core food buffet service

Goal:

Increase COGS size by upselling higher-margin food items (juices, cool drinks, desserts) while expanding the buffet menu from 10 to 14 items for premium clients.

Approach:

• Offer a weekly free upgrade (4 additional items) to premium plan users for 3 weeks.
• Gather employee feedback on the expanded menu.
• Present positive feedback & demand to admins, showing the need for more variety.
• Once employees get used to more options, transitioning to the higher-value plan becomes easier.

Communication Plan:

• MBRs & Emails – Showcase employee preference for expanded menus.
• Highlight Trial Results – Use feedback to prove employee satisfaction & engagement increase.

Experiment 3: Cross-Selling Additional Services like Vending machine

Goal:

Drive cross-selling of SmartQ’s vending machine service by offering a free one-month trial to create demand and habitual usage.

Approach:

• Free one-month vending machine trial at the client’s cafeteria.
• No rental charge—SmartQ earns commissions from vendors placing their items in the machine.
• Employees get 24/7 access to food, leading to habit formation & demand creation.
• After the trial, offer flexible pricing models:
• • Pay for vending machine rental OR
  • Pay only for the food consumed.

Communication Plan:

• Face-to-face meetings – Sales team presents the vending machine opportunity.
• Email communication – Announce the trial, highlight convenience benefits.
• Client site visit – Demo the vending machine, explain flexible pricing.

Substitute Pricing

What are your customers paying for?

Clients primarily pay for food service, but what makes them choose SmartQ over competitors is the added capabilities and value we bring. Here’s what they’re paying for:

• Food Service
• Vendor Aggregation
• Single Point of Contact
• Compliance & HSEQ Management
• SmartQ Technology
• Subject Matter Expertise

How does your product stand out?

In our business, food is considered as commodity and everyone charges for the same. Our focus is to get food right by ensuring everything around food is also taken care well.

• Menu Engineering – Reduces food monotony and enhances variety.
• Vendor Aggregation – Provides a diverse and flexible food service model.
• Dedicated Point of Contact – On-site personnel ensuring food quality, hygiene, and portion control.
• Technology-Enabled Subsidy Management – Flexible subsidy options tailored to client needs.
• Tech-Enabled Compliance Governance – Ensures strict adherence to food safety and quality standards.

How do you position your product?

SmartQ is considered as a premium food aggregator and cafeteria management company in the market. We have several competitors, some are highly organized and some are not very organized. Here is the table for understanding our right to win in the market

Monetization design

SmartQ is already monetizing well through its cost of goods model and service-based revenue.

• ICP-1 (Core Users) and ICP-2 (Power Users) contribute ~58% of total revenue, making them the primary revenue drivers. These users have a strong retention curve, flattening around 2.3 years, indicating long-term engagement.
• Depth of engagement is high due to the number of services used and frequent interactions.
• Willingness to pay increases with additional services, reinforcing SmartQ’s potential to scale revenue further.

Who to charge?

(Conduct an RFM Analysis and identify the users that you are monetizing and think about why them and not others?)

All SmartQ users pay for the service from day 1 as it is purely cost of goods. Cost of goods sold at premium, on actuals or small increment depends of segment to segment.
Casual users are very price sensitive while Power and core users have higher appetite to pay for the COGS at premium cost.

Redefining Churn rate for SmartQ
Users who drops SmartQ's service over time when the price increase is proposed/ implemented.

Baseline

SmartQ has a good conversion rate of 70% from paid trial users to full time service. Per client the GMV is 2 Lakh per month.

Lets look at different segments of users and their behaviour. As all these users are using our current core food service on a regular basis, i will consider 2 factors for RFM grid
1. Yearly Price hike

2. Other feature service

Yearly price hike RFM

In this RFM grid, i do not see any scope for improvement in terms of pricing for SmartQ. This is bound to be yearly or 2 years once activity. So i don't see a potential hike possible here

Other feature Services

Here we are looking at additional service or upselling possibility for Casual, core and power users. Analyzed 12 clients of SmartQ

We can see from the RFM grid Champions, Loyal customers, Potential loyalists are from ICP 1 and 2 who are our core and power users. They had higher appetite to pay and value of service is what mattered them the most. It is better to double down on these segments of users and offer more services which can fetch high revenue/ opportunity for monetization when bundled/ given as an additional service.

1. Value for SmartQ's service - Benefits to the user

2. Competitor Analysis

As per our analysis in the previous section of substitute pricing and also acquisition project, here is the table to understand the benchmarking

Competitive Benchmarking

1️⃣ Comprehensive Cafeteria Management (Can be monetized in premium)

• SmartQ acts as an extended team for admins, taking full ownership of cafeteria operations, unlike competitors who primarily offer tech-driven solutions.
• Menu Engineering & Food Experiences go beyond just product capabilities, ensuring engagement, variety, and satisfaction.

2️⃣ Flexible Pricing Models should be introduced (Can be Implemented)

• SmartQ offers premium benefits, justifying its higher pricing compared to competitors.
• To match lower-priced competitors, SmartQ can introduce Basic & Premium Plans:
• • Basic Plan: Mimics competitor offerings (no dedicated point of contact, no tech access).
  • Premium Plan: Includes dedicated on-site support, full tech suite, and superior compliance oversight.

3️⃣ Compliance & Vendor Management (Can be monetized in premium)

• Strict compliance monitoring ensures food safety and hygiene, a key differentiator since competitors do not emphasize compliance as much.
• Vendor nurturing & quality control drive food consistency, making SmartQ a trusted cafeteria partner rather than just an aggregator.

4️⃣ Superior Technology & Customization (Can be monetized in premium)

• SmartQ’s subsidy tech is highly customizable, unlike competitors with rigid structures.
• Advanced cafeteria tech solutions, including pre-ordering, feedback integration, and dynamic pricing, offer unmatched flexibility.

5️⃣ Food Aggregation Model (Should be in basic pricing)

• SmartQ’s harmonious vendor relationships allow it to ensure quality, variety, and reliability while competitors focus on pure aggregation.

3. Quantify your results ensuring they align with your price

Core service cost saved for User:

Daily time saved = 240 mins of vendor coordination, setup and review
120mins * 22 working day = 88 Man hours saved monthly.

4. Mapping out the products’ perceived value of across the user’s journey to choose "When"

Now we know the Perceived value is quite high. To make it clear lets see the break down of perceived value:

Perceived Value = COGS + 1 Manpower + Time Saved/ month + Access to database

But when we quote our price we try to include all of the above within COGS.

Perceived price = COGS

What to charge for?

Core Value of SmartQ Service is Food service.

Even though our core proposition is delivering a fully managed, tech-enabled cafeteria experience by aggregating vendors, ensuring compliance, and enhancing employee engagement. With seamless operations, menu engineering, and end-to-end cafeteria ownership, acting as an extension of the admin team, providing convenience, consistency, and superior food service.

Primary Monetization: Output-Based Pricing

• SmartQ’s core food service is priced based on COGS (Cost of Goods Sold).
• While the perceived value includes manpower, time saved, and access to insights, pricing is ultimately needs to be structured around food output. This ensures scalability while maintaining cost transparency for clients.

Secondary Monetization: Vendor Database Access

• Food events and additional services can be monetized based on vendor network access.
• Clients can be charged per event/service, leveraging SmartQ’s curated vendor base for high-quality food experiences

How does SmartQ Earn today?

Client pays SmartQ for the service offered (Based on COGS). SmartQ will further pay to its vendors for the COGS after deducting the commissions of SmartQ.

The only way of earning more is increasing the cost of COGS for Client in a sensible and an acceptable way. Lets see how we can do that

By taking SmartQ's service, Client or user is getting benefitted in multiple ways (As mentioned in previous sections):

• Reliable food service through vendor aggregation.
• On-time, consistent food delivery at the cafeteria.
• Strict compliance & HSEQ monitoring ensuring food safety.
• Convenience of ordering via SmartQ’s tech platform.
• Single Point of Contact (SPOC) for seamless coordination.
• Access to a wide vendor base for food services & events.
• Food festivals & events enhance employee engagement and bring appreciation to admins.

Time Saving

Due to our Service the client is saving huge time (Considering a cafeteria of 250 seating with 2 vendors operating at cafe):

1. Facility head : 30+ hours/ month

2. Admin Executive : 88+ hours/ month

3. Admin Cafeteria Manager: Full time : 176-192hours/month

Average salary:

Facility head = 2,00,000/month = Rs.1136/hour (Considering 22 working days)

Admin Manager = 80,000/month = Rs.454/hour (Considering 22 working days)

Admin Cafeteria manager = 60,000/month (full salary)

Cost of Time Saving = (Time of Facility head * Per hour facility head salary) + (Time of Admin manager * Per hour admin manager salary) + (Cost of Admin cafe manager)

Cost of Time Saving = (30*1136) + (88*454) + 60000
Cost of Time Saving = 1,34,032/month

Access

Cost of time saved for creating their own database + Compliance management for Auditing kitchen on a daily basis

Access to our Event vendor database = Time spent everyday for x duration for Admin manager
100+ hours saved monthly

Cost of Time Saving = (Time of Admin manager * Per hour admin manager salary)
Cost of Time Saving = 100*454

Cost of Time Saving = Rs.45,400/month

Cost of Audit = 5000/audit
Number of Audits SmartQ does in a day = 2 (One at cafe, one at kitchen)
Number of working days = 22

Cost of Audit per month = 5000*2 * 22

Cost of Audit = Rs.2,20,000/month

Access = Audit + Time = Rs.2,65,400/month

Perceived Value = COGS + Cost of Time Saving + Access cost + Compliance cost
Perceived price = COGS

Pricing Strategy 1 : Food cost (COGS) model

Lets take example: For 500 employee company, there is a cafeteria with 2 counters. How does the cost look like now

Without SmartQ
Food cost = 100*500 = Rs.50,000/day = Rs. 11,00,000/- (For 22 working days)
Overhead cost = 1,34,032 + 2,65,400 = Rs.3,99,432/-

With SmartQ: We can skip the overhead cost and include everything in Food cost at a lesser price

Food cost = 110 * 500 * 22 = Rs. 12,10,000/-

Pricing Strategy 2: Management fee Model

In this approach, SmartQ does not charge for food directly. Instead, we introduce a Management Fee, making the pricing structure more transparent and cost-effective for clients.

• Food Cost remains unchanged (paid directly to vendors at actual COGS).
• SmartQ charges a separate Management Fee instead of including overhead costs in food pricing.

Significantly Lower Overhead Costs – Admins save over ₹3.5 lakh per month.

Current Price communication

Currently, pricing is not communicated digitally via the website or app. Instead, it is shared through presentations and email proposals, customized for each client based on their budget and meal requirements.
Even in the near future the price communication will still go on proposal decks and emails. I will try to create a landing page for future which can be a hyperlink which can be sent in the mail.

Find the current price slide from the proposal deck

The existing pricing model is heavily menu-focused, where cost is determined by the number of menu items and food COGS, rather than the full service experience. While we have a Silver, Gold, and Platinum model, pricing varies primarily based on meal variety, counter type, and cuisine selection, rather than the comprehensive cafeteria management SmartQ provides.

This model works well for clients prioritizing a premium menu, but for those with fixed budgets seeking maximum value, there is room to refine and introduce a more holistic pricing structure

New Pricing design

Since SmartQ's pricing is tailored to each client’s needs, we are introducing a structured pricing model based on employee count, food packs, and service sessions. This ensures transparency, flexibility, and scalability while maintaining high service quality.

Pricing Strategy

Option 1: Output-Based Pricing (COGS + Managed Service Fee)

• Pay for actual food cost + management fee for SmartQ’s service.
• Best for: Companies wanting transparency & direct food vendor engagement.

Option 2: Full-Service Pricing (Bundled Cost)

• Fixed pricing covering food, operations, tech, and compliance.
• Best for: Clients looking for an all-in-one, hassle-free solution.

Option 3: Custom Elite Plan

• Tailor food service, tech, compliance, and event management to your needs.
• Best for: Large companies needing a flexible, fully managed cafeteria experience.

Deep dive into new price plan

In future when we build the landing page for pricing we need to customize it to our business to a large extent, hence we will build a price calculator instead of a regular price chart.

When someone visits the landing page, we are looking at two types of users.
First, there are prospects we’ve already met in meetings—when they arrive, they can simply enter their details and instantly access the pricing.
Second, There are new leads who are still in the acquisition journey. For them, this page acts as a lead capture tool, allowing us to collect their information. In the future, this can help us engage further by scheduling a meeting, offering a trial, or guiding them through the decision-making process.

Landing page with lead capture:
As soon as people click on the link and come to landing page, they see certain basic information needed to calculate the price. Once the user enters this information, they can click on calculate button which will lead to custom price page.

Once the calculate button is clicked, the below page is shown with custom price calculated according to the data entered by the user: Employee count, Budget, Cafe details and Admin/ cafe management details will directly impact the prices shown.

Reasoning for Redesigned the Pricing Model

Earlier, pricing was solely based on food COGS, limiting how we showcased SmartQ’s true value. The new model expands beyond food, clearly communicating the allied services that simplify cafeteria management for admins. By explicitly presenting vendor management, compliance, tech integration, feedback mechanisms, and special food services, we enhance perceived value and decision clarity for admins.

Key Changes in the Pricing Structure

✅ Beyond Just Food Service – Now includes:

• Cuisines Offered
• Tuck Shop & Vending Machine
• Feedback & Business Reviews
• Special Food Services
• Vendor Management & On-Site Operations
• Technology & Ordering
• Compliance & HSEQ Audits
• Food Events & Pop-Ups

Strategic Pricing Approach:

Three-Tier Model

1️⃣ Basic Plan: Entry-level plan with a "Book a Food Trial" feature, letting users experience SmartQ before committing.
2️⃣ Premium Plan (Recommended): The best value plan, balancing service depth and cost. Positioned as the ideal choice for sustained revenue and client satisfaction.
3️⃣ Elite Plan: A high-touch, customized experience requiring a strategic consultation before commitment.

Ownership effect
For the Basic Plan, we leverage the Ownership Effect, allowing admins to experience SmartQ’s service firsthand without any commitment. By offering a free trial, admins feel in control of their decision while getting a real taste of our quality and efficiency. This hands-on approach builds trust and familiarity, giving us ample opportunity to showcase our full potential before they commit to a long-term partnership.

System 1 vs. System 2 Design for Conversion

• Basic Plan → System 1 Design
• • Designed for quick decision-making.
  • Users need food service with minimal complexity.
  • Straightforward choice with a "Book a Free Trial" option.
    
• Premium & Elite Plans → System 2 Design
• • Requires in-depth understanding of services & long-term impact.
  • Admins need to process detailed information before making a choice.
  • "Book a Meeting" allows for a structured consultation, ensuring they grasp all aspects of SmartQ’s services before committing.

I am looking forward to implementing this at SmartQ. By this new pricing strategy hopefully increases revenue at SmartQ.

That's all folks!