Customer retention in the EDtech industry: The case of Tung Viet technology

Abstract

Tung Viet Technology Co., Ltd., which was established in 2015, has transformed from a supplier of interactive hardware to a lively Vietnamese EdTech provider. In 2019, the company split its business into two main areas: one is the leasing of smart devices to schools and the other one is the distribution of educational software, with the most remarkable being the MozaBook platform acquired from Hungary. This change has put Tung Viet right at the center of Vietnam's national digital education reforms, where hardware and software are combined to offer the most complete classroom technology solutions. Although "the EdTech market holds a great potential, the Smart Education division of the company has been a continuous underperforming area. MozaBook's revenue fell down from VND 5 billion to VND 2 billion during the years 2021 to 2024, "which means a compound annual decrease of 26.3%. Even worse, customer retention dropped from 55% to 28%, which is far below the average of 60-65% for Vietnamese EdTech. The problem is not with the product—teachers usually rate MozaBook well in terms of features—but with the lack of a structured" post-sales engagement and customer relationship "management. The sales team informally takes care of the customer care in the company "according to internal stakeholders, without any specific function for monitoring usage, tracking renewals, or keeping in touch with customers after the onboarding process. The investigation into the causes revealed four main drawbacks which were the problem of customer retention. The first drawback is that customers are looked after by the sales department informally and their performance and sinks remain acquisition-oriented. Secondly, the company has no proper system to track usage and engagement or to monitor and identify the decline of customers' activity levels early on. Thirdly, the company does not have customer data infrastructure, which means that it cannot make insight-driven improvement decisions. Finally, the company has no customer success department to manage retention activities, hence the responsibility for renewals is spread out and reactive. In combination, these factors contribute to a decrease in customer loyalty and a reduction in revenue stability. Two strategic options were measured to solve the problem. The first one, the establishment of a dedicated internal Customer Success Team, would lead to the creation of a specialized department that would be in charge of onboarding, providing proactive support, and conducting data-driven renewals. Whereas this option is to be effective for long-term CRM maturity, it still "requires a "considerable amount of investment (around VND 300–360 million yearly) and at least "three months for recruitment and setup. The second option, which involves changing the sales workflow to include customer success checkpoints, is the less costly and more practical option. It entails training sales and support personnel to perform structured follow-ups, to use inexpensive CRM tools like HubSpot Free or Google Sheets, and to" incorporate retention KPIs and small performance bonuses. 2 As a result of considering viability, cost, and compatibility with the organization, the second solution was selected as the best short-term strategy. It matches the company's limitations regarding resources, helps to create a customer-focused culture within the company, and has the potential to produce measurable improvements in six months. Internal interviews further backed up this decision-the CEO and sales team see the workflow redesign as immediately doable, whereas the customer support staff consider it as a step towards a future dedicated Customer Success function. Tung Viet could immediately boost customer retention by 15-25% through the adoption of customer-success principles in the sales process and will at the same time build up the necessary data and processes for the full assimilation of CRM gradually. The end result is that the solution offers a well-planned and eco-friendly way to sustainable development, by turning Tung Viet’s customer management from being reactive to support and to making proactive engagements and acquiring long-term partnerships.