Here is what we believed at the beginning of the week…
Eat Delish has roughly 100 early adopters who are currently using our weekday dinner subscription service at least 2 times every week. New customer acquisition has been particularly challenging given the limited resources for marketing or to run a formal campaign. Based on our discussion with Jeff Goodman during past class weekend, there are two ways of going about this problem.
Option-1 - Create more value for early adopters (A2->M1): Early adopters of Eat Delish especially working families with kids have been asking us to provide kids lunch boxes in their Eat Delish dinner bags as they don’t have a good consistent solution for lunches at school. Anecdotally mornings are even busier than the evenings. Parents need to get their kids ready, make breakfast and then also prepare their kid’s lunch boxes. If we can provide a solution to this problem apart from taking care of the dinners on weekdays, we can establish better stickiness with these customers. Eat Delish can be the complete week-day meal solution for these families. The value created by Eat Delish will be higher which will encourage an incremental number of early adopters to refer us among their social circles which will help us unlock the customer acquisition challenge.
Option-2 - Expand same service to new markets (A1->M2): Apart from schools and corporate offices there are new markets, for example, Caltrain stations and large apartment complexes that we could also consider serving. This option is not feasible and doesn’t fit well in our hub delivery model.There are a number of large apartment complexes in the bay area where families live with their kids. These are dual working high income families that have similar challenges when it comes to weekday dinners. We are not sure if delivering food at apartment’s leasing office will work or not. If the demand is high we can consider having a dedicated delivery van for that complex. This will require a dedicated delivery person at a given complex or caltrain station which has currently been cost prohibitive for us. This option can surely be considered in the future.
Here is what we did…
We ran an online survey for our early adopters whose kids go to schools that do not provide lunches. The goal of this survey was to to understand how strong the need was for us to serve kids lunch kits along with the Eat Delish dinner bags. We wanted to understand 4 things as part of this survey.
- Is there a real need for kid’s lunch kits among our existing customers?
- If we provide a service that met their needs, will they be willing to use it as an add-on to their current subscription
- Will the parents help us design these lunch kits?
- How much will they be willing to pay for such a kit?
We did a follow-up in-person discussions with a selected set of parents to understand and learn more about the specifics and feasibility of these lunch kits.
Here is what we learned...
This survey struck a chord with our existing customers. Although the survey is still active, in one week we received 30 responses. Roughly 70% of these respondents acknowledged that they need help for planning and preparing their kid’s lunch boxes. 60% of these parents said that they would definitely buy this add-on and 30% said they might subscribe to it in the future.
We received personal emails from the parents on how much will they need something like this. Most schools do not provide lunch and the ones that do, have tie-ups with some 3rd parties like Choice Lunch that are not organic and appealing to kids and the parents. Parents still want to pack the lunch box in the morning but do not have time to prepare a healthy lunch consistently. Based on the survey responses and the personal meet-ups, here are some suggestions on what these lunch kits could contain.
- Cauliflower Mac & Cheese, Grilled Chicken / Tofu & Snap Peas
- Chicken Salad / Cucumber Salad Sandwich, Veggie Sticks & Carrots
- Chicken/Veg Noodle Soup, Garlic Cheese Bread & Steamed Veggies
- Brown Rice with Veggies & Egg, Yogurt dip, Fruit
- Chicken Shawarma/Paneer, Hummus with Quinoa Chips, Carrots & Peppers
As a result, this is what we are doing...
After speaking to class mentors and speaking to our customers we think that increasing our current customer value is the right next step. Here are the key reasons why we made this decision,
- Creates more value for the existing customers and further differentiates Eat Delish from some of the existing competing businesses like Munchery, Sprig etc.
- Increases revenue - get more from each customer (increase our top line)
- Improves margins - use existing kitchen & staff more efficiently (helps with unit economics)
- Increases retention and stickiness (make early adopters our champions and advocates)
Here are the next steps...
- Design recipes for 4 lunch box kits
- Perform a trial run with the existing customers, ideally before the next school year starts
- Plan a referral campaign around lunch-kits
