The food industry is perfectly suited to social media interaction, since purchase decision is significantly influenced by social referral. For the most part, though, this remains an under-exploited opportunity for the food sector, with the most popular “owners” of online interaction being content publishers, entirely disconnected with the physical product.
Flying in the face of this, start-up grocery delivery service Hello Fresh have effectively utilised social media as a vehicle to enhance and grow all aspects of their customer experience. Their learnings are certainly applicable to companies from any industry that sees the broader potential of social media as a potential driver of differentiation.
Hello Fresh is a revolutionary grocery delivery service that delivers boxes of step-by-step recipes and fresh, local ingredients to thousands of homes across the United Kingdom every month – a big step towards their mission of bringing convenient, exciting and waste-free home cooked meals to the UK. Launching in January 2012, their rapid growth has been almost entirely fuelled through social media. Their innovative approach landed them with the HP Smart Business of the Year award just seven months after their debut.
From the start, Hello Fresh has recognised social media’s importance to their business. In April, Hello Fresh was amongst the first adopters of Facebook’s new ‘Offers’ feature when it debuted in the UK. In just three days, over 570 Facebook users had organically claimed the offer from a captive base of just 2000 people liking the brand.
Hello Fresh has built a strong analytics function that goes beyond the superficial ‘reach of fan-base’ or ‘number of likes’ metric to measure the comprehensive ROI of their social media activity. The result: Social media has grown to take on a critical role across the business, as a key channel not just for customer conversion, but also for customer life-time value and issue management.
For customer acquisition
- Conversion incentives - by alternating “viral-potential” content with relevant conversion opportunity and targeted advertising. When intertwined with “viral-content”, not only does the social reach of a discount code increase, so too does the % conversion of that reach
- Stimulation of referrals – Hello Fresh offers an incentive programme for existing customers to refer their friends and family to the service. To-date, around 25% of referrals have been generated by their use of Facebook’s in-page referral app
- Social media partnerships – by approaching well-suited partners Hello Fresh have generated strong and cost-effective co-promotional opportunities
- The Result: Social media has subsequently grown to become their single biggest customer acquisition channel
For customer retention
- Use of “nudge” incentives - customers are encouraged to interact with each other, share photos, contribute to new recipe ideas and give feedback. The ROI of this activity is staggering.
- Maintaining an active community presence – responding and engaging with the Hello Fresh customer base creates a strong sense of community and, most importantly, increases stickiness. Customers following Hello Fresh on social media have a customer lifetime value roughly 20% higher than their non-social counterparts. Customers who go one step further and actively interact have a lifetime value which is over 60% higher than average.
- Co-creation of content – customers are encouraged to submit recipe ideas for incorporation into their recipe repertoire. ‘Kelly’s Layered Aubergine Salad’ will soon go to print and hit customer doorsteps. Hello Fresh make sure to follow through with public recognition via Twitter and Facebook to incentivise repeat behaviour with public recognition and approval from the Facebook community
- Customer care – customers are converted into brand evangelists and frequently take the initiative to answer other customers concerns or queries. This has allowed Hello Fresh to maintain their customer service headcount whilst growing the business 50% month-on-month
- The End Result: By continuing to encourage new customers to engage with Hello Fresh on social media, overall lifetime value of customers has continued to grow – a benefit which is amplified by the broader brand exposure that follows from access to their customers’ social networks.
The headline result of this is customer base growth of over 50% per month since launching.
Hello Fresh has learnt that innovation is critical throughout - right from the content used to inspire interaction, through to experimenting with new channels and ways of engaging customers, new and old. The team are currently piloting the use of Google Hangouts, as a way to offer live cook-a-longs for highly loyal customers. It is this constant willingness to try out avenues that will keep Hello Fresh at the top of the social media game. As social media itself develops, it will be interesting to see which avenues Hello Fresh pursue to bring an immersive, unique brand experience to their consumer base.