• 15 June 2017
• Yoni Barzilay

• Posted in
• Customer Retention
• E-Commerce

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Food delivery startups are reaching a moment of truth. After receiving $5.5 billion of collective funding in 2015, the explosive industry is beginning to consolidate, as the vast number of startups struggle to stand out from competition.

The space is fiercely competitive: there’s only so much food a person can consume, and the plethora of options leave customers ready to cancel their membership for the next new thing at any moment — making retention a food startup’s most important metric. And companies in the industry are finding that they can’t develop loyal customer bases on flavor and convenience alone.

Freshly was launched in 2012, and has recently raised a $77 million funding round from food and beverage giant Nestle. With 150 employees, Freshly is already active in 28 US states. The company delivers hundreds of thousands of fresh and healthy ready-made gourmet meals to customers’ homes every month. Given the intense competition in the space, Freshly realized early on that one of the key success factors in its field is customer relationship management: those food delivery brands able to develop strong, long-term relationships with a large and loyal customer base will edge out their competition.

Freshly was already delivering an ideal product – healthy, delicious, chef-cooked, ready-to-heat-and-eat meals delivered to each customer’s doorstep. The company was looking for customer retention software that could leverage all available data and enable the company to communicate effectively with each individual customer. Specifically, the company wanted a solution that would allow it to:

• Ensure that every customer receives only communications that resonate with them – no more blasts and unsubscribes
• Increase long-term customer retention and satisfaction
• Increase customer spend and lifetime value
• Drive more actions like meal ratings, which in turn helps Freshly improve their product

The Optimove Solution

Optimove’s Science-First Relationship Marketing Hub has enabled Freshly’s marketers to identify more than 50 granular customer personas within the customer database. Taking into account past customer behavior and predictions for the future (e.g., product preferences, spend levels, customer future value), Optimove automates the delivery of highly relevant messaging to each individual customer.

Customer communication campaigns are run with automatically designated control groups to accurately measure the effectiveness (uplift) of each campaign. By treating every communication as a measurable “marketing experiment,” along with the help of Optibot (Optimove’s AI-based marketing optimization bot), significant improvements in key performance metrics were realized in less than a month, with further improvements being observed in every subsequent month. By leveraging artificial intelligence, advanced data science and a metrics-driven approach to customer retention, Freshly uses Optimove to communicate with every customer in the most relevant, timely, emotionally intelligent and effective ways.

Benefits by the Numbers

Using Optimove to automate their customer segmentation and messaging, Freshly achieved measurable increases in every key customer metric, including:

Moreover, Optimove’s customer model has given Freshly the ability to derive data-driven insights about customer behavior. For example, the company has learned that customers who order meals with a higher rating in their first order have a significantly higher LTV, as do customers who rate meals and customers who change their meals in the second order. These insights continuously serve to align the company’s strategy.

Nate Champion, Director of Retention Marketing at Freshly, commented that “Optimove allows us to combine our marketers’ creativity with cutting-edge data science to effectively build long-term customer relationships. Optimove is an awesome secret weapon in our highly competitive space.”