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Mindful Chef: How to win the subscription box race | The Grapevine S1:3

13 February 2023

“Your brand is not what you put down on a piece of paper, it’s what people say about you”

Supercharged referrers, retention incentives, the impact of discounting… On this week’s podcast, Ed and Tom meet Arthur Guinness, Head of acquisition at Mindful Chef.

It’s one of the best conversations yet, and could have gone on for a lot longer!

Here’s what they cover:

And in a first for us, the guys come up with a new experiment to test on air. 

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Tom
Welcome to this week’s episode of The Grapevine brought to you by Herdify.com. This week, we’ve got a great brand for you from the UK. That’s Mindful Chef. And we’ve got Arthur Guinness. Arthur, say hi,

Arthur
Hi, so I’m Arthur Guinness, I’m the head of acquisition at Mindful Chef. I have about 10 years experience in performance marketing. And since I started my role at Mindful Chef, about a year ago now, I’ve taken on a broader remit beyond performance marketing to cover CRO, SEO, CRM as well as media above and below the line.

Tom
Glad to have you! I think, obviously, as we record, it’s the second of February, we’ve just come out of January the month where you know, everyone tries to be healthy, drink less, eat, eat better. And also, you know, in the news this week, there’s been a few things around food, particularly in the economy, right, that we’ve had people having to trade down with brands. So you know, with all of that going on, thought this would be a really good time for this conversation with with you. So really looking forward to kind of getting stuck in there. Before we properly dive in. Um, as usual, we’re joined by Ed, Ed, how are you my friend?

Ed
I’m good. Thank you. So I’m looking forward to really interesting conversation, as you say, quite timely as well. Yeah. Cool. Cool.

Tom
So let’s jump in. As well as reading the Mindful Chef sustainability report, listeners will recognise we wax lyrical about community and word of mouth. And I was really interested, Miles and Giles, your founders, they chose to end the report by drawing big attention to the power of your community. And I really kind of wanted to sort of get your view on how you see that community aspect of of the business and how that fits in with your role of you know, that broad acquisition remit?

Arthur
Yeah, absolutely. It’s hugely critical to us. I think it’s easy for people to talk about community but for us, it’s really a driver. So one example the demographics that we go after acquisition wiser are sort of older than myself and a lot of the team here. So we always have to remind us ourselves, with what the customer is like. One very obvious example is, they’re all on Facebook, they’re not on Instagram. So if we think about sampling in our boxes, we will then go and get kind of honest feedback in those. Facebook, I think that’s an example of our community that’s really valuable. There are lots of others, but it’s interesting, a Facebook, it’s we call it the Mindful Chef community on Facebook. And it’s very active, and it’s an example. It’s one of the bigger, bigger example more widely used examples than all the brands out there and it’s, it’s kind of a truer demonstration of us.

Ed
That’s really interesting, I was just wondering how that interacts with your sort of wider customer base. So do you have to try and get people actively involved in that community? So, you know, point out to people when they join or in your marketing?

Arthur
We do Yeah. So part of the onboarding flow is to signpost them towards the Facebook group. Obviously, not all, not all. Mindful Chef customers will want to be on that group and will be active on Facebook too but a good portion do end up joining and doing not getting involved you know, cooking and you know, eating these recipes is something that some people feel is that they want to talk about. Having a place in which having a community in which they can do so is good. I think what we could do more of is turning social in that way into supercharging it on a referral side of things. We know from the post signup surveys, that over 45% of our signups come from referrals. But we only see about 2% using our referral mechanism. And so we know that there’s a huge opportunity to get people referring more often and telling their friends to sign up more often.

Tom
That’s a great stat that people are self selecting, when asked that it’s a referral. But you know, actually a referral programme on itself is actually only referring 2%, I think linked to that. And then the other piece, I was really interested in the, in the sustainability report, and we’ll make that available as part of this in the links for people who want to have a look. But you know, you talked a lot about their sustainability brought across the different initiatives, but one that jumped out to me was about healthy people, healthy planet. I don’t know if you remember that something that we’ve talked about before, but there was a report a few years back about do your friends makes you fat, right? And really what it was was talking about is those near and dear to us, those close to us influence our behaviours, right? So particularly around health. And this just got me again, back to this kind of point. We’re talking around with community. Do you see that community helping you get through that community referral piece and getting more people to be healthier? Do you see community as being kind of integral in helping you achieve your sustainability goals as a business?

Arthur
Yeah, definitely, I think it’s one of the goals is one of the areas that we need to get better at, I think always there’s opportunity to get people your brand is is not what you put down on a piece of paper. It’s what people talk about, in private what they think in their mind of you. And it’s those private conversations between friends, I think that is the biggest driver of acquisition for us as a business. So getting people who are our customers to have those conversations is the biggest challenge my team and I have for driving acquisition.

Tom
How do you think about that, like that? That sounds like a big challenge. I’m intrigued. It’s, it’s actually quite rare that we hear people thinking like that. So I’m really intrigued. So you’re obviously deep into that thought, to expand on that, or, or, you know, you still trying to figure that piece out?

Arthur
Yeah, definitely still trying to figure it out. Definitely trying to think, you know, I think I’m sure we’ll come on to this in more detail. But an example is, well, it’s messaging, you know, an example is the cost of living crisis, related to the cost of delivering groceries, which I’m sure you’re gonna have questions about, but it’s demonstrating value. And one of the things is the discount code that we give to new subscribers, which is 25% off your first four boxes. Now that we’ve done so much research and testing into what the best level of discount this is, for driving, retention, essentially, all the best, lifetime return on adspend over a lifetime return on discount value. And, you know, 444 box discount is hugely better than a 2 box discount, because getting someone to really commit to the lifestyle, by incentivizing them to do so over a longer period of time. improves their lifetime retention massively, and therefore we think improves the chances that they’re going to talk to their friends about it. thing that’s, yeah, definitely haven’t figured it out. It’s something to look for more, but

Tom
it sounds definitely is it you’re, you’re obviously thinking in a behavioural mindset, though, you spoke there about change behaviours. And I guess that’s a big thing that you’re asking people to do, you know, move away from how they would traditionally, you know, go to the shops. Well, I think the online supermarkets have got a job at changing people’s behaviour, right, you know, getting people to change how they buy food. So you’ve got a behavioural step beyond that. So really interesting to hear that you’re thinking about not just incentivizing the purchase, but how do we get people to Yeah, yeah, to change their choice their behaviour, I think

Ed
Sorry, go on Arthur.

Arthur
No, no, you go Yeah,

Ed
I was gonna say I think it Yeah, I think it’s interesting that you’re thinking about it as a behaviour change, in particular, like just the change to, you know, a subscription to food box. Right. But I did notice on your website, you have a stat that I think it was two thirds about of your subscribers, or come from another food box or have tried other food boxes already. Is that? Is that something you actively target? Or is that just a consequence of their people who have have made the change already?

Arthur
It’s a good question. There’s also the the other part of that question is, is that just a symptom of the fact that there are two big players in this space and therefore, into us, there’s quite a chance there, try one of those, those other two brands, what I would say is, we have a very different proposition, and we’ve kind of helped them on that. Whereas they are both slightly fighting over being the cheapest. So we haven’t compromised on the quality or that or the health credentials, we try to occupy a place in the market that is higher end, and healthier. But that is we’re in a difficult space, obviously, with the cost of living crisis, and people looking to, as you said, earlier, trade down. And we’d say, you know, so therefore, what we’re trying to do is really nail down messaging around the value that we get from a my butcher box. And you know, what, what we are not necessarily trying to say is that we’re cheap. But we are saying we’re good value. And I think those are the two very different things. You know, what? I know as a customer, it’s good value, because I’ve tried it. And I’ve been, I’ve been subscribed. And I’ve been getting a box every week for nine months. But someone who’s never tried us before. It’s very, the challenge is to get that value, persuade the value. And without trying it. That’s pretty difficult.

Ed
I mean, I think that that’s somewhere where you’re, you, as you said, already, like your customers are the best people for that. Because value is, is relative, almost Yeah, right? One person’s value idea of value is not someone else’s. So if if you can use your current customers to put that in a framing to their friends that is similar to that, to the way that they think about values. And that’s kind of a shortcut to having a very diverse set of messaging, which explains the difference between value and cheap. To the broader audience.

Arthur
Yeah, exactly. And, you know, we have all sorts of messaging hierarchy of what we’ve, what we’ve tested, and what we know, does drive better conversion rates, for example, on site, and for us, it’s health, convenience, and the provenance and quality of the ingredients, probably the top three, but things like sustainability and ethics are maybe less important, from a DR perspective, but in but but we know that those are really important to existing customers. So making sure those messages are landed to existing customers, we’ve got to increase the chance of them talking about Microsoft to their friends. So the messages that we are landing to our existing customers in order to promote conversations to their friends, it’s very different to the messages, we’re landing to people landing on our site, for example, who are prospective customers,

Tom
the guests that, you know, there’s gonna be a bunch of people that will stop using the service, no, because they want to, because they can’t afford to, right, you know, the benefit of what you’re talking about there is it helps keep your brand top of mind, right, so when we come out of this in, you know, 1218 months, and you know, they, you know, they’ve got more money to spend on on items, you’re back at that you’ve maintained presence in their head, even though they’ve been paying you so, you know, you’re one of the first things that they turned back on, harnessed by your community, I guess, is that is that how you think about it?

Arthur
Is and I mean, as a customer myself, I, I find myself spending a lot less money as a Mindful Chef customer than I would said, and that’s another that’s another piece of value that is very hard to, to explain first. For example, I get one fewer deliveries a week or two fewer deliveries a week, which are now you know, the cost of living is it’s hit one area, it’s definitely the cost of a delivery, which is seems to be about 50 quid to go for two days. So so if you think of that, like that, I’m saving you know, 100 quid a week almost on delivery. It you know, and there are other areas that it’s indirectly saving money, and I think this is the rest of the box as a whole it’s saving money all indirectly, not just versus a supermarket shot. And those indirect cost savings are very hard to, to explain in one piece of creative.

Tom
Is this a brilliant example that because you are a customer, so you won’t be the only customer that picks up on that. Right? So you can always imagine that conversation with some mates. Yeah. You know, what you did for dinner on a Friday night while not getting a delivery? Because it’s 50 quid. You know, I’ve, I’ve getting this instead. And you can probably as you you’ve, you’ve intimated there, it’s not the sort of creativity that goes with your brand, you know, switch from delivery to us. Yeah. But your community is kind of having those conversations, which I think is Yeah. Isolation.

Arthur
And that that point around? Those Yeah, it’s for these sorts of things that might go into into casual conversation that would would look terrible in AD, if they would, you know, if you put that into a piece of paid social advertising, or it’s very hard to, to make it look like high end food brand ad where you wouldn’t see Waitrose doing that, with what I mean. Having really effective D2C paid media, but also play into those those kinds of spaces that we were just talking about is a challenge.

Tom
Opening up a little bit like you opened up and said, you’ve moved from the performance world to acquisition, they, how much does performance make up of your, your acquisition work? And, you know, what are the other core channels that you’re working across? And then the final part of a three part question, which is terrible interview etiquette, is I guess, how would you measure which is working across those different ones?

Arthur
So yeah, performance marketing is is a large chunk of our budget. The next biggest area of investment is above the line media. So for us, that’s t TV, podcasts. And the reason we do podcasts is that the host read the host reads, feel really natural, and we send it out and they just, they land really well. And then we do a bit of out of home and a bit of bit of Borden and YouTube and things like that as well soon. That whole above the line section is sizable, but performance marketing, no matter and Google are narrow, they are big for us. And then beyond that, we spend a lot of time and energy on CRO. And that’s hugely important for us. So obviously, it’s affecting every channel, and it’s impacting performance across the board. And then CRM is obviously an ever growing space for us. So in the context of kind of driving profitable growth, which I think lots of different companies are talking about these days, we are looking to diversify our travel mix, especially into areas that we think can drive scalable performance like CRM, like partnerships. So there’s quite a few partnerships that we’ve done. You may may have seen our partnership with Vitality, health insurance, which it has been a really successful one. I think partnership partnerships is one that that if you do it, right, I think it can be hugely, I think they can deliver more than the sum of their parts. For if their natural, near what you don’t want is to go too far down this road. And you know, in fashion, I think we’ve kind of gone past the gone past this peach colab. And there’s probably some natural, smashing together brands and those in that space. But, but, but if you do it naturally, and you have a good crossover audience, I think partnerships is scalable, and very efficient.

Tom
Yeah, I would agree. I think, you know, especially we see it in other brands, when Rob goes back to the community, right? When their communities overlap. There’s a there’s a natural benefit to both brands, right? Because, you know, you’ll have customers that use vitality and new and then all of a sudden there’s cross pollination between two communities as opposed to when the communities have no overlap. It’s too So it makes a big headline, but actually the long term gain, I think, is less quantifiable. And how do you kind of measure? across it? You know, you’re doing a lot effectively, there’s a lot there’s a lot of activity and then you know, you as someone who heads up acquisition, yep. But how do you measure? How do you measure what’s working working for you from from an acquisition point of view, particularly.

Arthur
So my predecessor is very interested and on the on the topic of, of attribution expert Frank Jarrell, and he set up various models internally that we still look at and use, I’d say, my view on attribution is that we should never have a single source of truth. That is, by the very nature of all setup, they will have various assumptions or ways of being set up that will, there will never be 100% Correct. You know, as you as you get, as you scale performance channels, there are data driven attribution models that will, that will get close to, you know, having a good stab at that at attributing value correctly. But my view is that you should always have multiple ones that you can compare and contrast in different contexts, which is a very difficult internal communications challenge when dealing with different stakeholders, and but ultimately, I think gets you better results. So yeah, we have multiple models we have, because we have media mix modelling that we do once a year only, but it’s hugely valuable. And we have, we have that we have our code attributions, we have a last click attribution through Google Analytics, we have a couple of other models that we use, and then we build our own. layers on top of that, to build a few different reports.

Tom
For that, and that number, you talked about earlier that 45% come from referral. When was it? It was post sign up

Tom
survey? Right? Sorry, yeah, that’s another one. So if your post says that

Tom
I’m intrigued whether you can see that in the in the other channels, if that makes sense, in terms of how you join those two things together, people are talking about how they found you, and from what the rest of the models are saying.

Arthur
So we don’t we don’t join it together. But it is just a separate reference could be that one. There’s my boss, the CMO, Giles, and founder, he he looks at that one as being the most accurate, which I think, you know, it’s fair because it for a customer. Let’s just say. I think that’s, you know, I agree, I think it’s probably the most valuable one we have. And as as we know, from hearing what other brands in this space, say it’s similar, that referral is the biggest driver of acquisition.

Tom
Do you notice any anything different about the quality of those customers? So the ones that, you know, self self select is coming from a referral? Do they? Do they have an are higher LTV? Or do they? Do they stay around? For longer? Or I don’t know, are there any are there any sort of value attributes that you can see when you look at those customers versus non referral customers?

Arthur
So they’re there, because they make up such a large portion? They’re quite well, they’re quite close to the sort of averages. Snow, then they’re not wildly different from the average kind of the lifetime value or retention rates. What is interesting is in the past, when we’ve tested more generous incentives, we’ve seen early lifecycle retention drop drastically. So there is a you have to we have to be careful about giving customers too much incentive to refer because what they might do is is for quite poor customers who are going to discount it, and then never again, but Well, I think what would be a really nice way of doing it would be to build in you know, as you might do with a sales team, for example, building some retention incentive into the into the referral programme, but that gets a lot more complicated.

Tom
Here’s your here’s your discount if that when they order their sick box type thing.

Arthur
Yeah, exactly, it probably gets a bit too complicated for our very own, but I think loyalty programme incentives, and, you know, linked with the include referral programme is definitely the next step. And finally, we want to kind of build on you. Okay.

Ed
I was just interested Do do you find there are sort of, do you have sort of super referrers? You might call them so people who refer a lot more than others within your referral programme, or is it? We do have more natural? Yeah,

Arthur
yeah, we do. And as yet, we haven’t such of that, again, I think, I think there’s opportunity here for us to, to get better. You know, we talked about community earlier, one of the things we do is we get our customers into our office, and we talk to them, and we, we test recipes with them, and when they meet our fans. And they love it, and they give us, you know, good qualitative data on our on our ESPYS as they test them in a live environment. But but you know, I think probably the, what we could do better is like, is get them to bring their friends and then sign their friends or both, or, or talk to them about the referral prayers, or get those customers who are really engaged because they, they’re so engaged, that they come to our office and test our recipes, get those ones, turn them into super referrers. Because there are plenty of them. I think we you know, there’s a lot of a lot of demand for those sorts of days that we do here at the office. In our studio,

Tom
we also use your cost, you’ve used your customers in ads as well. Is that right?

Arthur
Yes. So we put out some, some cons to say that we would, you know, we’d love to get some UGC style videos of them in their kitchens, maybe cooking or maybe just talking about why for Chef and yeah, we get and we gave kind of credit to anyone that sent in videos and turn those into ads for paid social credit, which did perform quite well. Because there are real people there. You know, real testimonials.

Tom
Data, just as you say, and I was thinking about that. Did you? Did you do any testing with showing those ads in the communities they live? So you know, we said where I live, you know, I send you guys a video you kind of put it in in my area and say, here’s here’s Tom who lives in your town. area and target target that ad to use in our town. Did you Did you do any testing like that? It would be a fascinating experiment.

Arthur
We didn’t get as clever as that. It’s a big shout though. I think we could. Yeah, so our approach January, which we’ve just come through was our highest spending period for acquisition and we were using very broad targeting for our paid social as Meta kind of pushes you towards these days in order to be able to using their their systems. So we didn’t go we didn’t do any really granular targeting on on with our paid social, but I feel like that could work.

Tom
Yeah, sorry, was just a random thought be quite cool to although I’m sure if my mates saw me advertised the box they just don’t like me, so it probably wouldn’t have worked. But for most people, they will get some Yeah. Okay, cool. That makes sense.

Arthur
Worlds it’s like, putting you into or you’re putting a video of you into all your friends phones. Through their Instagram. It’s terrifying.

Tom
Yeah, exactly. And we know social proof works. But we actually associate with people who have more things in common with us. So actually, if you could land on a website, now there’s some compliance issues here. But theoretically, at least if you collateral website and all your mates were there or people you knew or or people in your town or people in your you know, your rugby club, whatever it might be. You’ve got social proof kind of turned up to 11 because you kind of resonate. It’s not just people who are talking about it. It’s people who you closely identify and relate to, which is why I made that was I actually yeah, you’re getting UGC content delivered in the towel would be an interesting and interesting thought experiment. So sure, okay. Cool. Makes a lot of sense. And that’s all I think from my side. Ed, anthing else from from your side?

Ed
No, I mean, that was fascinating. I was just to pick up on that that point of the end there. I think, I think is your poll now. That one of the review platforms, I think, is Yotpo, they’ll deliver reviews by IP location? Well, I assume they use IP, you’re right, maybe you have to sign in, but they do deliver, like location based reviews. So it’s like, you know, Dave, from Bristol, said this about this product, try and kind of connect people more with that review. And also, like, there’s loads, there’s lots of social reasons that this works really well, especially if you can, if you can harness or you find an area, which has like, which people really associate with, then they naturally associate with the other people in that area. Right? Yeah. And they kind of consider themselves more similar to them. So it’s like, oh, that might fit into my lifestyle as well.

Arthur
It’s something that I know that some some ecom and subscription brands do in this space is when you’re signing up, they say, you’re joining the say, I’m signing up from Kensal Rise, and you’ll be joining 500 other people in Kensal Rise. Sort of show, you know, even if that number 500 is completely made up. But I think it’s been shown to drive conversion rate. And so people like to see, yeah, that people in their geographic area are using the product, which seems to be quite arbitrary. But But yeah, it does. Yeah, kind

Ed
of, I think it helps with that sort of, would it work for me? Yeah. So I had a particularly of the behavioural change, right? Is it gonna? Is it gonna save me money? Is it going to be something that I’m going to get value out of? Yeah,

Tom
I guess just as a, I think, it’s been a fascinating conversation that’s gone many, many different ways. I think the big takeaway, for a lot of me a lot of my takeaway there was around how powerful community can be. And I think what I realised the beginning is, here’s how you you hit head on thinking the word community is massively overused. And I think, you know, how you how you talked about it, but not just from an acquisition point of view, you know, the fact that, you know, as I say, we’ll link to this your sustainability report that how that’s going to just help your business, you know, not just be a profitable and successful business, but how it’s going to help give back to, to, you know, the environment effectively, which I think for somebody that I do think the word is overused, it just does show how super powerful they are. So yeah, super cool conversation. Thank you. As people were no, we as as we end, we just have a little bit of a lighthearted recommendations, we talk about word of mouth a lot. So I’m going to kick off. And I’m gonna go with a TV show this week. And it’s more because, well, we’ve been joking a lot with mates just around how hard it is to find anything decent on all the various streaming services anymore. So I’ve gone back to the old school shows, I’m rewatching Sopranos, and I’ve forgotten how good it is. I should say, oh, for those that you either haven’t watched it, or haven’t watched it in a long time, it is 20 years old. Now. Sopranos is gonna be my my recommendation. So enjoy. Ed, you go next.

Ed
Okay, I’m gonna start by apologising for also recommending a TV show. This is this wasn’t prep. But I’m gonna recommend a TV show that I really enjoyed when it was first on 20 years ago. And you have it is one of the few things you’ve not been able to see anywhere. Until recently, and it’s just got a new run is back on BBC Four, and it’s on iPlayer. And that’s it, called Eearly Doors. It’s a comedy set up in Manchester is written by some of the same people that wrote the Royal Family. So it’s that sort of vibe.

Tom
Nice. Okay, there we go. And it was I don’t know, there’s a good coincidence there that they’re both about 20 years old. Arthur’s turn –

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Tom
How do we get ahold of that? Is it is it direct? Yeah, we

Unknown Speaker 34:54
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Tom
Co well there’s caught two great TV shows and some alcohol free beer to drink while you’re watching them so cool. Thank you everyone for joining us. We’re gonna we’ll call it and then there as usual we’ll be back in two weeks if you thought this episode was useful like and subscribe. Also, if you’ve got any, you know, ecommerce direct to consumer marketers out there who you think would benefit from all this knowledge, share, pass it on. And yeah, we’ll see in the next episode.

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