ButcherBox Business Strategy Development

Background and Introduction

As Americans continue to drive demand towards healthier and environmentally aware foods, start-ups dedicated to serving these individuals are sprawling up everywhere. More people are also starting to order meal prep kits that are delivered at their doorstep. Nielsen found that meal kit spending is growing at a rate three times as high as other food spending outlets, 9% of U.S. households (10.5M) have tried a meal delivery kit and 25% of U.S. households (30.1M) said they would consider ordering a meal kit in the future (Nielsen). Coupled with a recent surge in food delivery services, ButcherBox has found a niche in this market. ButcherBox serves as the premier meat delivery service providing 100% grass-fed beef, free-range organic chicken, seafood and heritage bred pork right to your door. With over 30 million dollars in reported revenue within a short two years, popularity of the company is surging (Acceleration Partners). However, with all of this success, ButcherBox faces issues in the digital marketing space.

A strong online brand image is important for solidifying one’s presence in the digital world. ButcherBox is battered by poor reviews and holds a rating of two stars on Yelp and the Better Business Bureau as a result of inadequate door-to-door delivery services and other issues such as damaged meat upon arrival, substandard packaging processes, a lack of tracking transparency of orders and poor customer service. 82% of Americans have reported that they sometimes read reviews before purchasing an item, so it is important to improve ButcherBox’s overall ratings on these platforms that have wide reach (Smith). 

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While ButcherBox has found a timely niche within the food delivery market, other startups and more established meat brands continue to compete directly with ButcherBox. Similar meat delivery services exist such as Carnivore Club (Financial Times). On the other hand, well established brands such as Omaha Steaks rival ButcherBox in the packaged meat space. While the former two are quite small with revenues each under $10 million dollars, Omaha Steaks, the renowned retailer of steaks, seafood, and food gifts, had revenues of over $450 million dollars in 2018. (Omaha World-Herald). While falling somewhere in the middle, Butcherbox is poised to continue to grow.

With that said, ButcherBox definitely has obstacles. However, its potential should not be overlooked. With the help of our team and the proposed recommendations, ButcherBox may realize this potential moving forward and continue to grow their already prosperous company.

Proposed Strategy – Outline

Coupon Slips – Yelp and the Better Business Bureau

ButcherBox currently has a rating of two stars on Yelp as well as the Better Business Bureau. As customers leave complaints on Yelp such as “I think I’d prefer even a steak from Wal-Mart” and “SHOULDN’T EVEN RECEIVE ONE STAR” on the Better Business Bureau, it would be in ButcherBox’s best interests to improve these low ratings and increase satisfaction among current customers (Yelp, Better Business Bureau). ButcherBox will insert slips into every box that is shipped out to their current customers that say “Leave a review for your ButcherBox on Yelp or the Better Business Bureau and we will send you a 20% off coupon for your next order!” These coupon slips will be contingent on the customers leaving a review for ButcherBox on either platform and each customer would only be able to rate their box only one time. Since ButcherBox does not have a large amount of reviews on Yelp (15) and the Better Business Bureau (91), our proposed strategy will attempt to increase the amount of ratings and increase customer satisfaction from the discounts. Each customer that uses the discount code will be emailed a survey about their previous/current experiences ordering ButcherBox as well.

Coupon Slips – #ILoveButcherBox

ButcherBox’s Instagram engagement is currently at .38% of total followers engaging with their page and 1.03% of their website traffic comes from Instagram (Influencer Marketing Hub, SimilarWeb). ButcherBox will leave another set of coupons in their boxes that read “Share your memories with your box on Instagram using #ILoveButcherBox to receive 20% off of your next order!” We wish for customers to leave videos of themselves cooking their meal, create videos reviewing the box or post photos of completed meals and will have the same “one time only” rule as the review coupon campaign. ButcherBox will repost some photos and videos from this campaign on their account and will message coupon codes to customers that use the hashtag.

Vince Wilfork Influencer Marketing

Vince Wilfork is a retired football player that played in the NFL for 12 seasons,  played the majority of his career for the New England Patriots and won two Super Bowls (Associated Press). Wilfork has an existing relationship with Kingsford Grills, has high popularity in the New England area and has an engagement rate of 2.86% on Instagram (Influencer Marketing Hub). We plan on running commercials as well as an IGTV show with Vince addressing current issues of the box and finding creative solutions to combat these challenges. We would also air episodes that include Vince cooking and eating meals from the box. We believe that Vince is the most cost efficient celebrity influencer to work with, at $932.95 – $1,554.91 per post (Influencer Marketing Hub). This partnership will inspire customers to get the most out of their box in a fun manner.

Further Analysis of Proposed Strategies

As people are searching to buy coupons at various rates, with Google searches for “meal kit coupons” peaking at times around the holiday season, we plan on rolling out the coupon campaign around Christmas time (Google Trends, “meal kit coupon”). As many consumers search for Omaha Steaks around Christmas time, the coupon program will give ButcherBox a competitive advantage as customers can buy fresh meat at a discount from their service before Christmas (Google Trends, “Butcher Box, Omaha Steaks, Crowd Cow”). While analyzing customer equity through the lens of our proposed strategies, we believe the previously outlined coupon slip strategy would boost retention rate. Our goal is to maximize retention rate, which, conversely, aids in minimizing defection rate. While looking at the customer equity equation, we see retention rate, ‘R’, in the denominator. If we can successfully increase retention, we are lowering the overall denominator in the customer equity equation and therefore increasing overall customer equity.We believe the implementation of the coupon slip strategy will not only increase word of mouth and positive reviews, but also increase repeat purchases. The increase in both positive brand image and repeat purchases should lower ButcherBox’s acquisition cost.

ButcherBox should launch the influencer marketing partnership with Vince Wilfork at the start of the football season, so consumers can buy the product around the tailgate season. While looking at Google Trends, searches for “steak tailgate” is most popular around the start of the football season, so ButcherBox should launch this partnership in late August when the NFL preseason begins (Google Trends, “steak tailgate”). As 18% of people that attend sports games tailgate before the game and 93% of tailgaters prepare their food once they arrive to a given venue, a ButcherBox would perfectly fit the needs of a large group going to watch a game at a given stadium (Roberts). A quantifiable aspect of this strategy comes from raising our engagement on Instagram. Wilfork’s engagement rate of 2.86%, combined with his sizeable following provides ButcherBox another avenue to elevate engagement rate. Currently, ButcherBox’s Instagram engagement sits under .5%, far from a respectable target of 3-5% (Influencer Marketing Hub). By offering a discount on future purchases to users who use  ‘#ILoveButcherBox’, we believe it is more than feasible that our engagement rate significantly increases toward a target rate of 4%. Both of these Instagram-based strategies serve to decrease customer acquisition costs, one of the key components of customer equity.

Benefits of Proposed Strategy

The benefit of the proposed strategy focusing on customer retention is that it will address the main problem of poor customer service and subpar word of mouth with the company’s customers. Customer acquisition is not effective if we cannot create loyalty and frequent purchasing behavior. Customer satisfaction has a direct correlation to retention and profitability, so focusing on that strategy is important to fix the problems of ButcherBox. Traditional mail advertising through coupon slips, a digital campaign of a hashtag and an influencer campaign will help spread word of mouth, highlight the changes ButcherBox has made to address the customer and would allow ButcherBox to engage with customers that receive the product and encourage them to share their experience. The discount program would create an incentive to leave feedback and increase customer engagement, an element of engaging customers beyond their initial purchase, and will increase brand loyalty. As 90% of millennials use coupons to plan shopping and 50% of millennials have started to use more coupons in the past year, our coupon campaign may have a high appeal among the millennial audiences (Griswold). A digital campaign through hashtags and influencer marketing would serve the purpose of spreading word of mouth and create a brand community for ButcherBox on social media.

Downfalls of Proposed Strategy

Though the digital campaign spreads word of mouth with a younger audience, this misses out on a large part of the audience that would be exposed to advertising/marketing in traditional means, such as TV or radio. Only 3% of people aged 55-64 interact with the ButcherBox Instagram and this campaign may not have as much reach for older consumers on Instagram (Statista).  These consumers are important to reach because while looking at the Facebook Audience Insights for Omaha Steaks, 28% of females and 18% of males over the age of 65 are customers of Omaha Steaks (Facebook).  Missing out on targeting this important audience through social media may hurt ButcherBox’s sales for some of their prime target markets. As our coupon campaign is for print coupons, 60% of millennials share coupons via digital social networks, so our proposed strategy may not have enough reach among millennials (Griswold). Additionally, 48% of people that read online reviews think that they are biased or untrustworthy, thus decreasing the effectiveness and credibility of our review coupon campaign (Smith). The proposed strategy has discounts to encourage repeat purchases/feedback, but lacks a loyalty program. A loyalty program addresses the main problem of focusing on customer satisfaction and is high share of wallet. A customer that is satisfied with the services ButcherBox provides does not imply that the customer will give ButcherBox most of their purchases. If loyalty rewards are provided with increased frequency and monetary amounts, customers would be more willing to increase their share of wallet with ButcherBox. The focus on customer satisfaction doesn’t necessarily address switching costs such as psychological switching costs. While building the psychological switching costs, a shift from satisfaction to loyalty needs to occur.

Strategy Outcome

The strategy focuses on retention and less so on acquisition. The strategy fosters loyalty through customer engagement and brand advocacy with feedback through either the Instagram Hashtag #ILoveButcherBox or a physical coupon slip and the informative aspect in the Vince Wilfork influencer marketing campaign. Coupon slips with the resulting added benefit provides ButcherBox with immediate feedback and subsequent utility to current customers. In addition, the customer does not sacrifice much, only their time in providing feedback. Customers benefit twofold: acquiring a hard, immediate benefit and ensuring exceptional service for their next order. Repeat purchase is encouraged and enticing, for the customers know that they will receive successive/exceptional service and products, as well as a discount.

Vince Wilfork’s digital campaign demonstrates the value and changes in the revised ButcherBox. Showcasing what’s in the ButcherBox and how complaints are being addressed from the coupon slips or hashtag is hallmark to the influencer marketing campaign. The ButcherBox campaign is about customization and not commoditization. We are differentiating the brand from other meat delivery services who focus more on the product and less on the product’s service aspect. It is important to convey to the customer that they are receiving a premium product in tandem with a premium service.

Success Measures

 ButcherBox’s ultimate goal is to increase customer retention. ButcherBox will track the number of satisfied orders, deal with customer service issues and measure satisfaction through the survey that is sent out to customers. ButcherBox will monitor how often the codes are used and track the number of reviews they receive on Yelp and the BBB. ButcherBox will measure the follower count and engagement rate of their Instagram from the coupon slip campaign. We will track the success of #ILoveButcherBox through seeing how many times the hashtag is used.  If the hashtag is used a lot or starts trending, this will increase the customer engagement rate of ButcherBox’s Instagram and retain existing customers that post organic content showing how much they love their box. We hope that the coupon slips are a significant enough percentage/discount that will push customers to leave great reviews on both platforms. If these reviews and amount of posts are still unsatisfactory, this will shift the problem to another part of our business that we need to improve, but we hope that the coupon campaign is enough to combat customer dissatisfaction.

As ButcherBox plans on partnering with Vince Wilfork, we will measure the success of this strategy through tracking the reach, frequency and gross impressions of the IGTV show and sponsored content. Google Trends can be used to measure the effectiveness/traffic of the campaign and see how much word of mouth there is around the campaign. We will measure ButcherBox and Vince Wilfork’s Instagram engagement rates, as the videos of Vince will be posted on both accounts, and see how many of our current followers are willing to interact with our Instagram and brand through this strategic partnership.

 Implementing the above strategies are key to ButcherBox’s current and future success.

References

1. Associated Press. “Vince Wilfork Announces His Retirement from the NFL – in a Sponsored Tweet.” BostonGlobe.com, The Boston Globe, 7 Aug. 2017, www.bostonglobe.com/sports/patriots/2017/08/07/adam-gase-says-jay-cutler-didn-delay-his-retirement-stand-sideline/IEQjPPpIJxvYRXr5PBtkWK/story.html.
2. Bitti, Mary Teresa. “Dragons’ Den Alumnus Carnivore Club Is Proving It’s More than a   Fad.” Financial Post, 18 Aug. 2016, business.financialpost.com/entrepreneur/fp-startups/dragons-den-alumnus-carnivore-club-is-proving-its-more-than-a-fad.
3. “ Butcherbox.com.” SimilarWeb, 24 Apr. 2019, www.similarweb.com/website/butcherbox.com.
4. “ButcherBox Competitors, Revenue and Employees – Owler Company Profile.” Owler, www.owler.com/company/butcherbox.
5. “Butcher Box, Omaha Steaks, Crowd Cow.” Google Trends. 24 April 2019.

https://trends.google.com/trends/explore?date=now%207-d&geo=US&q=Butcher%20Box,Crowd%20Cow,Omaha%20Steaks

6. Facebook Audience Insights,  Facebook, https://www.facebook.com/ads/audience_insights?ref=fbiq_ai.
7. Freedonia Focus Reports. “Online Grocery Shopping: United States.” USC Marshall. 24 April 2019.
8. Garcia, Krista. “What Subscriptions Are Given as Gifts?” EMarketer, 14 Dec. 2018, content-na1.emarketer.com/what-subscriptions-are-given-as-gifts.
9. Griswold, Alison. “Millennials Use Coupons More Than Their Parents.” Business Insider, Insider Inc, 7 Mar. 2014, www.businessinsider.com/millennials-use-coupons-more-than-parents-2014-3.
10. “HOW BUTCHERBOX GREW REVENUE TO $30M IN 2 YEARS.” Acceleration Partners, www.accelerationpartners.com/resources/podcasts/Ep.17-How-ButcherBox-Grew-Revenue-to-30M-in-2-Years.
11. Influencer Marketing Hub, Micro-influencers vs Celebrities, 24 Apr. 2019, influencermarketinghub.com/micro-influencers-vs-celebrities/.
12. “Meal kit coupon.” Google Trends. 7 May 2019. https://trends.google.com/trends/explore?cat=71&geo=US&q=meal%20kit%20coupon
13. “Meal Kit Mania: Innovation for Foodies.” Nielsen, The Nielsen Company, 5 Mar. 2018, www.nielsen.com/us/en/insights/news/2018/meal-kit-mania-innovation-for-foodies.html.
14. Omaha Steaks | News Hub. “Company Profile.” Omaha Steaks | News Hub, www.omahasteaks.com/press/our-company/company-profile.
15. Packaged Facts. “Online Grocery Shopping in the U.S., 2nd Ed.” USC Marshall. 24 April 2019.
16. Review of ButcherBox. Better Business Bureau, www.bbb.org/us/ma/boston/profile/food-and-beverage-services/butcherbox-llc-0021-186401/customer-reviews.
17. Review of ButcherBox. Yelp, www.yelp.com/biz/butcherbox-cambridge-3.
18. Roberts, Amy. “Tailgating by the Numbers.” CNN, Cable News Network, 1 Sept. 2016, www.cnn.com/2015/11/25/living/tailgating-by-the-numbers/index.html.
19. Smith, Aaron, and Monica Anderson. “Online Reviews and Ratings.” Pew Research Center: Internet, Science & Tech, Pew Research Center, 19 Dec. 2016, www.pewinternet.org/2016/12/19/online-reviews/.
20. Soderlin, Barbara, and World-Herald. “In Its 100th Year, Omaha Steaks Works to Stay Relevant in
 Rapidly Changing Food Delivery Market.” Omaha.com, 26 June 2017, www.omaha.com/money/in-its-th-year-omaha-steaks-works-to-stay-relevant/article_68819149-66da-5d27-8330-4e34f59fd936.html.
21. “Steak tailgate.” Google Trends. 7 May 2019.

https://trends.google.com/trends/explore?cat=71&geo=US&q=steak%20tailgate

Appendix

“Butcher Box, Omaha Steaks, Crowd Cow.” Google Trends. 24 April 2019.

“Butcherbox.com.” SimilarWeb, 24 Apr. 2019.

“Butcherbox.com.” Spyfu. 24 April 2019.

“crowdcow.com.” Spyfu. 24 April 2019.

“omahasteaks.com.” Spyfu. 24 April 2019.

“Butcherbox.com.” SimilarWeb, 24 Apr. 2019.

“ Butcherbox.com.” SimilarWeb, 24 Apr. 2019.

Facebook Audience Insights for Omaha Steaks.

Statista.com

Influencer Marketing Hub, Micro-influencers vs Celebrities, 24 Apr. 2019.

Influencer Marketing Hub, Micro-influencers vs Celebrities, 24 Apr. 2019.

“Meal kit coupon.” Google Trends. 7 May 2019.

“Steak tailgate.” Google Trends. 7 May 2019.

Review of ButcherBox. Yelp, www.yelp.com/biz/butcherbox-cambridge-3.

Review of ButcherBox. Better Business Bureau, www.bbb.org/us/ma/boston/profile/food-and-beverage-services/butcherbox-llc-0021-186401/customer-reviews.