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Loyalty Programs

Why the Meal Kit Industry Should Take a Bite out of Loyalty Programs

Written by 
Chloe Komesarook
April 5, 2023
Customer Retention
Loyalty Programs

What are Meal Kit Services Exactly?

The meal kit industry has been dishing out a new and exciting concept in the food and beverage industry, which has gained significant traction over the past few years. Meal kit services provide pre-portioned and pre-measured ingredients and recipes right to their customers' door, allowing them to cook meals at home with ease.

The concept behind meal kits is to make cooking at home more convenient and accessible to people with busy lifestyles who still want to eat healthy, fresh, and delicious meals.

The Importance of Loyalty for a Meal Kit Service

The meal kit industry is seeing a steady trajectory of consumers buying into it. In fact, the meal kit industry’s worldwide revenue in 2022 was 17 billion (USD), with predictions this will reach 30 billion in 2030. 

With the industry thriving, the significance of a loyalty program that guarantees customer satisfaction and retention is the obvious next step. While people may be motivated to enrol, lacking a suitable program may lead them to leave for one of the many other meal kit providers.

Meal kit services have a fantastic business model, but need to start looking towards ways to retain their customers.
Source: Marley Spoon website

Meal delivery services need to now turn their attention towards engaging with their loyal base and taking a customer-centric approach to marketing. Loyalty programs make it easy for customers to engage with brands and create a more personalized experience in the process. 

Benefits of a Loyalty Program for Your Meal Kit Service 

Enhanced Retention  

Meal service providers have a unique business model, which appeals to people around the world. Why? The services encompass a variety of motives - some people use meal kit services for weight loss, others to add creativity and variety in their diet, and many, for simply time-saving, cost-efficient meals. 

Loyalty programs help to retain customers by keeping them motivated to continue their individual meal plan, which assists in giving them results.

With every order they make, a meal kit company could enhance retention by including a card or sticker with a code in order for customers to log loyalty stamps or points. That way, the customer becomes motivated to keep on ordering to achieve an appealing reward.

Increased Referrals

With every happy customer comes a free added bonus - referrals. Referrals are the best advertising that any brand can have — consumers rely on word-of-mouth two to ten times more than paid media. 

Referrals have been shown to have higher conversion rates than other types of marketing. This is because people tend to trust the opinions of their friends, family, and peers more than they trust advertising messages from companies. When a customer receives a referral from someone they know, they’re more likely to take action and make a purchase.

Having a simple and easy-to-use referral aspect as part of a loyalty program for a meal kit service, where customers can earn something for referring people they know, is a no-brainer.

Better Personalization 

Loyalty programs are effective when they are customer-driven and tailored to the individual. Luckily, the tools available in digital loyalty programs allow for you to collect customer data, tailor the client’s experience and maintain a connection. 

Personalization is a major trend in marketing this year, which allows for customers to feel closer and better understood by a brand.
Source: Erik Mclean via Pexels

Communication, such as via SMS or in-app push notifications are just one feature that leaves a lasting impression on customers when the messages are right. They could come in the form of customized meal recommendations, automatic reorder notifications, or personalized offers.

By interacting with your clients, especially when they are in the middle of an order (and aren’t in need of your service) you’re staying in the forefront of their mind and in turn, they feel seen. After all, 81% of consumers believe in brand loyalty because they want to form a relationship with a brand. 

Stamp Me’s digital loyalty program offers plenty of unique communication features that give programs a personalized feel. They include push notifications, SMS, a Birthday Club, Scratch & Win games, and automated messages or rewards.

Understanding the Behavior of the Customer Lifecycle

While your meal kit service might be successful, having the right data to stay ahead of the curve cannot be overstated. Loyalty programs provide invaluable data for your business about your customers and their attitudes towards your service at any given time.

By tracking when customer engagement is low, you’re able to plan for how to avoid it (by re-engaging) and identifying what areas of your model are lacking. Monitoring a customer’s lifecycle can help you gauge what your customers are looking for and in what aspects they’re not being fulfilled. 

Getting feedback directly from your clients offers more accurate data and also creates a stronger bond. The more you acknowledge a customer’s input, the more loyal they will become. In fact, 77% of your customers become even more loyal to your brand if you accept and implement customer feedback into your business. 

Increased revenue 

By encouraging loyal customers to purchase more frequently or to spend more money per order, your meal kit service can boost its overall sales. The numbers say it all: a 5% increase in customer retention correlates with a 25% increase in profit.

One of the ways in which a loyalty program increases revenue is through upselling and cross-selling. Loyalty programs can encourage customers to try new products or services within your business. Whether that’s an upgraded membership or membership add-ons, offering rewards for trying new products or making larger purchases can increase revenue. 

Case in point: 

Gourmet Dinner Service is an example of a meal kit brand with an engaging loyalty rewards program.
Source: Gourmet Dinner Service website

Gourmet Dinner Service, the Australian meal kit brand, offers a points-based loyalty program – “Gourmet Rewards”. This program allows for customers to earn points every time they shop, leading to exclusive discounts which can be redeemed after a certain amount of points. The discounts range from $25-$100 off which are simply applied at checkout.

Other ways to earn points include leaving a review, following their social media accounts, and referring a friend.

Gourmet Dinner Service is one example of a meal kit brand utilizing a loyalty program to spread awareness of their business and also set themselves apart from the competition. Which brings us to our final point. 

A Point of Difference for your Meal Kit Brand 

It’s no secret that the meal kit industry is extremely lucrative, with brands such as HelloFresh and Blue Apron having solidified their place at the forefront of the industry. With record sales last year, HelloFresh has made a name for itself through its customizable algorithm, pre-measured ingredients, and flexible membership features. This brand theme of individualization compliments a loyalty program extremely well. 

HelloFresh is one of the most successful meal kit brands, with customizable boxes and flexible delivery.
Source: HelloFresh website

The bottom line is, a loyalty program is a way for meal kit services to distinguish themselves and create a point of difference for their brand.

Over half (61%) of consumers switched some or all of their business from one brand or provider to another in the last year. This is especially relevant, as it reveals how at any time, brands are under threat of losing to the competition. Perhaps the prices are better? Or the shipping is speedier? This means that it is crucial to give your customers a purpose behind your brand: a reason to choose you over others. This can easily be resolved by a loyalty program. Showing that your service values your loyal base will set you apart and make the possibility of a switch less likely. 

If you are the owner of a meal kit business and you’d like to get started on your unique loyalty plan, feel free to contact us. Stamp Me offers real-time solutions to your loyalty endeavors and gives you a program that grows along with your business. 

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