Interview with CRO at Home Chef: Driving Revenue in the Meal Delivery Space

As part of our interview series I sat down with Richard DeNardis, CRO at Home Chef, to talk about the key strategies to drive revenue in the hyper-competitive meal delivery space.

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Richard began his journey at Home Chef in 2015, a few months later moving to the role of Chief Revenue Officer overseeing growth and customer acquisition for the meal kit company, a new category at the time. From its early stage, through Kroger’s $700M acquisition in 2018 and beyond, the role has morphed into a more holistic one, focusing on how to drive value for current and former customers, and thinking about the optimization of the customer journey.

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Acquisition vs retention through different stages of the company

In the early days of Home Chef, acquisition was top of mind. As the #1 growth contributor and KPI, bringing new customers into the brand and category was essential. The focus was on which marketing messages and channels could be used to entice customers and help them better understand the product.

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As the company evolved, the focus on retention increased, and eventually shifted into finding the right balance between acquisition and retention. Home Chef employed strategies like finding the right channels, figuring out the right promotion or pricing, and thinking about which new products could be introduced. A key aspect of their strategies was finding how to speak to different customer segments. Beginning by understanding the stage in the lifecycle customers in, their efforts focused on speaking to the relevancy of their products for that specific customer and understanding the stage of their life. They found it key to segment the audience and address them with the right messaging. This proved essential in following the customer through their entire journey, eventually converting them, retaining, and at times recovering them.

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Impact of economic cycles on the meal delivery space

During the pandemic, Home Chef had a product that was particularly relevant as we were quarantined, leading to onboarding a high volume of new customers. Coming out of the pandemic, retention was one of their top concerns, and to their pleasant surprise, it remained strong and at times, even better than prior to the pandemic. The key was demonstrating the value of the product in order to maintain customers, Richard explains. But like a lot of businesses in e-commerce, Home Chef is figuring out what is the new normal, as the economic cycle impacts customer behavior and the cost of doing business.

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From a cost standpoint, the meal delivery space has experienced a tremendous amount of inflationary pressure on their COGS: labor, transportation and food costs have all gone up meaningfully over the last few years. As inflation is impacting the business, it is important to be thoughtful about how customers are affected. For Richard, where the consumer is in their mindset needs to always be top of mind for a consumer business. 

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Strategies to manage voluntary and involuntary churn

For a recurring business like Home Chef managing voluntary and involuntary churn is key. From a voluntary perspective it is always important to understand what is driving someone to pause, gathering that data, analyzing, and thinking through what aspects of the customer experience can be improved.

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On the involuntary side, Richard recommends developing close lines of communication with customers and building deeper connections into their wallets. Adding additional payment methods where there might be multiple forms of tender behind can be really helpful as it provides access to multiple lines in case one fails.

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Tools to scale

I asked Richard which tools can help businesses in this space as they scale. His recommendations:

• Website optimization is key to drive ROI from an acquisition spend. Conversion rate optimization platforms like Optimizely, and VWO can be very helpful for this.
• Simplifying the checkout experience can help boost conversion rates. Payment methods that don’t require the user to get up, find a wallet, enter credit card numbers, etc make the purchase experience smoother. Home Chef has been able to see a boost in conversion from adding new payment methods that provide this type of experience at checkout.
• Development of close lines of communication can help for a myriad of use cases and can be accomplished with a simple SMS push, which is preferable over email.

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Advice for the next 12-18 months

Find a balance between acquisition and retention. There is always a temptation to focus on acquisition with immediacy to the results and increased customer volume. But from an efficiency point of view, which is what investors and operators care about, it’s much more efficient to keep a customer than it is to find a new one, convince them to try your brand and continue to keep them happy. You kill two birds with one stone by having a great customer experience that retains customers.‍

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Be nimble and follow the data. Keep an eye on behavioral and purchasing patterns shifts, make sure your team is nimble and able to adapt.

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At Waivr, we’re helping subscription e-commerce businesses increase acquisition and retention by adding Pay by Bank as a payment method at checkout. Pay by Bank provides the ability to process recurring payments via direct debit utilizing bank credentials, enabling merchants to pass discounts to customers by saving on payment processing costs, and eliminating bounced payments and involuntary churn with data-driven payment processing.

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