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Embracing the Power of Subscription-Based Models

Business Leadership

An array of subscription-based services has permeated the market, catering to diverse needs, from pet toys and meal kits to music and movies. The prevalence of this model among companies is easily understandable.

The subscription approach perfectly aligns with the surging demand for convenience. Customers no longer face the burden of making purchase decisions; instead, their desired products or services simply materialize. With fixed-rate pricing, customers have a clear understanding of what they receive and how it fits into their budget.

For businesses, subscription models offer the advantage of recurring sales, enabling better revenue prediction. This facilitates streamlined resource and inventory management, as well as efficient preparation for anticipated growth. Moreover, the allure of guaranteed revenue makes subscription-based businesses more appealing to potential investors.

Beyond the financial and logistical perks, subscription-based models provide intangible value to both customers and businesses. It’s not solely about delivering a product or service; it’s about cultivating a genuine connection with customers. If a business fails to meet expectations, customers won’t hesitate to sever ties. Therefore, businesses must continually strive to enhance the customer experience and provide unrivaled value. This fosters trust and security, transforming mere transactions into enduring partnerships.

However, in a saturated market filled with countless subscription services vying for customer attention, businesses face the challenge of standing out. Once a business establishes a relationship with customers, maintaining that connection becomes paramount. Furthermore, it’s essential to consider whether a subscription-based model is suitable for every business. To shed light on these matters, we recently interviewed Andy Levitt, CEO and Founder of Purple Carrot, a plant-based meal kit business renowned for its partnership with Tom Brady in the “Peak Performance” campaign. Levitt shared insights on why the subscription model thrives at Purple Carrot, their unwavering commitment to creating exceptional customer experiences, and their plans for the company’s future.

Subscription Models: The Superior Choice Over Pay-as-You-Go

In October 2014, when Purple Carrot launched, it operated as a pay-as-you-go company due to uncertainties surrounding customer subscription preferences in this new market. Week after week, customer numbers would climb and then plummet back to zero, necessitating a constant restart. As the business evolved, customers began inquiring about their weekly boxes, mistakenly assuming Purple Carrot offered a subscription service, mirroring the rise of subscription meal kits. In November 2015, Purple Carrot made the transition to a subscription model, a decision that has proven highly beneficial for both the business and its consumers. The subscription approach provides the business with increased visibility into upcoming demand, while customers can rely on a consistent supply of curated, incredible plant-based meals every week.

Strategies for Ensuring Customer Happiness and Retention

At Purple Carrot, customer satisfaction hinges on the delivery of 100% plant-based meals that are not only nutritious but also bursting with delectable flavors. These meals introduce customers to unfamiliar cuisines and taste experiences. The Head Chef, who boasts six years of experience at Whole Foods Market and two years running a progressive Boston restaurant, skillfully utilizes seasonal produce to create unique recipes that can be prepared in just around 30 minutes.

Navigating the Challenges of Subscription-Based Businesses

The meal kit industry has evolved from its infancy into a highly competitive category that captivates consumers and major brands alike. With the initial success of established players, a flood of “me too” companies emerged, all targeting a similar audience. This rapid growth led to aggressive trial offers designed to entice customers to switch services, resulting in transient customer behavior. This underscores the necessity for companies to establish a distinct bond with their customers, instilling a sense of belonging to a larger community.

Standing Out in a Crowded Subscription Market

Our distinctive selling point lies in being the sole provider of exclusively plant-based meal kits. We aim to empower individuals seeking to seamlessly incorporate plant-based eating into their lives without fully relinquishing meat, fish, and dairy, thereby becoming what we call “Balancetarians.”

Embracing plant-based meals, even if only a few times a week, has a profound positive impact on personal health, environmental sustainability, and animal welfare.

Innovating Beyond the Menu: Purple Carrot’s Focus

As part of our commitment to sustainability, we have recently reduced the size of our ingredient shipment boxes by an impressive 37%. Additionally, we have transitioned to 100% curbside recyclable liners. These initiatives contribute significantly to minimizing our environmental footprint.

The Future of Purple Carrot: Looking Ahead

The year 2017 has marked an exceptional start for us, surpassing growth expectations. Notably, our collaboration with New England Patriots Quarterback Tom Brady and his team at TB12, where we introduced meal kits aligned with his nutritional philosophy, garnered an extraordinary response. As we continue to expand, we are exploring potential partnerships with likeminded brands and celebrities who share our belief in the transformative power of plant-based eating.

Since our establishment in October 2014, we have extended our shipping services to cover 70% of the United States through distribution centers in New York and LA. Our goal is to expand further, aiming to reach approximately 90% of the continental U.S. by year-end. With the rising prominence of the convenience economy, the meal kit industry has grown into a robust $1.5 billion business, and this upward trajectory is anticipated to continue. We are thrilled to be an integral part of this flourishing landscape.


Tags: Business Leadership

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