How a Data-Driven Meal Delivery Service Cooks Up Exactly What Customers Want

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This story appears in the May 2015 issue of Entrepreneur. Subscribe »

Conrad Chu isn’t a restaurateur, grocer, chef or food critic. But for intel on gastronomical trends in two of America’s food meccas, Chu is your man. “In San Francisco, everybody loves kale, whereas in Seattle, there’s a real affinity for Italian food,” he says.  

Chu’s 4-year-old meal-delivery company, Munchery, used to come by that information through trial and error, a costly process it had to replicate in each new market it entered. His San Francisco-based brain trust struggled to pinpoint why some of their chef-prepared gourmet meals weren’t selling. The meager, mostly anecdotal customer data Chu’s team was able to collect via email and other informal channels left them hungry for meatier info on customer cravings. 

As a “full-stack” service that procures ingredients, then prepares and distributes meals, Munchery “needed customer-service tools scalable and sophisticated enough to give us good metrics on what our customers like,” Chu says. 

“We pride ourselves on providing a variety of choices that cater to people’s tastes, whether they prefer ethnic, they’re vegan, omnivores, Paleo or whatever,” he adds. “And those tastes can change daily. We needed a good amount of fresh information to determine what people want and when they want it.”

The fix

Chu zeroed in on the Desk.com platform from San Francisco-based software giant Salesforce. The platform seamlessly tied into Munchery’s software to track customers’ order histories and food preferences, as well as company mentions on Twitter and other social media feeds. This helped Munchery spot and react to macro taste trends such as kale mania.

Other selling points for Chu were scalability, ease of implementation and flexible pricing, beginning at $30 per Munchery employee per month. 

The results

Chu is satisfied that Desk.com’s high-level metrics allowed his company to quickly adjust menus, but it’s the quick-trike ability to identify and deal with customer pain points such as late or erroneous deliveries that won him over.

“That responsiveness is the very soul of what makes people rave about our customer experience,” Chu says. “Desk.com lets us see patterns and cut through the noise. It gives us a full 360-degree viewpoint of our customers.” 

Thanks in part to this insight and an expansion to Seattle in 2014, Munchery has grown 400 percent in six months. Next up is New York City. 

A second opinion

“The constructive intelligence that comes from metrics like these is potentially enormous,” observes Bill Bishop, founder of Brick Meets Click, a food-industry consulting firm in Barrington, Ill. The “24-karat intelligence,” he says, is the deeper insight the metrics provide into top customers—the small percentage that collectively represents the lion’s share of sales and profits. “Munchery can get the most benefit by concentrating on their most valuable customers.”

On the supply side, metrics lead to more accurate sales forecasting, “which helps them reduce cost of shrink and waste and increase the efficiency of their supply chains,” Bishop says. Exactly the kind of information Chu will need when Munchery tackles New York’s many appetites this year. 

Edition: December 2016

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