Customer referrals help boost Home Chef’s business 25x in 2015
January 20, 2016 09:44 AM
Customer referrals are bringing home the bacon for the Home Chef meal-kit delivery service since launching two and a half years ago, founder and CEO Pat Vihtelic says. Home Chef delivered more than 1 million meals last year, up from 50,000 meals delivered in 2014.
Launched in September 2013, Home Chef is a fresh ingredient and recipe subscription service based in Chicago. The service delivers meal boxes that include fresh ingredients and recipes for customers to cook at home. Subscribers create a profile on Home Chef’s website specifying taste preferences and dietary restrictions, and they can choose from Home Chef’s menu of recipes or let the company’s software select meals based on their profiles. The service costs $9.95 per serving with free shipping on all orders of more than $40.
Home Chef is on track to deliver more than 250,000 meals per month in 2016, up from about 10,000 meals monthly a year ago. The company grew from around 20 employees in the beginning of 2015 to its current staff of more than 200.
“Most of our new customers come from existing customers,” Vihtelic says. While he doesn’t specify how much of Home Chef’s growth comes from referrals, Vihtelic says they are the company’s largest acquisition channel, adding more business than all of the company’s paid advertising combined. When subscribers refer new customers to Home Chef, the existing and new customer each receive a $30 credit that can be applied to their next order.
Home Chef’s team of chefs publishes a new menu with about 10 items each week. Choices typically include protein meals, vegan options, smoothies and breakfast options. Organic meals also are available at a premium price. Subscriptions are on a weekly basis: customers must order by Friday at noon for delivery the following week.
About 80-90% of sales each week come from existing customers. “Our most consistent feedback from subscribers is how strong our customer service is,” he says. Customers tout the ease of pausing deliveries at any time through Home Chef’s website as well as the ability to send in specific dietary requests to amend existing recipes, Vihtelic says.
Variety, flexibility in the service and a “Midwest approach” to meals, Vihtelic says, are key differentiators from competitors, which include Blue Apron Inc. and Plated.com. Blue Apron Inc. is No. 318 in the Internet Retailer 2015 Top 1000 Guide; Plated.com is No. 567.
“There wasn’t a company that focused on Midwest roots,” Vihtelic says. “We offer recipes that are true to the Midwest, like chicken Vesuvio, and things that people are familiar with, like spaghetti and meatballs.”
Home Chef ships to 30 states in the Midwest and East Coast and plans to expand operations to the West Coast this year. Vihtelic does not disclose online sales.
Website traffic tracker Compete.com says HomeChef.com attracted 76,442 unique visitors in November, up nearly five times from 15,800 a year earlier.