Included in the graph below for comparison are subscription services Dollar Shave Club and Netflix.įor companies like Blue Apron, customers capitalize on introductory offers only to cancel before a payment is required. Each major player in the industry suffers from unsustainable churn rates, estimated by analysts to be upwards of 70% after 12 months. While subscription meal-kits seemed like the perfect way to encourage convenient at-home cooking, none of them have found the “recipe for success”. The hidden customer churn problem and why it matters A Solution to the Problem: Our Recommendations & Impact.Blue Apron’s “Growth” Strategies: How did they get here?.Blue Apron’s Economic Imbalance: The Numbers.Inside Blue Apron’s Customer Retention Problem.

The Hidden Customer Churn Problem and Why it Matters.

We’re going to show you why this acquisition addiction isn’t profitable, and finish with the retention strategies Blue Apron can use to increase a user’s lifetime revenue by at least $437 and gain traction on the path to profitability. An extreme obsession with customer acquisition killed its growth, leaving it with churn rates upwards of 70%.Īs the company faces rising acquisition costs and increasing competition, the only way to keep from going under is to immediately reinforce the parts of the customer lifecycle that keep subscriptions active. It all comes down to how the company tried to grow. Where did things go wrong? Why didn’t Blue Apron live up to expectations?

“We have a history of losses, and we may be unable to achieve or sustain profitability.” Backed by $135 million in venture funding and a $2 billion valuation, the company was primed to become the ultimate disrupter of the food and grocery industry.įast forward to today, and the company has found itself in a different reality: Once upon a time, Blue Apron flourished as a promising unicorn startup.

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