Practically speaking, a price increase is never a fun call to make, Kate Whitney admits. However, it was a brave call she’s had to make at Marley Spoon over the past year. And it paid back.

“There was the expected customer churn, but we had to act like a retailer and move with the market. It was a solid financial decision, and while the customer remained our priority, we couldn't sustain a growing business on the net margins with the food cost inflation environment we faced,” Whitney explains.

Commercial acumen

The decision to lift prices was prompted by the worst agricultural conditions Australia has seen for decades. This made it an incredibly challenging year for margins, supply chain and customer dissatisfaction. With a startup P&L hyper-sensitive to swings of that size, there was a need for immediate action, Whitney says.

“I was faced with two options: Deliver a second meal plan price increase this year to an increasingly fickle subscriber who cited ‘value for money’ as the largest churn reason to date; or remove further value from the customers’ plate in the form of ingredients we could no longer afford to buy or find,” she says.  

Neither option was going to be popular, but only one would save the company’s EBITDA position. A second price increase came into effect mid-July.

“We bravely executed a price increase to all of our subscribers, bore the cancellations and have come out the other side with a normalised customer base who have the box experience they deserve, right-priced for the produce and protein market we operate in,” Whitney says.  

In addition, Marley Spoon altered its menu to push higher priced ingredients into a new ‘Premium’ range of recipes, launched on 1 August 2022. Despite some customer protest, revenue generated on both brands has doubled against expectations.

“Bringing a broader team into our problem statement was critical,” Whitney says of the process. “We figurately held hands across culinary, finance and marketing to deliver a commercial product we knew would meet the financial targets, was operationally feasible, and the customers would love.”

Data-driven maturity

Incremental revenue stream is something Whitney has a particular knack of spotting. So when external data sources showed a growing number of customers asking to purchase Marley Spoon’s special spice blends and seasonings used in its recipes, she spied a fresh business opportunity.

“Highly protective of our custom blends, we were reluctant to sell these in the market, lest the customers cook the recipes themselves and churn,” Whitney explains. “Rather than ignore the customer demand, we tested a small batch of the spices, hand-packed and labelled in glass jars, and promoted the exclusive range on our owned channels in early June. Marley Spoon’s spice mixes remain a secret blend and are our top sellers today among VIP customers who have remained loyal, bringing in thousands of dollars of incremental revenue so far.

“It’s a great example of putting the customer first, being brave and making it happen – three of our core team values.”

Innovative marketing

Partnering with Woolworths as one of its corporate venture capital beneficiaries was a strategic decision Marley Spoon made in 2019, and the partnership has been positive for both parties.

As part of the roadmap and for many months, Whitney has driven resource internally and externally to allow both the Marley Spoon and Dinnerly brands to become Everyday Rewards earn partners. The play is about driving loyalty and ARPU. Research indicated a significant percentage of customers were interested in the Everyday Rewards scheme.

In late 2021, the contract was signed, and the technology integration completed. Within the first month, more than 20,000 customers had linked their Everyday Rewards cards to their meal kit account and began earning points.

“We held our breath collectively to assess whether this new benefit would drive a commercial outcome,” Whitney says. By the end of 2021, all of Marley Spoon’s base expressing interest had linked their Everyday Rewards card. They also had larger average basket sizes than non-linked members.

“The ROI was clearly positive, and the higher basket size pays for the EDR points and operating cost week after week while maintaining higher ARPU, our ultimate goal,” Whitney says. “The partnership today has evolved to enable a new, sophisticated promotions tool… and we’re surgically applying bonus points promotions to our subscription base to drive very specific behaviours.”

Partnership, this time in the form of Marley Spoon’s ‘Box Partner Program’, has been another monetisation opportunity in the last couple of years. In 2022, the mealkit business created a partnerships manager role and launched the Wine Store by Marley Spoon.

“This is a truly unique offering to our active customers looking to solve another mid-week dilemma,” Whitney says. To date, a number of joint marketing programs have been locked in with complementary FMCG and direct-to-consumer brands.

Leadership impact

Through all this, team has been everything to Marley Spoon’s marketing and growth chief. “Last year, I reflected on the turnaround from 2020 to 2021, and how tough it was to generate trust and motivation in the team during the knocks and setbacks of Covid #2,” she says in her CMO50 submission.

“This year, the team are the same group of individuals, but the proof of their performance within Marley Spoon is in their own professional growth.” This includes a number of promotions, new responsibilities taken on voluntarily and international secondments.

“There is no secret sauce to the team’s motivation and performance. We meet every Monday rain, hail or shine, mostly without an agenda, to maintain relationships in a hybrid workplace environment,” Whitney says.

“Every fortnight, we hold The Marketing Lab, an ideation and discussion forum where the team nominate the agenda and take the floor with a problem or opportunity. We allocate special projects democratically and reward and recognise each other’s achievements, honestly, without hierarchy or bias. We are empathetic, we have fun and we care about the future of the company.

“We aggressively battle with our competitors, and we hustle hard to deliver projects that outsmart and outwin, even when their budgets are 10x. The challenger brand is within us all.”

Being brave is also in the hiring process. “We seek out bravery, courage and evidence of taking calculated risks,” Whitney says.

“When the team is confronted with a choice - where protocols or process might have to be avoided in order to better serve the customer- we ask our teams to make a reasonable assessment of risk and allow them to proceed. So long as a balanced set of options are considered, and delighting the customer is paramount, the choice is usually clear.”