BLUE APRON CASE STUDY

Blue Apron can enhance its Customer Lifetime Value (CLV) by employing diverse techniques
connected to product strategies, which can optimize profitability. The entire revenue a
company can reasonably anticipate from a single customer account over the course of the
business relationship is measured by the critical CLV indicator. Several variables, including
average purchase value, frequency of purchases, customer lifetime, and profit margin per
customer, are included in the CLV calculation. Improving any of these factors will increase
CLV. product-related strategies that can help Blue Apron:

Create a Loyalty Program

Justification: Through exclusive offers or point systems, a loyalty program gives
incentives to loyal consumers, promoting their continuous patronage and maybe
raising the average order value.
CLV Relation: Encourages consumers to stay longer and make larger purchases to
receive loyalty incentives. This has a direct impact on customer lifespan and purchase
frequency.
Improve Your Online Experience
Justification: Increasing consumer engagement can be achieved by developing the
online interface and providing services like AI-powered meal planning assistance or
virtual cooking classes.
CLV Relation: By providing more paid features (raising average purchase value),
streamlining the purchasing process (increasing purchase frequency), and enhancing
customer happiness (extending customer lifespan), this could raise all CLV variables.
Utilize Local and Seasonal Ingredients
Justification: By giving limited-time specials, seasonal products can be used to cut
expenses and add variety to meal choices, which may draw in more consumers and
keep hold of current ones.
CLV Relation: May save costs (raising profit margin per customer) by strategically
sourcing seasonal ingredients; influences purchase frequency by generating
excitement for new dishes.
Present the concept of tiered pricing models.
Justification: Blue Apron's introduction of many pricing tiers allows it to appeal to a
broader range of customers by accommodating varied budgetary limits and providing
premium options for those who are ready to pay a premium for exclusive products.
CLV Relation: By segmenting the market and providing products that can draw in
higher spending from categories, this strategy raises overall profitability by having an
impact on the average purchase value.

MARKETING BUDGET ALLOCATION:

Considering HelloFresh's wide consumer segment targeting and the competitive landscape,
Blue Apron needs to carefully balance its marketing spend between bringing in new business
and keeping its current clientele. Data-driven decision-making is required, considering the
cost of acquisition vs retention as well as the current CLV of both new and existing client
categories. Prioritizing the current client base may be more profitable if the cost of gaining
new customers is much higher than the cost of keeping current ones and if retention measures
can greatly enhance the CLV of current customers. But to maintain growth, some of the
funding should constantly go toward bringing on new clients, particularly in markets where
HelloFresh hasn't yet fully conquered.