Blue Apron Still Won't Admit It Has a Retention Problem
After pulling back on marketing spending last year, Blue Apron started ramping up its advertising at the start of 2018, and most investors expected that would result in more customers. On the earnings call, CEO Brad Dickerson said the marketing efforts are doing a great job at attracting people to the Blue Apron brand, but it's having a hard time converting website visitors into paid subscribers. When asked about customer retention -- a metric Blue Apron refuses to provide investors -- Dickerson replied, "The challenge for us, we believe, is more on the acquisition side of the business, not on the retention side of the business." He added the retention rate in the second quarter was consistent with the same period last year. But it's been clear since Blue Apron's IPO that the company has a problem keeping subscribers from cancelling. Of course, not every Blue Apron cook is capable of producing restaurant-quality meals regardless of how clear the recipe is. How Blue Apron plans to improve customer acquisition. While Blue Apron might be focused on the wrong end of the sales funnel, it's worth looking at what it plans to implement to see if it addresses customers' biggest issues.