by Tim Jahn on October 29, 2010
Earlier this year, I interviewed Mari Luangrath to discover why she created an online cupcake delivery service. Since then, Mari and her team have achieved a 600% increase in revenue and worked with over 100 Fortune 500 companies in the Chicagoland area.
Watch my video interview with Mari to find out what techniques she used to increase revenue and land such high profile clients!
Foiled Cupcakes is Chicago’s first online order, and personal delivery cupcake service. So we deliver all over Chicago and the western suburbs for now.
You said that you’ve increased revenue over 600% since you started. That’s a lot. How did you do that?
We — we’re just really fortunate. I think that we have a great combination of luck, and a great combination of good recipes, and a great service team who have really just caught the vision of what we really want to represent in the Chicago community as far as cupcakes go.
We don’t want to be known as the cupcake shop that you stop into, and you eat cupcakes and that’s it. Like we want it to be a really good positive experience for anybody who orders cupcakes from us. And so we do our best to make sure that from start to finish, they have a really great experience. And —
And you also said that you’ve also worked with a 100 of the Fortune 500 companies, or 100 companies of that status. How did you land those companies as clients? I mean, that’s pretty impressive.
Yeah, you know, its — again it’s probably 80% luck, 20% strategy. But as far as it goes like word of mouth is huge obviously. Word of mouth advertising is way more powerful than I think traditional advertising. And if somebody says, “Hey, you should try these cupcakes.”
That’s a lot more powerful than us saying, “Hey, you should try our cupcakes.” Right? And so what we’ve done as far as the strategic element goes was we really tried to focus in on people who worked, or had decision-making ability at these organizations. Because they’re ultimately who we figure sort of our target customer is.
We do all of our deliveries between eight and noon because we know that the majority of office parties happen like right after lunch. So we want to make sure that all the deliveries happen before noon. And so we knew that that was our target customer, and we knew that we needed to figure out a way to reach them.
One of the strategies that came to mind that we employed was just to join some admin groups on LinkedIn. You know, admins, they are very, very savvy, very powerful gatekeepers at businesses. So we knew that we had to network our way and get in with those groups. And so to be able to reach an administrative professionals group and say, “Hey we want to do a presentation.” Getting in with those organizations.
Again, a lot of it is luck because we are fortunate that we have a product that nobody hates. You know what I mean, it’s like nobody’s upset when we say, “Hey, we’d like to bring cupcakes to your next administrative professionals meeting.” They don’t say, “No, that’s the worse idea ever.” Like they never say that. And so we’re very fortunate. But that part was probably the only strategic part.
And after that, it was just sort of word of mouth and people said, “Oh this is great.” And then they told their friends, and then people in those circles they hang out with each other. And so —
How did you find your first corporate customers? How did you find — when you decided you were going to approach — that’s your target market, the corporate customers.
How did you actually find them? How did you — the first five, how did you actually get them to be your first five customers?
You know, honestly it all — I think, and I’m not 100% percent sure but like I think that we could trace them back down to twitter. Because there are people at these businesses who are on twitter and they hear of a cupcake place and they’re like okay. I mean people have work lives and they have personal lives. And you can reach an individual who has a corporate buying power, and they just see you on twitter.
And I’m pretty sure that that’s how these, this rollout of engagement with businesses started. I can remember in particular like, I think it was last summer. Last summer someone said, “Hey, we want to get cupcakes for my boss’ 50th birthday.”
And we didn’t even have a website up. And so we’re like, oh, okay. So we made it work, but I mean, they heard about us on twitter, and then we had that relationship with them through that platform.
You said that luck played a part.
What — how did luck play a part?
I think it’s a combination of being in the right place at the right time, knowing the right people. People will say that entrepeneurship a lot of it is luck. And of course a lot of it is smarts, and a lot of it is just taking advantage of certain opportunities when they become available to you. But, if I were to attribute this to like how smart any of us are or that would just be total BS. That would not be accurate.
It would — more than anything its I think just the fact that we are really committed to engaging with people in the Chicago community, and just getting them on board, and getting them a chance to get to know who we are, and get to know that we’re authentic, and that we really do care about the experience of eating cupcakes. It seems like such a trivial thing to care about.
But like when I first started the business, it was sort of like, it was the beginning of the recession, we wanted to give something to the community that would bring people together, and that would be an affordable luxury, that would be something that they could enjoy with their family and friends. And we wanted to make sure that from start to finish, they had a really good experience.
And so that part of it was strategic. But as far as people like latching on and being supportive of the brand, and us finding social media as a venue for us to like as a platform for us to get the word out, that was all just by purely by talking to the right people and being in the right place at the right time, and acting on things that we felt intuitively would be okay.
You’re an online company in a traditionally brick and mortar world. You know, Chicago’s home to dozens of cupcake shops that have actual stores on the street, where you can go in, experience their atmosphere. But you guys have done insanely well. But you are online only. How do you recreate that atmosphere, that special touch?
You know, I think the first thing is that we don’t try to be one of those cupcake shops. We don’t try to recreate the experience of walking into a shop. Like you can’t because it’s a very sensory experience. Like you smell the cupcakes, you smell them from down the street. You visually see the cupcake shop.
We can’t recreate that, we don’t have that storefront. But what we can do is take some of the things that we think are really valuable in a consumer business relationship.
Like for example what we do is we surveyed a bunch of people and we said, “Hey, if you were going to order cupcakes from us, what would be the most important thing for you to make sure that you would order from us again?” And they said, “Make sure it’s on time and reassure us over, and over, and over again that you know that we have a delivery on tab.”
And so, that’s how we built out our seven step touch point with the customer system was when a customer places an order, they get an email confirmation, they get a phone call confirmation right away. They get a phone call confirmation the day before, they get their cupcakes delivered. We send a thank you note, we also follow-up afterwards and we say, “Hey was everything okay with your delivery?” I mean, we have a lot of engagement with our customer.
And I think being online actually is a huge benefit for us. Because when people come to our website and place an order, we collect all their information. And that way we’re able to have that relationship with them. Whereas like for you when you walk into like any store, like any retail store, it’s not like you have to basically hand over your personal information to them.
Like they basically bribe you to — they say, “Oh, get on our email list and then we’ll give you 15% off.” So we’re getting all this information, we’re finding a way to connect with the consumer. We have — like I can tell you that in our customer relationship manager, I — we have record of every single person who’s ever placed an order with us. Who has ever placed an order, or received an order from us.
And that is like super valuable information, and its information that we are using to our advantage to make sure that we always have a good relationship with the customer.
How is Foiled Cupcakes different than any other cupcake company whether its brick and mortar or online?
There are a few things that make us different I think in the way we work. Our philosophy for work — like for me I know because I’ve worked in places where I’ve done stuff that I don’t like at all.
And I have a five-year-old son and I can tell him what to do, and I can be like, “You need to practice your handwriting because otherwise you’ll never get good. You need to not spit on the carpet because that’s not polite.” Like I can tell him what to do and what not to do.
But like as far as people who — I think a huge portion of what makes us different is the staff and the people who are a part of our team. Because we all have unique capabilities and very unique talents. And I feel like we’re all adults. And the way that I manage our pastry team, and the way that I manage our administrative team is much less of, “Here are your tasks, A, B, C, D, E, F, G.”
Moreso because we’re a small business, we have the flexibility to do this. More what I say is, “Tell me what you’d like to do. What are you good at? What do you excel at? What do you enjoy? Tell me what you don’t like to do. What do you hate?”
Like for me personally, I know that I am just not good on the phone. I just don’t like making phone calls, it gives me anxiety. I just don’t like it. So you know what I did was I hired somebody who was like, “I love being on the phone.” I’m like, great. So all phone calls go to her.
Thinking about in our pastry team. Like everybody knows that I don’t bake. So, but what can I do? When I’m at the kitchen, what can I do to help out? Like I fold boxes. That’s where my core strength is in the kitchen is folding boxes. It’s pretty pathetic.
It’s got to be done.
But it’s got to be done, right. That’s like my only contribution to the entire production. But then there’s Katie, and she’s really good at operations. Like she loves taking operations, and making things organized, and making things systematic, and making things as fluid as possible. And that is her forte and she loves it. So I said, “Katie, here is your operations project.
Run with it and do what you want to do with it.” Like I give people the flexibility I feel like to say, “I don’t like to doing this, I’m getting tired of this, I’m getting bored with this.” And then we just are able to rotate projects and we’re able to take on new tasks. And that I think helps us keep things fresh for everybody internally and helps us service the customer better.
And I mean, I don’t know if that makes us different necessarily, but I just know that when I was in the corporate world, there was no negotiation, it wasn’t like I could go to my boss and say, “Hey I’m getting a little bit bored of my projects, can I get something new?” It wasn’t like that.
So just giving people the flexibly and saying, “Hey I understand that if you’re not happy working with what you’re doing, then you’re going to quit. So I’d rather keep you around, and keep you happy. So let’s figure out a way so that we can both benefit.”
What’s one piece of advice you have for someone who was in a similar situation, who wanted to start a business like yours. Not to copy a business, but if they had an idea and they actually needed to execute. What’s one piece of advice you’d give them?
Yeah, its so cliché but its just listen to your customers. I feel like with our product and what we’re, what we’ve done, it’s totally been built by the customer. Like I wasn’t set in a particular way of, “Oh we have to have these flavors and we need to deliver like this and we need to do this.” It was more like what are the needs in the market, what are the holes out there, and how can you be different enough that people will recognize that you’re different and people will talk about you? Because if you don’t have anything sustainable to talk about, then you just sort of become one of the many.
So like I guess my advice would be just find out where the gaps are, what the needs are, figure out who wants those needs to be filled, talk to them and see what would they want. And they will probably be your first advocates for your business. Its just basic marketing I think.
But a lot of people think, “Oh I have this great idea and I’m going to make it happen”, without talking to anybody, and without assessing is this actually a viable, sellable product or service.
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