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How to build a subscription business—case study with Alexander Organics

As a so-called townie living in the quaint little Waikato town of Cambridge, I was really looking forward to going out into the countryside to meet with Ellen, owner/operator at Alexander Organics. From a marketing perspective raw milk is just so buzzy and Ellen and Jesiah’s story is an interesting one. 

At a more personal level though, it’s because for months I’ve been hearing whisperings around Cambridge of this family run business just out of town who’re selling raw milk on-tap and their innovative ideas have been all over my local social media grapevines. So because everyone was trying it, and because I‘ve never tried it (the thought of it made me a little squeamish to be honest), I wanted to give it a go.

So off we went, Grant Johnson, co-founder of Rocketspark and I, into the backcountry—with GPS. As we approached, our first-impression sensors went BOOM WOW! A trendy little wooden cabin, overflowing with charm and warm fuzzies welcomed us. 

We hopped out the now-dusty car and headed into the farm gate shop bursting with enthusiasm—but there was nobody there. We explored a bit and discovered all kinds of treasures like a fridge packed with sprightly organic vegetables, a basket with eggs and a photo wall of your milk manufacturers—the dairy cows, all neatly named. Then in came Ellen.

Ellen is young, super confident, and just so personable. This was the first time I’d met her in real life but because Alexander Organics had been Rocketspark customers for around 5 months now, we had been in touch via email a couple of times so I kinda felt like we were already well enough acquainted for honest conversation.

Pre-pandemic

With a store, set in an exquisite rural location at their farm gate, Ellen and Jesiah are selling raw milk, free range eggs and organic vegetables. Their store isn’t staffed during the day, and they sell veg and eggs by the honesty box system—kiwi as.  The 50 hectare dairy farm is leased from Ellen’s grandad David and although the land wasn’t historically set up to be organic, they decided to start afresh and do things their way.

According to Ellen, their passion for organic farming didn’t come about overnight. In fact, over the past few years she and Jesiah, as many people have also, have become more aware of the health benefits of organic produce. The saying that once you’ve learnt about organics you can’t unlearn about organics has stuck with her and it’s the reason they’re now so committed to this way of farming.

It’s been a journey, and almost everything they know about organic farming can be attributed to a friend, and mentor of theirs who’s been farming this way for a long time already. Being tactile learners they've furthered their learning by spending a lot of time on a number of different organic farms around New Zealand’s North and South Islands.

Environmental benefits & healthy happy cows

Organic farming is more than just a job or a business for this couple, it’s a passion. It’s a regenerative way of farming that they’re determined will be sustainable for them, and for us. Seeing the soil buzzing with life - from the fungi and bacteria thriving around all the healthy roots, to the nematodes and protozoa doing their part. The cows also live a more natural lifestyle where antibiotics and other conventional medicines are not part of their day-to-day milking career. These cows have strong immunities and minor issues are dealt with before anything turns clinical and needs organic or conventional intervention. If any conventional treatment is ever needed on an animal, the animal would lose her organic status for life and so when this ever occurs, is removed from the organic herd and sent to Ellen’s Grandad's farm, which is a conventional farm.

Selling direct to customers at the farm gate

The Alexanders decided to build The Shop on the roadside of the farm to enable easy access, and mitigate any risks of biosecurity/contamination issues. It’s also a great way for customers to see the farm and where the produce is coming from. 

Selling raw milk online encounters challenges

There have been lot’s of challenges and Ellen opens up about the fact that they’re still getting to grips around the mechanics of delivering milk to their customers. There are restrictions around selling raw milk and so they’re constantly making sure that they adhere to these guidelines. They’ve also had to educate some customers about raw milk, and also the process of buying online on subscription.

Working with a tight budget and being solely responsible for the marketing side of things, a website allowed Alexander Organics to reach a much wider audience than what they previously had and so right at the beginning they decided to get one. Hearing about Rocketspark through recommendations, Ellen liked that they could build their website themselves, and get most of the ground work done with help from the Rocketspark team. They were happy with what they managed to achieve but wanted that extra level of polish that a great designer could deliver. Jeremy (co-founder & designer at Rocketspark) recommended they hire a Rocketspark Design Partner, someone that would add the finishing touches to the website, and so they did, working with Natalie White from Magic Fingers Graphics.

Recurring orders and payments

Operating a small business requires constant innovation and development based on what people want and expect. Having already started to receive a flurry of requests from customers wanting an easier and more convenient way to shop, they took heed and the online shop was born.

Talking with Ellen, it’s clear how selling raw milk online on subscription has clear benefits for the customer and for their business. When a customer buys milk on subscription, they are reducing their travel miles while still receiving their raw milk on a regular basis, which is convenient for them. Adding Subscriptions to a business model gives you more certainty around income and allows you to plan supply and demand more easily. The way Alexander Organics have introduced Subscriptions is with a soft launch giving them time to set up and perfect delivery and other logistics. Only once they’re satisfied that they’re able to consistently offer and deliver the plan they’ll be doing marketing to increase sales, says Ellen.

Of course innovation in any business requires you to do a bit of homework. To find out the feasibility of adding milk Subscriptions to Alexander Organic’s business model, Ellen sent out an online survey to all their customers/leads using Mailchimp. 

What came as a surprise was that the health benefits of whole raw milk wasn’t the main driver for sales but rather that the plastic-free aspect is even more of a motivation for a lot of customers.

With this insight, Ellen’s now using Mailchimp’s ecommerce integration with Rocketspark to market to existing and potential customers who fall into this target audience, and who also live within their delivery area.

Delivery of raw milk is done in-house, with plans to expand with the help of their extended family members. This way ensures customers get their milk in a timely manner and that the milk is well looked after on it’s journey out to them. It’s still early days but Ellen assures us that they’re working on a plan that’ll allow them to offer customers the most economical, convenient option, while still covering any operating costs.

Building a customer database

To capture new leads, Alexander has a ‘Subscribe to the occasional Newsletter’ pop up for customers browsing their website. But that’s not the only way they are building up their customer audience list in Mailchimp. Under MPI regulations in New Zealand they’ve had to ongoingly compile a list with contact details of all customers who buy raw milk—this can be good.

To convert leads into customers, and also build that loyalty with their existing customer base, they send out the occasional newsletter from their Mailchimp account. 

I mean, this is definitely a good start but from the insight I’ve gained working for Rocketspark I can just see a million opportunities here, and Ellen knows there’s a lot more they can do in terms of email marketing, abandoned cart reminders etc. My nagging's paid off because at the time of writing this, Ellen’s already started using Mailchimp’s ecommerce integration with Rocketspark—awesome!

When Ellen asked Grant about how to manage a master stock level that can be broken down into smaller units, he recommended exploring TradeGecko as it has the features she mentioned and also the ability to create products in your shop that draw from the master inventory when sold.

By connecting their Rocketspark website with TradeGecko, she’d have access to advanced inventory tools including inventory forecasting, inventory reporting, backordering, stock purchase orders and more. Any orders they receive on Rocketspark will automatically flow through to TradeGecko, preventing stockouts.

Adapting your essential service business for COVID-19

Because I’ve been watching this business with interest lately I’ve seen how from the very onset of COVID-19, Ellen and Jesiah have been fast to respond, and like many businesses have kept their existing and new customers updated and informed via email and on their website about any changes to their services. By doing this, they reassure their audience that they are keeping versed on developments and even more importantly, that they’re still open for business.

They’ve also just recently added Veggie boxes to their online store under a subscription-only purchase option and again doing a soft-launch and just selling around 10 boxes per week. 2020 Spring will really get the Veggie box subscriptions business cranking as they’ve set up a larger garden that’s going to be bursting with fresh organic goodness when the time comes.

The Shop will remain open during all stages of the NZ Level 4 lockdown, however they've implemented a ‘only one person/family in The Shop at any time’ rule amongst other measures to further ensure everyone is safe, and still has access to fresh, raw milk.

Although COVID-19 hasn’t impacted the Alexanders existing regular customer base as it’s still convenient and safe for locals to come out to The Shop, the addition of Subscriptions to their online store has definitely increased the purchase regularity of those customers living further afield. 

They’ve also attracted a whole new customer base of online shoppers, even before the lockdown which has seen sales increase substantially. Delivery orders are coming in real quick at the moment, largely due to people wanting to stay home. People living locally are also seeing the benefit of being able to shop nearer to home, which Ellen has been seeing from sales at The Shop having also increased since the lockdown.

When I asked Ellen whether she had any advice for businesses considering Rocketpark’s Subscriptions feature for their online store, she suggests a soft launch approach because it buys you time to make any small tweaks to your website or delivery if needed, without great impact to your existing customers. Utilise the Customer Accounts feature and educate your customers about how to use it because they appreciate that they can go in and easily manage their account. It’s about convenience and giving them control.
 
At first Ellen was very nervous about moving from the Ecommerce Grow website plan to Rocketspark’s Ecommerce Pro (the creme de la creme) but after reassurance from the team and given the opportunity to trial the Subscriptions feature they soon realised it was a no-brainer. They’re learning as they go, but so far Subscriptions is showing potential to be a good way to retain customers and generate another income stream for the Alexanders.

While we were talking with Ellen, a gentleman walked into the room with his two glass milk bottles—clearly not his first rodeo at The Shop. Ellen greeted John by name and they conversed like they knew each other well. Living on the farm just next door, he comes over to buy milk a few times a week because it’s the only milk his family drinks and it seems like it’s just part of their weekly routine.

So Grant is keeping me in check and while I’m talking to this lovely gentleman, time is ticking by and it’s nearly time to leave. I take a few photos while Grant buys some raw milk for the office and some organic veggies to take home with him to Papamoa later in the day.

Ellen talks, we listen.

Honestly, we’re well aware that the Subscriptions feature might not be suitable for every business, and because we’re continually working on improving every aspect of our business, we wanted to know if there is anything, any feature she’d like to see added to our ecommerce website builder that would make a positive difference to their business.

Ellen's suggested more options for editing quantities at the checkout so that online shoppers are even clearer about what they're purchasing. So we make notes, shake hands (still socially acceptable at that stage) and we head off into the distance, but this time without GPS. We get lost, fire up the GPS again and we arrive at work, just in time for afternoon tea. Only in this case, a raw milk tasting session that leaves the entire team wondering if they’ll ever be able to go back to supermarket milk again.

Learn more about Rocketspark’s Subscriptions feature here.