The Crumbl Layoff, Cookie Wars and RFM
Recently I caught the news and read where Crumbl had a lay-off at corporate headquarters. They’ve been in go-go growth for many years now and have over 900 stores nationwide. The adjustment is not entirely surprising, although still disappointing. Growing through the mid-market and into an enterprise organization is a tough gig and many companies bump their head on the billion dollar ceiling. However, that’s not my focus today…
Today, I want to talk about RFM (recency, frequency and monetary value) and perhaps poke fun at the Utah “cookie wars” just a bit. For those living in Utah, the legal battles between Crumbl, Dirty Dough and Crave are no secret - it’s more like a public feud. I’m persuaded that the layoff and the legal tangle are unrelated. I don’t believe the legal dance of these three companies has anything to do with Crumbl reducing their overhead a bit. The timing is noteworthy, but for me, unrelated.
Once in a while I buy a few Crumbl cookies. The Crumbl staff dutifully asks for my phone number, which I gladly give… and then nothing. No offers, no text messages, nothing from the local franchise owners. In today’s market I’m a little stumped, given that Crumbl thinks of themselves as a technology company.
The real war between these cookie companies has less to do with legal maneuvering than with tending to customer relationships. Take a look at the illustration below. It’s overly simple, but hopefully gets my point across.
The chart points to the relationship between frequency of purchase and how a customer might engage with the brand. Think about it: how many cookies can one person eat every week? One, two, three… a half dozen? Seriously, how many people do you know that eat through a pink box six pack of Crumbl cookies every week? And if they do, how soon will they land in the hospital? :)
All kidding aside, it’s important for companies to understand the purchasing behavior and patterns of their customers. RFM is a wonderful tool for doing so and when illustrated often creates “aha” moments that impact strategy, product offerings, operations, routes to market, marketing channels and margin models. Although the chart above is incomplete and represents a blind build on my part, IF the Crumbl base looks anything like what is shown here, Crumbl and their franchise owners across the country know what’s happening with their customers and which ones are most impactful in their continued growth. They also might know what adjustments need to be made, even by taking necessary steps – to avoid the next layoff – or to crush their competition.
Crumbl has been on a growth tear since their early days and maybe it will continue. Or maybe the recent layoff is a sign of troubling days ahead. Debbie Fields of Mrs. Fields Cookies would be a good person to ask on that question.
And just for grins and giggles, last Wednesday I sent a note to Jason McGowan, CEO of Crumbl, with a few thoughts on Crumbl stores and their use of text messaging… this morning, I see the following post on their Twitter feed:
What a nice way to ask their customers if they want to receive text messages about cookies. Coincidence? Probably… in either case, it’s a smart move to ask your customers what they want, especially when it comes to text messaging. Texting can be very intrusive and it’s conversational at its best. It’s not just another channel by which marketers can pump out promotional offers.