Mike Salguero likes to say that ButcherBox, the meat subscription company that made him a multimillionaire, was “built on bacon.” Though entrepreneurs can often overuse hyperbole and flowery language, this one isn’t an exaggeration.
Early on, when the company was still getting off the ground with a Kickstarter campaign, Salguero and his team told backers that if they reached $100,000 in sales, everyone would get free bacon in their box of grass-fed meat. Naturally, bacon lovers began putting their weight behind the $100,000 target, Salguero recalled in a recent interview with Fortune. And the company made good on its promise, stuffing a pack of top-of-the-line bacon into every box.
ButcherBox soon outgrew Kickstarter and began fulfilling orders from its own website, focusing on a subscription model rather than one-off purchases. Then came the funny part.
“About two weeks in, my engineer called me with a problem,” Salguero said. “He said, ‘it turns out that we’ve been giving everybody free bacon, not just the Kickstarter people. Everyone who signed up. It’s a problem.’”
It wasn’t fixable at the time, he added, because the early code was built in an irreversible way. That meant there was no way of stemming the tide of free bacon. Luckily, Salguero said a marketing leader on his team suggested capitalizing on the happy accident: “‘Why don’t we just tell people: Sign up and get free bacon?’ And that was it.”
Thanks to the technical nature of the screw-up, ButcherBox changed their messaging to “Sign up for ButcherBox and get free bacon in your first box.” The hook worked surprisingly well at bringing in new customers, Salguero found. But they didn’t stop there. When someone suggested putting bacon in every box a customer ever gets, he figured, “That’d be cool.” Thus, Bacon for Life was born. It still exists and a free order of bacon appears in every box for the duration of a customer’s subscription.
It was a brilliant incentive, Salguero found, and it’s helped bring the company to its current $500 million valuation (Salguero himself has an estimated $375 million net worth.) They’ve since rolled out several “for-life” campaigns, including chicken wings, ground beef, and steaks. “It’s a much better value for (customers); they’re getting free products,” he said. “And they sign up much more frequently, so we have built a whole bunch of for-life offers around our business.”
The idea behind the promotions is fairly straightforward, he said. “We’re a subscription business, so we want you to get more than one box.” His team found that “customers really love when they have these additional deals in their box, and we keep them for a much longer time.” That’s a particularly vital stat given how much customer loyalty has cratered for most meal delivery kits in recent years.
That’s not quite a problem for ButcherBox, which boasts 400,000 subscribers and has sent out a $169 custom box to 1.6 million households—and counting.
As for Salguero himself, he’s more of a steak guy. “We have these amazing Tomahawk steaks, and I love cooking our ribeye on the grill—and I make a really killer meat sauce,” he told Fortune. “I’m more of a functional cook. I want to cook something in under 30 minutes and just be done with it.”