Insomnia Cookies was founded in 2003 by Seth Berkowitz as a late-night cookie delivery company for college students craving sweet alternatives beyond the usual pizza.
Pre-UberEats and the like, the founder baked hot cookies and began delivering them to peers that wanted a late-night treat and ended up building a whole QSR category out of it. The company now has more than 185 locations on college campuses across the country, so when the pandemic hit and college students were sent home, they had to rethink their business model.
“The college demographic is so core to our founding story and our brand, so when COVID hit, colleges were the first segment of life that was hit hard,” said Tom Carusona, CMO of Insomnia Cookies. “Harvard and Stanford, schools like that shut down before the rest of us stopped going into work. Those were the first dominoes that fell. For us, it meant that our business was impacted before many other businesses, in a much more intense way.”
“Everybody was obviously hit very hard, but we felt it a few weeks earlier because such a large chunk of our audience started going home from college,” Carusona continued.
Once the college students dispersed, many of them were no longer within the delivery zone or retail footprint of Insomnia Cookies storefronts. With only 185 locations, the company is not everywhere. They might have a single store in one state because it’s there to service a local university.
To adapt to the massive changes in consumer behavior, the company began evolving their ecommerce service and started targeting consumers that lived in college towns and beyond.
Brand Innovators caught up with Carusona from his home in Philadelphia to discuss how the company has adapted to the pandemic and what is next for the campus QSR. This interview has been edited for brevity.
How did you adapt to the massive shift in consumer behavior when college kids went home from school?
In our office, we talk about our customers and our employees as ‘Insomniacs.’ We really try to embrace that culture and mentality. We have a community of Insomniacs. If you work for Insomnia Cookies, you are just as big of a fan of our brand as our customers. One of our core values is ‘We are all Insomniacs.’
So, we thought about what we could do to keep our community connected even though they were being displaced from where they would usually be living during the college semester. We couldn’t deliver to all our customers if they were back home with their parents, living in Montana for example. We had a nationwide shipping offering, but it was never a main focus for us because the entire Insomnia brand was primarily based on the immediate moment of indulgence, the present craving.
How did you make the shift to ecommerce sales?
With nationwide shipping, we didn’t want to become another boring send-me-cookies-once-a-year company, it wasn’t a part of our DNA. But, the reach we had with our nationwide shipping business created an opportunity for us. So, we decided to use that business to connect with our Insomniacs no matter where they are. We started really promoting that with an aggressive pricing promotion – the pricing for nationwide shipping was usually higher because it’s a premium gifting service with extra wrapping, as opposed to an immediate experience.
We changed the pricing for our 12-pack, one of our most popular gifting items, to be the same exact price as if you ordered it for delivery locally. That was the first thing, and it extended the delivery zone of Insomnia Cookies nationwide. It might take a day instead of 20 minutes, but it’s still a way to get cookies to Insomniacs no matter where they are.
It was a real ‘We are all Insomniacs’ kind of moment. We did that within a day or two of the closing of schools. It allowed us to stay connected with customers immediately after. We gave them incentives as well with extra discounts when they received their packages, like a bounce-back for their next few orders. We wanted to keep that connection as strong as we could.
How did you use this new delivery business to expand your customer base?
We used that same mentality when thinking about the millions of people who still lived within our footprint. They might not be our core customers, 18-24 female college students, but we wanted to bring more of those customers in. We went store-by-store and we assessed delivery zones. That’s another thing that we are really lucky about, we had delivery already built in to our brand. We didn’t need to pivot to figure out how to join the delivery business, because it has always been core to Insomnia Cookies.
We had the nationwide delivery, covering the displaced Insomniacs. But then we wanted to bring in new Insomniacs, because we believe that everybody loves cookies. Now more than ever is the perfect time to share a warm cookie. We tried to figure out ways to build out our business within our local footprints. We looked at delivery zones and opened them up.
We captured data of demand, mapped it out, and found areas where we could expand our delivery zone. We knew our delivery business wouldn’t be as strong as it was when we had all the college students, so we were now able to deliver to a larger subset of people. We scouted the delivery zones that way and deployed digital marketing to bring people into those zones. Then, from a community neighbor standpoint, we just started connecting with local first-responders, hospitals, and bringing them cookies. We wanted to build some goodwill with that community who was out there on the frontlines.
How have you adapted your physical locations to suit the needs of consumers in pandemic times?
With the ‘We are all Insomniacs’ mentality, it was really key that we connect with our customers, but we also wanted to keep our stores safe. As a restaurant, we were an essential business. We needed to keep our employees and customers safe with new safety protocols, and upped our curbside pickup technology to be a bigger focus.
Between the safety, the expanding of delivery zones, and the focus on curbside pickup, we really built out our business on the local level. We also focused on evolving our occasions. Like I said, we are built on the idea of immediate indulgence, but everyone sends cookies for holidays. We started to embrace the idea that Insomnia Cookies is the cool company that you can send people cookies from. We also connected more with key occasions.
What holidays have been working for the brand?
Traditionally, 4/20 is a big holiday for us due to the late-night aspect of our brand. Suddenly, Mother’s Day became a big holiday for us too, because parents who were typically funding their children’s college purchases were seeing these cookies come home, or kids were sending cookies to their parents, aunts, and grandmas. We began to focus more and more on gifting occasions and figured out where our brand fit into the mix. Insomnia Cookies is a strong brand, we have personality and fun. It is a little bit of an alternative to the boring cookie tin that grandma has in her cabinet (no offense). We have a wink and nod to our brand. That served us really well. We continued to stay true to our core brand essence and not become sterile. We wanted to make a fun experience even if it wasn’t immediate or retail.
What are your brand pillars and how has these foundations helped you adapt to the pandemic?
When I started, our office tagline was ‘Warm. Delicious. Delivered.’ We have started to adopt that as our core brand essence. Warmth: Whether it’s the warmth of our cookies or our customer service and interactions we have with our community of Insomniacs, warmth will always be key. Our number one priority is to serve the cookies warm. Even when we send the cookies nationwide, obviously they can’t be warmed when you open the box from FedEx, but the first thing you see is a giant sign that says you should warm the cookies before you eat them as they are best served warm.
Delicious: I don’t think I need to explain this one, but our cookies need to be awesome. If we are serving ice cream, it needs to compliment the cookies, it needs to make them even better, and the cookies need to make the ice cream better too. That deliciousness and craveability, the mouth-watering nature of cookies needs to come through at every touchpoint.
Delivered: Similarly, ‘delivered’ has to do with delivery, but also the idea that we are delivering on our promises to consumers. That is the essence of our brand and we try to stick with it. Our personality is what wraps it all up. I’m not going to read all of our personality traits, but it’s a late-night, warm cookie delivery, open until 3:00 in the morning. It already suggests a lot about what the company is from a personality perspective. We try to lean into that and have a lot of fun from a communications and messaging standpoint.
How has your media shifted since campus life is either closed or not what it used to be?
A lot of the marketing we were doing was hyperlocal. Being involved with fraternities and sororities, being at local football games, we had hundreds of brand ambassadors that were working at our schools and campus locations to build the brand and community relationships at a deep level. Obviously when that goes away, the students were gone so we didn’t have that anymore. We shifted right away and decided to put the brand ambassador program on hiatus. We took that and shifted it to more scalable, targeted media effort. We moved the dollars into social, digital, and were a lot more prescriptive with how we were using our money. That was the big shift for us. Then, we played around with other things in the digital space.
What do you think your marketing will look like when you reopen?
It will be a bit of a hybrid going forward. We were really lucky in the fall, because even though a lot of schools were not technically back in session live, students were back. Parents had already committed to dorms and apartments, and students wanted to get out of their houses. We didn’t know what was going to happen but we were lucky that a lot of the college students came back. That was massive for us. But, we didn’t go back to that hyperlocal event-driven marketing, because it just didn’t make sense.
Also, we were able to be more scalable in the way we are working now, and we have restructured the team to be that way. This semester was the same, a lot of the students were on campus even though school was still hybrid or virtual. We are continuing the same strategy. We have grown though, we have brought in new audiences and segments via gifting occasions, and we will push that as much as possible. This was the biggest holiday season we have ever had, Valentine’s Day too, but we still don’t want to lose focus on the core.
