Deflect Third Party Restaurant Delivery
Third party delivery provides a lot of value to many restaurants which includes acquisition of new customers, online ordering for purchases and delivery operations BUT it’s often expensive up to 30% of the bill. Third party is neither good nor bad to the restaurant industry, instead it’s a potential tool for your restaurant model. So let’s breakdown the value and look at how you can evaluate what parts of the value you can bring into your own business.
Delivery Operations. Is your business “wired” to do delivery? Although some restaurant segments (like pizza) have made delivery a key part of their business for decades, most restaurants don’t offer the service. If it’s new to you what’s involved in success for yourself? You need to be able to handle the changes to the kitchen, packaging, driver staffing, driver coordination and liability insurance. For most restaurants that’s a lot. Software can definitely help.
You need to evaluate your menu. Not all food ships well. Don’t be afraid to reduce your menu and also to add a few delivery only options. Also, consider how much you want your average or minimum order ticket to be. Do you want to tie up a delivery driver for an order under $10? If not then consider having a minimum delivery amount or attach a delivery fee that get’s waived when you hit a minimum order amount.
Your kitchen can use delivery make stations. Make pulling together orders to be correct every time someone’s main focus. Nothing can alienate customers more and waste delivery driver more than missing or incorrect items. Make it a main kitchen responsibility to get it right every time. Of course flagging orders for delivery is critical so make sure your order tickets and KDS (kitchen display system) spells it out loud and clear. And, double check every order, every time.
Upsell every time. Kiosk ordering is known to be an upsell monster (as much as 27% higher ticket average). The incognito of ordering combined with always offered upsells on kiosks is also best practices for your online ordering. Don’t miss it.
Online Ordering. You can handle the online ordering, digital menu maintenance and even the driver staffing/delivery coordination. But to go along with that you’ll need to make sure your online orders can incorporate into your store POS and get appropriately tagged in the KDS (kitchen display system). You’ll probably also want lots of detailed printed tickets that can be attached to the containers and easily flag delivery items, customization and delivery instructions to your kitchen staff, drivers and customers (color printers help here).
Customer Capture. You know you need to market your restaurant. It’s time to focus those efforts online. So how do third party delivery companies do this? They market online and place digital ads in front of people on Google, Facebook, Instagram, etc. And there is no reason you can’t too. A good place to start is Facebook.
Here are some tips:
- Focus on a physical radius around your store. Pick your delivery radius and include it as one of the limits on your ads.
- Focus on your primary food category. For lowest cost and best revenue impact, pick the single food type that is ordered the most and delivers the highest average ticket… pizza, ribs, burgers, etc.
- Use 3rd party delivery service as a general category or by name (i.e. uber eats, grubhub, etc.) in your ad. Yes, you can pick up customers searching for third party delivery and bring them direct!
We’ve picked up pizza customers for as little as $2.73 per order on an average $38 ticket. At around a 7% marketing cost most restaurants will find this inline with acceptable customer acquisition costs.
Email marketing. Keep in touch with your customers at least once a month. Email is still the lowest cost way to keep in touch with customers. It’s more cost efficient than advertising and social channels. Plus it allows you to include rich media like photos or mouth watering food and include calls to action with limited time specials or food items. With tools like Mailchimp and (include #2) you can keep your food top of mind to existing customers for less than 3 hours a month of time and under $50.