Four Tips for Third-Party Delivery
Restaurants are in a lose-lose situation when it comes to third-party delivery integrations. If they don’t implement third-party delivery services, they miss out on an increasing percentage of volume & sales. If they do commit to outside delivery services, they lose control of a large part of the customer experience, including valuable consumer insights and data.
According to a recent NPD Group article, digital ordering now represents over half of all delivery visits, which supports the recent increase of delivery sales by 20 percent. “Delivery has become a need to have and no longer nice to have in the restaurant industry,” says Warren Solochek, senior vice president, industry relations. “Restaurants need delivery in today’s environment in order to gain and maintain share. It has become a consumer expectation.” Another research group from the National Restaurant Association found that 63 percent of restaurant traffic is now off premises nationwide.
With demanding customer expectations, restaurants are now expected to provide an easy, familiar delivery service such as DoorDash, Uber Eats, and Grubhub. Here are four steps to knowing that you’re totally crushing it with your third-party delivery.
Step One: Simplify Your Third-Party Menu
Third-party delivery services are taking up to 30 percent of each order. For some, this is getting very close to the break-even point for more expensive store locations. Most restaurants simply “mark up” their pricing for DoorDash. While this may be wise to increase your margin, it also increases your fees to DoorDash. A group of McDonald’s franchisees said their “margins do not allow for the commissions that UberEats is taking.”
The Solution: One way to decrease your costs is to take your lowest margin products off of your third-party menu. Try to only sell higher margin products on third-party websites. But, what if low margin products are critical to your business? There are other solutions. Another way to decrease costs is to implement the DoorDash Drive Integration through your POS. Instead of commission based on percentage, you choose how much you share with your customer on a $8 flat delivery fee. Don’t know what that is? Click here to find out more! (Side note: only certain POS systems have this integration, so if your POS doesn’t have a DoorDash Drive integration, this is something you’re seriously missing out on and something that saves CRISP’s customers hundreds of dollars per month)
Step Two: Take Action to Improve Your Third-Party Customer Experience
Restaurants spend enormous investments and long hours to create the ultimate customer experience; however, all of this is drastically changed the second third-party delivery service steps in. The tangible representations of the store’s personality, the unique vibes brought by the people, and the appreciation delivered through service are all lost when someone decides to deliver through an app that isn’t yours. When customers have a bad experience through delivery, it leaves a negative impression on your brand that you can’t avoid. In the 2016 Technomic study, 76 percent of responders said they hold the restaurants more responsible for any errors than they do the delivery service. You must take control of the delivery experience as much as you can, because when implementing third-party delivery, you frankly have no idea who is going to be delivering your food to your customer. (Let’s hope they’re nice?)
The Solution: Make up for the lack of in store experience by thinking of ways to build the customer experience in your packaging.
Think of the experiences customers have in your restaurant that can not be found in the food. This might include the music, kind employees, retro booth seating, or the type of uniforms/costumes you wear. Then see if you can recreate that experience in your packaging. This may sound difficult to achieve, but small things can make a big difference when people open their delivery package to find something unexpected and fun.
Step Three: Own Your Customers & Your Data
When customers choose a delivery service, they are required to create an account providing their name, email, address, and phone number. On top of that, the app can track what type of food, when, where, and what time they order. This customer data is monumental for businesses to adapt to growing trends. This prevents your business from gathering, analyzing, and adapting to valuable customer insights. If third-party delivery services take this away, they are taking away precious data required to move your business forward. The delivery service may also use this data to target your customers with marketing messages that will incentivize them to continue using their service instead of yours.
The Solution: Focus on improving your direct order vs. third-party order ratio.
At Crisp, we really focus on making sure our restaurants’ customers are ordering directly through them and not through a third party website. This is how you win, and this is how you keep all of your margin.
This means if you don’t have a good online ordering platform via your website, get one. One way to go the extra mile in this area is getting a client branded mobile app. Yes, imagine the possibilities if instead of a DoorDash app on your customers’ phones, it’s your restaurant’s app on their phone? Before you say it’s too expensive for that, check out how CRISP does this for their customers for less than $100 a month!
Step Four: Make Sure Your Customers Are Loyal to You, and Not Third-Parties
In a 2018 study, researchers found that consumers with an emotional connection to a brand have a 306 percent higher lifetime value, stay with a brand for an average of 5.1 years vs. 3.4 years, and will recommend brands at a much higher rate. When customers use delivery apps, their loyalty can shift to that service in order to receive incentives and discounted rates for delivery fees.
The Solution: Invest in Technology That Keeps Your Customers Loyal
With all the different ways to order (in person, third-party, online), it’s extremely important that you make this process as simple as possible. Can you imagine the complications if your online ordering isn’t on the same system as your point of sale? Or if your third party orders have to be babysat on a tablet?
CRISP’s technology is the answer. CRISP is designed to help boost your sales and increase customer loyalty participation. The advantages to using an all-in-one system are endless when compared to piecing together integrations. The data, the increased customer loyalty, the simple training, I could go on forever!
While you may have no choice but to stick with the trend of third-party delivery, we DO have the choice to use CRISP to take your restaurant to the next level. Schedule a demo today and find out more.