When you’re attracting diners into your restaurants, you’re doing more than selling just food to them.
You’re selling an experience.
The way food is arranged on the plate.
The list goes on.
However, this approach doesn’t represent the entire playing field of the restaurant business.
That’s because 86% of consumers now use a food delivery service at least once per month.
Reaching these consumers is becoming increasingly important for the sustainability of your restaurant.
From the same report above, we also know that people are more likely to:
- Spend more for faster food delivery
- Reorder within 60 days from their first order compared to walk-in customers
- Dine at a restaurant if they enjoyed an online delivery from there
Dining in and ordering delivery go hand in hand.
Offering food delivery means you can increase your reach and target a broader audience. Knowing that some of them may turn into a dine-in customer, it looks like a win-win situation.
With 70% of all food delivery orders being placed through mobile apps, online ordering is the best way to ensure the longevity of your restaurant.
As a result, many restaurants choose the easiest way to start: online delivery services like Uber Eats, Deliveroo, PostMates, and others.
It seems simple enough for several reasons:
No need for additional hiring, payroll (although you’ll pay a per order fee for the service), and admin.
No need to own and maintain delivery vehicles.
And the biggest one of all: you gain access to an already-built audience that these services have; it’s easy marketing.
However, there are significant downsides to using such online delivery services.
There is also a way to avoid using them altogether and implement a strategy you control—and it’s more profitable.
Services Like Uber Eats Will Eat Your Profit Margin
There’s a chicken and egg question that comes up in discussions of the value of Uber Eats and similar services to restaurants.
On one hand, they cost the restaurant anywhere between 15 and 35% of the sale they make. You just received a $35 order through Uber Eats? They’re taking a third of that and you get the rest.
On another hand, these services argue the sales they bring are the cherry on top of what you’re already attracting. In other words, it’s not a loss for you; they’re bringing in sales you otherwise wouldn’t get.
However, a survey quoted by The New Yorker revealed 43% of delivery patrons said a meal they ordered in was replacing one they would otherwise eat at the restaurant.
When you consider that restaurant profit margins range from zero to 15% and mostly fall at the three to five percent, these additional orders that replace the otherwise profitable dine-in orders are suddenly a much larger issue.
If you keep track of your restaurant’s numbers, such as COGS, labor cost, and overheads, you’ll quickly see that the increase in customers through online delivery services won’t add to your profits—it will likely diminish them, or wipe them away.
The Risk of Losing Control Over Customer Service
As with anything in business and life, there are perks and downsides of outsourcing pretty much anything.
When you outsource a certain task or a process, you free yourself and your resources. You can focus on something else and dedicate your time where it’s more valuable.
On the flipside, you also lose the majority or all of the control you had. The way this job now gets done is out of your hands.
Online delivery services are particularly in line with this. Restaurants often choose them after managing their delivery orders and drivers become overwhelming.
No one can blame them for thinking that placing that job on something else—in this case, an Uber Eats or Postmates app and system—will make the issue go away.
When you employ a third-party service to deliver the food to your customer, there’s nothing left for you to do—and that’s a bad thing because you have no say in:
- Delivery times
- Driver’s behavior and friendliness
- State of the food when delivered
You hire a service that handles this from the moment you hand the food over to them until it’s in customer’s hands, but it ends up creating more concern for you.
If all goes well, your customer will receive their food in time, while still warm, with everything as it should be, and happily consume it.
But the worst case scenario is a restaurant owner’s nightmare.
In fact, it’s exactly what an Australian restaurant, Burgers by Josh, went through.
According to a NewsMail report, the restaurant owner apologized to their customers for bad experiences they’ve endured with Uber Eats.
Most frequent negative experience was receiving cold food, which this restaurant owner blames on drivers that are untrained in food handling and customer service. Not to mention the fact they often stop during one delivery to pick up another one.
As a result, the restaurant got attacked through Google reviews. Obviously, Uber Eats couldn’t do much about it.
And for customers who were so unhappy they asked for a refund, they had to wait up to three days to hear back.
The fact that the restaurant has to compensate 50% of the refund even though it’s not their fault is the final straw.
Trusting a third-party service with your food delivery and customer service can be a blessing—until it becomes a battle.
The Inequality Between the Restaurant and Online Delivery Services
Then, there’s a problem that comes up in many business relationships where the success of the user (in this case, the restaurant) depends on the decisions of the platform (in this case, Uber Eats and its competitors).
Yes, these services make the lives of restaurant managers easier. Their unique selling proposition is bringing them an untapped audience of customers and relieving the job of managing deliveries.
But more often than not, the business decisions they make—the ones that impact you—will be driven by what’s best for them. Not you.
For example, the earlier mentioned 50% refund a restaurant has to compensate to Uber Eats wasn’t always the case.
Uber used to cover the cost of customer refunds, but then changed its policy that requires restaurant owners to pay a percentage in cases of missing items, incorrect items, and incorrect orders.
In other words, they can change their policies as they wish, which is defined by the clause in their contract that reads: “by using the Uber Services … you are bound by any future amendments and additions to this Agreement”.
One restaurant owner described this as Uber being the “judge, jury and executioner”. Restaurants are put in an unequal bargaining position, which can result in poor circumstances to grow and sustain themselves in the long run.
Take the Delivery Service and Experience Into Your Own Hands
By now it’s clear that the reason restaurants still go for online delivery services solutions are two-fold:
- They provide a ready-to-go meal delivery solution
- They have a sizeable audience you otherwise wouldn’t be able to reach
This problem, then, needs a two-fold solution.
Own your marketing
There are many examples of not owning your marketing and relying on someone else to drive clicks and/or footfall to you.
Reviews on Yelp, Facebook, and Google are a good example of it. While reviews are important, you don’t own them—these platforms do.
For example, if any of the platforms decide to close your listing, remove all the reviews (positive ones included), or simply rank you lower than your competitors, there is nothing you can do about it. It’s their decision to make.
Same happens if your competitor decides to dump dozens of negative reviews on your restaurant. Review policies are strict and it’s extremely difficult to get them removed so that your business and reputation don’t suffer.
Both examples prove that you can only control the assets you own.
It means it’s up to you to do the hard work to reach the right people, provide excellent service, and spark word-of-mouth referrals.
Some of the best places to start are social media, influencer marketing, and Facebook ads. Yes, you will still work with other people and platforms, but you can start small. Be smart about allocating your budget, and measure results of everything you do to optimize in the future.
Own your online ordering and delivery
Here’s the good news: you can take full control over the way your food gets ordered and delivered. You can also control the cost of it.
There’s an easy way: by using jumper.
In jumper, you can set up your own online ordering system which can enable your customers to order delivery (as well as takeaway or to dine in).
All of the orders are done through an automated bot checkout, without extra work on your part, and go straight into your jumper dashboard for you to manage, prepare, and deliver.
Oh… And it only costs 1.5% per sale. Not 20 or 35%.
Start by creating a jumper account. You will be taken through a basic setup and enter all the business profile information.
Then, you can set up your location and delivery settings.
These will include:
- Location details
- Opening hours for each day of the week
- Delivery radius
- Dining in option
- Advanced pick-up order options
- Collecting customer mobile numbers
- Average order preparation time
Your diners can order from a menu you can easily create and edit from your jumper dashboard, too.
You can create multiple menu categories, such as starters, mains, and drinks. The automated checkout process will ask your customer to choose from available options, see prices right away, and confirm quantities they want.
From here, your customers can use your restaurant link to order food from you wherever they are, from their smartphone, in a quick and effortless way.
All the marketing channels you’re using can now be the starting point to any order. From social media, emails, and influencers, your customers don’t have to jump through hoops to start ordering.
Online Ordering and Delivery Doesn’t Have to be an Expensive Hassle
Letting other companies handle your food delivery and customer service while taking a third of your profit isn’t the best choice you can make.
Many restaurant owners agree that their own deliveries are more profitable as they charged the same delivery fee from the customer, which covered the cost of delivery drivers, while receiving the full price of the food they sold.
In other words, there’s a better way than through hyped food ordering apps. And with a jumper account, you can easily handle them, keep your profit margin up, and make your customers happy.