Third-party marketplaces have become a seemingly inevitable part of the restaurant – landscape whether you like them, hate them, or think you can’t run your business without them. Currently, big delivery platforms seem to be in the spotlight more than ever as both businesses and consumers question how necessary (and how expensive) their role should be in connecting restaurants to diners.
Many restaurants are looking to reduce or remove their reliance on third-party delivery marketplaces, but are unsure about how to smoothly transition their customers away from the highly-marketed marketplace, while still maintaining order volume and takeout profits on their own. However, research from Preoday shows that 70% of consumers WANT to order directly from restaurants, not these third-party giants.
By implementing the same marketing tools as marketplaces, you can regain control over your brand and your relationship with your customers while saving money along the way.
HELP YOUR DINERS, SO THAT THEY CAN HELP YOU
Third-party marketplaces are very expensive, charging restaurants as much as 40% on every order. But diners don't see or feel this high cost to the restaurants. Diners often believe there is no additional cost to the restaurant or themselves. Marketplaces keep diners engaged with a constant barrage of promos and discounts sent to diners’ inboxes and phones. Their marketing engine is designed to keep diners reliant on their service, driving the diner habits.
Turn the tables on the marketplaces by using the same discounting tactic to tempt customers into a more restaurant-friendly way of ordering. A financial incentive like “$5 off when you order direct!” is a great motivator for diners to create a new account on your in-house ordering platform or download your own branded app. In turn, you’ll be gaining direct access to that customer for just a one-time cost.
Customers don’t realize that by the time they check out, a service fee, peak hours fee, small cart fee, and higher menu prices mean that they may not be saving as much money as they think.
BE OPEN ABOUT THE ORDERING METHOD CHANGE, AND THE REASON BEHIND IT
A discount is very effective at grabbing diners’ attention immediately – but raising awareness about why you’re asking them to order directly will encourage a long-term behavior change.
More customers care about supporting you and other small businesses than you might think, but most have likely never considered how their scrolling and one-click delivery puts their favorite restaurants in a tough position.
When restaurants in North Carolina started speaking up about the hidden costs of delivery apps, the community took notice. Combined with an enticing first-time promo, they converted their customers from marketplace apps to direct ordering by creating a feel-good reason to change consumer habits.
Thanks to restaurateurs who have educated both their fellow operators and their patrons about these hidden costs, we are seeing new local policies capping commissions and increasing transparency on the true fees incurred by restaurants on these marketplaces.
SPREAD THE WORD TO EVERYWHERE YOUR DINERS ARE
Your promotional offers and transparency story can only be as impactful as the number of people that are exposed to it. So it’s important to have mediums and platforms to share your message with your patrons. This may be more difficult if third-party marketplaces have insulated you from your customer emails or phone numbers. But luckily, social media, word of mouth and even old-fashioned print marketing can be extremely effective outreach methods.
The first step is to edit your restaurant’s recorded phone greeting and/or voicemail message to tell callers how to order from your website or branded app – don’t mention third-party marketplaces, even if you may still be appearing on them. It’s important that you don’t advertise third parties to your customers, because it defeats the purpose.
Next, take that same intention to your in-store signage and messaging. Do you have a box of Postmates cards at the host stand? A “Find us on UberEats” sign up in the window? Replace any third-party advertisement with collateral that showcases your direct ordering platform instead.
Thirdly, turn social media into your direct-ordering soapbox. This creative space is your mic to post promos, drop links, or share your updates in photos, captions and stories. Providing this news digitally is extra important if you’re about to turn down or turn off your third-party ordering – customers will seek out explanations and alternatives if their customary method of ordering has changed. You can even leverage your audience to share your message with various contests or incentives.
Finally – if you’re already using delivery apps to get your diners their food, why not use those orders to send a message as well? For every takeout bag or box that goes out the door, include a flyer that tells them how and why to order direct next time. This directly targets the customers that you want to convert, the diners that are already ordering from you BUT – from a third party. Remember, 70% of consumers WANT to order direct.
GAIN CONTROL – AND STAY IN CONTROL
You’ve passed out your flyers, updated your customers, and gotten your regulars to switch from third-party apps to your own ordering. The hardest part of changing habits and transitioning platforms should be behind you.
For all future customers, make it as easy as possible for them to connect with your direct ordering first. Scrub your website to remove any links to third parties, and emphasize your direct ordering with an easy button or pop-up.
When you search for your business online, make sure that any affiliated pages like Google Business, Yelp, Tripadvisor or reservation platforms have your current website and contact listed. Although third-party websites can still take up advertising space on search engines, Google My Business profiles now allow an option for restaurants to select and highlight which ordering vendor or link is their preferred method for customers to use. Then continue engaging with your customers – leveraging email marketing, social media, and word of mouth to propel growth.
If you’ll still be using marketplace apps as part of your new-diner-acquisition strategy, remember that conversion marketing will be an ongoing project. It helps to always have a stack of your order direct print collateral on hand, and to make sure that your staff is comfortable talking up your own website or app with every customer – on the phone or in person. Audit your commission costs periodically to stay abreast of any fluctuations and adjust your strategy accordingly.
MOVE FORWARD TO A MORE PROFITABLE FUTURE
There are certainly benefits to being on a marketplace. They can give you immediate reach to a larger audience, and give a helpful boost of publicity to a business that’s brand-new – or at least, new to the online ordering scene. However, the high risks associated with marketplaces have become more apparent as restaurants’ profitability plummets, due to the 30%+ commission rates forcing them to weigh the advertised customer acquisition with the high cost. The space oftentimes is overcrowded, and only increases specific restaurant exposure when they increase the payment. When marketplaces are the gatekeepers between you and your diners, your prices, service and product are in their control.
As the impact of COVID-19 shutdowns and diner behavior come into focus, this becomes an even larger question for restaurants desperately seeking profits and order volume to remain open. Converting diners to order direct could be key to survival. Moreover, as restaurants explore new revenue streams in response to COVID-19, ghost kitchens are becoming a popular and viable option allowing, restaurants to use their kitchen space and add additional revenue with little overhead. By developing a digital footprint, leveraging social media and marketplaces as part of the initial customer acquisition, restaurateurs can use the above strategies to convert diners to order direct – and ensure that these ghost kitchen revenues are profitable with commission-free direct ordering, and further increase their staying power.
By balancing these pros and cons strategically, and knowing how to convert your third-party customers to supporting your brand directly, you can make these marketplaces work for your business – and not the other way around.
About ChowNow: ChowNow powers an online food ordering system as part of CHECK® Business Tools. ChowNow allows customers to place orders directly from a restaurant's website, Facebook page, Instagram profile and custom-built mobile apps – commission-free. Learn more about ChowNow by visiting online ordering in CHECK Business Tools. ChowNow is also partnering with US Foods as part of the Ghost Kitchens program, with exclusive offers for US Foods and expert support to make online ordering easy for a new Ghost Kitchen concept.
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