Do you own your customer relationships?
When a customer orders a second or third time from a 3rd party platform, chances are they love your food more than the platform they are ordering from.
Customers are your business. They’re hard to get and hard to keep. Customers that feel valued keep coming back, spending more, and making referrals. Given their importance on your growth and success, how you manage these relationships will have a direct correlation with your revenue.
Technology can give you a deeper understanding of who your customers are and how they engage with your business. The technology available to your customers gives them simplistic ways to get the information and services they are searching for. The relevancy and personalization of their online experiences are things they have come to expect. For a restaurant investing in technology that collects, and utilizes data can enhance the customer experience and build stronger customer relationships.
Before investing in any software or platforms, it’s a good idea to create an online strategy. Consider the type of restaurant are you, who are targeting, the services you offer and your goals. Without a detailed plan, your tech stack can hurt rather than help as you build your business. The time invested in creating an online strategy and how you build your software stack can make the difference between growing revenue or building an unsustainable business.
There is no shortage of technology created to help build, manage and grow a restaurant more efficiently. Point of sale, inventory management, and customer management tools are the primary ones. Customer management tools include online ordering, mobile ordering, hot spot ordering, reservations/table management, wait-line management, and marketing tools including loyalty. These tools collect data from every visit, order, reservation, and review written. This data is a business asset worth more than revenue as it can be used to continuously create more revenue.
To optimize the potential of the data it needs to be shared within the software stack you create.
Your POS collects the bulk of your customer data. All of the sales should flow through the POS. It is the central hub the 3rd party platforms you decide to implement should be integrated with. When you find a POS that suits your needs, look at the business building add ons they offer. If they don’t suit your needs look at the 3rd party partners they have an integration with.
Everything should be connected and able to share the data where it can promote your growth. Too often a decision is made to add a platform or software to the mix without considering the compatibility to the stack or the online strategy.
POS integrated customer management software provides the services 3rd party platforms provide but you will own your customer relationships. Having one consolidated platform will be less expensive and give you more control of your own customer data. A platform including a combination of tools working together will organize all your data in one place. The data is the engine behind managing existing customer relationships and a primary driver of revenue.
I’ve worked with many restaurants that have done this correctly and it created a “machine” to generate customer visits. They could fill their dining room on a slow night by sending a targeted message in the afternoon
Sending a targeted message out on a rainy successfully boosts delivery sales. A targeted incentive sent at 3:00 brings customers and friends to Happy Hour. The right message, to the right person, at the right time has a huge impact on marketing results. Owning the tools and data, the cost is minimal to market to existing customers. Own your customer relationships and build on them. There is no marketing more targeted and effective.
Mobile and online ordering for take-out or delivery is the top area of same-store growth.
Partnering with third-party platforms such as Grubhub seems like a no-brainer but can be a double-edged sword. The best way to determine if an online ordering and delivery service is right for your restaurant is to understand how these types of deals are structured and how the actual ordering and delivery process works.
If you work with a third party platform it should be integrated into your POS. Without integration, you will have countless tablets and printers cluttering your restaurant. Your staff is manually entering orders and this can lead to missed orders, errors, and angry customers. A good customer management platform will provide this integration.
The High Cost
Third-party ordering and reservation services are expensive. If you’re paying 20% including delivery, which is conservative, the first few orders are a welcome boost of incremental revenue.
I have met with dozens of restaurants that have created a monster in their business. It starts out promising with a few orders a day supplementing their revenue. As online ordering grows, they’re business expands but their profits are flat.
If you average 50 online orders a day at an average sale of $20, you’re generating $30,000 in revenue monthly and paying $6,000 to process those orders. Hopefully, they are orders from new customers and you’re not simply paying to process orders for your own customers. Either way, the 3rd party is not sharing the customer data from these transactions. They will allow you to access it if you pay for their marketing. Now you’re paying them even more. If you stop paying for their marketing or lower the percentage you’re willing to pay, the data can be leveraged to incentivize one of your customers to order from a competitive restaurant paying the platform a higher percentage.
It’s worth noting that 70% of consumers surveyed say they’d rather order direct, preferring that their money goes straight to the restaurant and not a third party. Only 15% said they didn’t really care how much money the restaurant received from their order. This makes sense as most people who like certain local restaurants want to see them do well and stay around.
Use the 3rd party platforms to direct new customers to your business. (Think Groupon) Once a customer has ordered from you, if they come back, they are your customers. They come back because they like your food, not because they love the ordering platform. This is where owning and controlling your customer data is a critical part of your online strategy. With the right tools in place, you can begin to nurture these customers to order direct for their next order.
Create a strategy to engage your new customer beyond that first order. Simply knowing what they ordered and when they ordered it gives you enough data to start engaging them. You could offer an incentive for the second-order equivalent to the platform fee.
Make it Easy
Make it easy for customers to deal with you directly. Don’t link out to 3rd parties from your own site. Even if you don’t have a delivery team you can arrange an integrated partner to do delivery. It’s not expensive to create your own online ordering that will be extended to your social media pages and render correctly on a mobile device. Be where your customers are and make the path to do business with you simplistic.
Your restaurant can be listed on, and process orders through, a 3rd party online ordering platform without paying for delivery. In fact, the ordering is often an additional charge. Some restaurants pass this fee to customers. Some create a separate”online” menu with pricing that is slightly higher to cover all or part of the delivery cost. This also, of course, means restaurants with their own delivery people do not have to pay for the add on delivery services. Having a delivery staff is expensive.
Using your own online ordering software leads to the question of how to handle the delivery. There are platforms that, integrated to your POS can ping a partner delivery service when the order is submitted. This eliminates the need to hire a delivery staff when processing your own orders. Through the integration, your customer will be able to see when the order has been picked up and where they are on a map en route to deliver their food. Again, integrated customer service platforms can provide a great customer experience that will bring them back to order from you direct every time.
Loyalty can be another powerful marketing tool for a restaurant to own your customer relationships. Often what is offered by the POS is usually not robust and missing the communication piece. The data is only valuable if used to personalize the customer experience and motivate them to do more business with you. To do this, the communication piece is critical. Integrated to the POS access detailed order history and preferences, the data is the fuel that makes the loyalty program effective. The data enables you to send relevant, meaningful text and email messages, offers, and incentives through the loyalty program.
Make it simple. Don’t force customers to download an app to join, earn and redeem rewards. The more customers you can get to join your program, the more of an impact it can make on your revenue. Loyalty creates its own set of data points that help to own your customer relationships.
Mobile ordering growing fast. Depending on the size of your organization it doesn’t always make sense to invest in a mobile app. Your online ordering software will work within your mobile-ready web site. The phone number provided when ordering enables you to ask for permission to send text offers or a welcome gift inviting them to join your loyalty program.
Use the engagement platform to automate requests for feedback following orders or visits. Customer reviews can provide feedback you need to hear to continue to improve and grow. Thank your customers for providing the information. If possible, leave your responses in public posts within the review. The number of reviews your business has on credible 3rd party sites can significantly help to appear for relevant local Google searches. Respond to all customer reviews and communications, both negative and positive.
As with any business service, the more hands-on you are as a business owner, the more you will get out of owning your customer relationships. Plan out your customer strategy before investing in new or adding to your existing software stack. Invest in solutions that are integrated to share data where it can be used to create more revenue.
Use 3rd party platforms to connect with new customers. Build a nurturing conversion strategy engaging new customers with relevant, incentivizing messages. Make it easy for customers to place orders and reservations direct. Create customer profiles and automation to continue to engage your customers after they leave the dining room.