Should I Use a Third-Party Delivery Service?

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on Feb 13, 2019 4:41:21 PM
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Third-party delivery services such as UberEats, Eat24, and Doordash, serve an important role in the restaurant industry. But, they are not for every restaurant. If you’re considering adding one of these third-party delivery services, or another one, here are a few things to consider before signing up.

Brand

Your brand is your statement to your customers about what they can expect from you. Everything from the kind of food coming out of the kitchen to the service provided by your front-of-house-staff is wrapped up in your brand.

According to the 2017 Restaurant Success report, diners are more likely to prioritize delicious food over a valuable experience. This means that they want the best food in its best condition every time. How does delivery help you achieve this? In short, it does not. You will be relying on someone who is not an employee of your restaurant to deliver your product to your customers. One bad experience may result in a lost customer, and a black mark on a brand that you’ve worked so hard to build.

Outside of bad experiences, how will you decide which customers you can and cannot serve? Setting too small of a delivery radius could make you look un-inclusive. Setting one that is too large can make you look cheap.

Customer Service

Restaurants who use third-party delivery services ultimately cede control of their customer service to the delivery company. The delivery driver, not an employee of the restaurant, is in control of the experience the customer has with your business.

A 2016 report from Mintel found that 12 percent of restaurant-goers have used a third-party delivery service in the past. But, 30 percent would rather order from the restaurant itself. For restaurant owners, this means adding a to-go order option on your website is more likely to increase your sales than adding a third-party delivery service.

Allowing your customers to order directly from you puts you back in control of your customer service. Plain and simple.

Does the delivery service make you money?

This may seem like a silly question. Of course it makes more money. More orders equals more money, you probably said to yourself. But consider this: the value of each check will depend greatly on whether you are located in a densely populated urban area or not. Once you deduct the commission for the third-party service, typically 15 to 30 percent, and other costs related to the new service, then you will see whether or not the service is worth the investment.

Some restaurants offset the commission charge by adding a delivery fee. This will ultimately increase the price per ticket, but it may also out-price some of your customers. If you are located in a college town, keeping your ticket prices to a minimum is paramount. Adding $3.99 to cover the cost of delivery takes a $11.99 order to $15.99, and could cause customers to find food elsewhere.

If the third-party service is not delivering a return on investment, it’s best to develop other means of getting your product to your customers.

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Topics: Capital, Technology

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