Are 3rd Party Portals Too Expensive?
Are DoorDash, Grub, Uber, Skip too expensive? Do this…
Well it’s a stupid question really, of course they are, we know they are, but what can you do? At MENUU we encounter so many restaurants cursing the existence of aggregators and their high prices, but feel totally incapable of not using them due to their provision of drivers and bringing in “new” customers.
Your Digital Identity & Taking Ownership
Firstly, let’s address pricing. For most aggregators we know they charge 10-15% Take Out and 15-35% Delivery, depending on the supplier and your ability to negotiate or buying power. Either way, it's very expensive. But for many, they become totally reliant on these channels and lose their entire online identity.
It may seem like a small issue now, but year after year, with online gaining importance, to lose your digital identity and ability to attract your own customers to your own website will become a far greater problem, because it will only get worse and cost you more money and become even harder to fix or reverse.
Once a customer, whether new or regular, uses a certain platform, there is a very high chance they will never change from that platform. Buyers develop habits and it is tough to break them, so capture them and make sure your website is their habit, keeping them on your site if they found you through your site.
It is one thing to pay those fees if they are bringing you new customers, as it covers marketing, but too often I see buttons for these aggregators sitting front and center on restaurant’s own websites. Restaurant brands sending their hard earned customers and online visits to another website that is going to take 10-35% commission on the order? Why? It is so unnecessary!
If hiring your own drivers is out of the question due to the hassle, cost and issues that can bring, there is strong appeal to having that done for you. But there are options out there allowing you to use these delivery drivers without the high fees. Being the kind souls they are, many aggregators will allow you to sign up to their driver only API.
In the U.S and Canada examples include DoorDashDrive and PostMatesFleet. While in the UK last mile delivery providers like Stuart and Orkestro provide drivers for a similar fee. They allow systems like MENUU to integrate into their driver network, so when you accept a delivery order through MENUU, it dispatches the order to a nearby driver, the cost of which you can split with the customer or place entirely on them. Let’s do the maths on this.
Doing The Maths
Say you have an average order of $25. If you receive that order through an aggregator, the aggregator has charged the customer $4.95 for delivery, making the total $29.95. They are then taking 30% of your $25, around $8. So the customer is charged $30, with you receiving $17, before taxes. What you are getting from a customer willing to spend $30 is 55% of it. Weird right! Oh yeah, and you don’t even get the customer’s data!?!
Now let’s say the customer places that same order through MENUU, integrated on your website. They order $25 of food and based on their location, you know a PostMates / DoorDash / Stuart driver will cost $6.95. You set your own driver fee on MENUU, so you can pass $3.95 onto the customer bringing their total to $28.95, and you absorb $3, giving you $22. Take away MENUU’s 4%* which equals $1.15, and you, the restaurant. has paid $4.15 on $25, leaving you $20.95.
That’s $4 from that order back in the restaurant's pocket, a 15% saving AND you get the customer data AND you haven’t redirected that customer off-site. This allows you to retarget them and own your online relationship. We also could have made that $5.15 if you set the delivery charge the same as the aggregator. That would make it a 20% profit increase for you. That saves you hundreds if not thousands a month and never forget that customer data, that brings its own value further down the line.
Developing A Communication Strategy
Also MENUU’s promotions and loyalty tools can help you develop ways of attracting customers back to your site and rewarding that behaviour with discounts and loyalty rewards. If regular customers know their visits are being or can be recognised through your website, they will make the change from those aggregators. You can also place small marketing material into your packaging letting customers know if they order through your site they win rewards and get discounts.
With that new setup, as a restaurant you have chosen to take full ownership of your relationship with the customer, generate and utilise meaningful data, keep control over your margins and retain valuable profits by not paying needless commission charges. The customer wins by having a better customer experience, developing more loyalty with your brand and they save $1 on their order.
This boils down to the mantra, don’t work hard, work smart. The restaurant industry is hard enough without making life harder for yourself, and especially your customers.
Setup a call with MENUU and see if we can transform your business and its profits.
