Should Restaurants Partner With Food Delivery Apps Like Doordash & Postmates?

2020-05-11

Let’s face it, it’s difficult running a profitable restaurant. It can be especially challenging to offer delivery which can account for a huge portion of a restaurant’s total revenue these days and that’s only expected to continue.

If this was the case before the pandemic, you can only expect the popularity of food delivery among consumers to accelerate even faster now due to the Covid-19.

To meet this demand for delivery many restaurants have handed over their ‘delivery reigns’ to 3rd party apps like Doordash, Postmates and Grubhub. The problem with this is that these middle-men increase cost to the customer by up to 91%. It can also cut into the restaurant’s profit margins depending on the delivery service.

Another problem with these types of 3rd party delivery apps that many restaurants don’t consider is that with each order that goes through that app, you’re helping them build a customer email list whereas you could be building one for yourself.

Many restaurants don’t engage in email marketing for one reason or another. It’s not as flashy as social media perhaps, but your average email open rates are over 20% whereas with Facebook you’re lucky to reach 6% of your audience with each post.

I don’t think I have to tell you how important it is for a restaurant or any business to be able to stay in touch with their customers. Existing customers are 7x more likely to purchase from you than someone who has never bought from you. It’s absolutely crucial to nurture and build on that relationship and email is the perfect channel to achieve this.

So instead of using 3rd party delivery apps, I recommend restaurants set up online ordering and payments on their website and funnel all orders to that system. That’s right, no more in-person orders or orders over the phone. Just one way for your customer to order, on your website.

This might seem extreme but it will drastically simplify front of house operations and now that consumers are getting used to ordering online for takeout due to the pandemic, it’s a perfect time to make the switch.

With your front of house staff no longer having to take orders and payments they are now able to do deliveries maybe starting with a very limited range until your restaurant gets a handle on it.

This will allow you to cut out the middle-man, increase profit margins, lower costs for your customer and allow you to build a customer email list that will help stay in touch with your customers, build a relationship and drive more sales.

Even after restaurants are able to reopen their dining rooms, they can continue to take payments only online and have employees simply run food to their table.