4 Steps to Choosing the Best Food Delivery Service for Your Restaurant
2020 has put a spotlight on delivery. Dining room closures nationwide due to the COVID-19 pandemic has made delivery a critical part of business operations. Many restaurateurs have been left to evaluate the best food delivery service for their restaurant.
In fact, prior to the COVID-19 pandemic, 45 percent of restaurants were working with a third-party delivery service. Now, that percentage has increased to 54 percent, according to Sage Intacct. Sixty-eight percent said that delivery increased their revenue.
But not all food delivery services are created equal. With many on-demand food delivery apps charging paralyzing commissions of up to 40 percent, it’s essential to the success of your restaurant that you choose the right partner. We share four steps for choosing the best food delivery service for your business.
Step 1: Go commission-free.
The best food delivery service is the one that is most profitable for your restaurant. If you partner with third-party food delivery apps, you’re likely paying a commission on every order. Despite this common practice, it’s bad business for restaurants. How much you pay in commissions – which can be up to 40 percent of every order – is based on how large the ticket is. The higher your sales, the more you fork over to third-party delivery apps. As your delivery business becomes more successful, you end up giving more of your profits away.
That’s why it’s critical to work with a partner that won’t charge you commissions. Instead, pick a partner with a more sustainable cost structure, like a flat rate or distance-based pricing. A delivery fee should account for how far the food is traveling, instead of how much food your customers are buying.
Step 2: Look for a service that lets you split delivery costs with customers.
When evaluating the best food delivery service for your restaurant, choose one that offers you flexibility in setting delivery fees for both you and your guests. When you switch to commission-free delivery, you have an opportunity to both simplify and lower prices for both your customers and your restaurant.
On top of the 30 to 40 percent they collect from restaurants, popular food delivery apps will also charge your diners exorbitant delivery fees. What’s more, Uber Eats and Grubhub both tack on “small order fees” when tickets are below a given threshold. Postmates and Uber Eats also dynamically increase pricing when the supply of drivers is low or delivery demand is high.
According to a survey by US Foods, the average delivery customer is willing to pay $8.50 for delivery fees and tip. A distance-based rate and additional flexibility helps ensure that your delivery business remains profitable and affordable for your customers. For example, ChowNow restaurant partners are presented with one distanced-based delivery fee that they can choose to pay or split with their guests. The ideal provider will also let you easily control the size of your delivery zones, which makes it simple to account for the costs.
Get the Guide: The 4-Step Checklist for Profitable Restaurant Delivery
Step 3: Keep control of your brand and customer data.
The best food delivery service is also one that can help you make better business decisions. Your restaurant’s brand helps you cultivate long lasting relationships with your customers. When you rely on delivery marketplaces, customers interact with the app’s branding, instead of yours, while ordering from your restaurant. In fact, certain apps don’t even show your logo when they list your restaurant right next to dozens of competitors.
This approach isn’t limited to branding—it extends to the data that marketplaces collect when your customers order. Commissions-based marketplaces will use your customers’ email addresses to promote other restaurants to your hard-earned clientele. Worse, they won’t share your customer data with you, so that you can market to your own customers. The right delivery partner will build your restaurant your own branded online ordering, which puts your restaurant in the spotlight and gives you ownership of your customer data.
Step 4: Ensure a quality guest experience.
Naturally, as a hospitality expert, you want your guests to have a fantastic experience. When your food travels off-premise, it can be harder to ensure customer satisfaction. With third-party delivery marketplaces, your customer experience is at the whim of delivery driver quality.
When choosing the best food delivery partner, enlist one that provides top quality drivers. Having expert couriers—in addition to lowering fees, ensuring food quality, and staying in communication—will keep your guests smiling, no matter where they are.
With the right partner, delivery can be a profitable addition to your takeout business. Especially now, it can help you make up some revenue you may have lost from closing your dining room or from serving at a lower capacity this year. Now more than ever, if you’re going to add delivery, it is imperative that it uplifts your business – not cut into your profits.
Looking for a delivery partner? Check out commission-free delivery with ChowNow.