5 Ways to Win Back Your Restaurant’s Customers from Grubhub
This post was last updated in March 2022.
Third-party delivery marketplaces like Uber Eats and Grubhub are eroding restaurants’ profits and customer relationships, and in some cities, are even getting sued for predatory business practices. These shady tactics include take hefty commissions from each and every order a restaurant receives through their platforms, often putting independent businesses at a loss. Apps like Grubhub fail to provide restaurants with valuable customer data, prohibiting restaurants from marketing to their customers in a smart and targeted manner. You may be asking yourself, ‘Why would a restaurant owner sign up for this?’ Here at ChowNow, we ask ourselves the same question.
We help our restaurant clients see the value behind having a branded online ordering solution. Read on to learn about the benefits of converting third-party delivery app customers to your restaurant’s own online ordering channels — and some simple ways to convert them in practice.
How is Grubhub harming your restaurant?
It hurts your profit margins.
Let’s face it. It’s time to stop paying over and over again for your own customers. With Grubhub, you could be paying 15-30% commission on each and every order you receive. If the phone company charged you 30% for every phone order you processed, you would have stopped taking orders over the phone a long time ago. Not only are these large commissions cutting into your bottom line, but they are inhibiting you from using your money wisely. This financial freedom allows you to create room for a marketing budget that focuses on your brand, not Grubhub’s brand.
Get the full story about how third-party delivery apps are deceiving independent restaurants, stealing their customers, and eroding their profits by reading our new ebook: 4 Myths About Third-Party Restaurant Delivery—Busted.
It weakens your customer relationships.
While Grubhub may bring in new customers and a high order volume, you aren’t receiving any valuable customer data from them. Instead, you’re forced to rent your customers, while Grubhub owns all of the information surrounding your customer database. This makes it very difficult for you to tailor your promotions and directly market to or communicate with your customers. With a branded ordering solution, you will have the ability to see and own all of your customer data, including email addresses and ordering behavior. Having this valuable data can help you increase repeat orders and build loyalty with your customers.
It markets your competitors to your customers.
Let’s say you own an Italian restaurant and you’re known for your famous calzones. About a month ago, you had a new customer stop in to the restaurant to try one and they loved it. You pass them a promotional card that you received from Grubhub to market your restaurant. Fast forward to present day. That same customer may not remember your restaurant name, but they remember your famous calzones and seeing “Grubhub” at the top of the card you handed them. They search “calzones” in Grubhub’s search bar. Can you guess how many restaurants come up?
Not only will they be inundated with marketing for other restaurants that have paid to be at the top of the search results, but your customer is now a loyal Grubhub customer. Can you imagine if they were handed a promotional card with your restaurant’s name at the top? This is yet another reason why having online ordering that is branded to your restaurant is so important.
How to Convert Grubhub Customers in 5 Easy Steps:
1. Offer promotions on your website only.
To create an incentive for your customers to order directly from you, create a promotion that only applies on your website. If you want to get even more targeted with this promotion, create a specific promo code (e.g., Get 20% off your next online order with code NOGRUBHUB) to apply to their order. This will push customers to order less from the third party marketplace and more from your website. Offering a website-only promotion will not only drive customers directly to your branded ordering, but it will help to create a habitual ordering pattern, increase your order volume, and grow your profits .
2. Increase brand visibility.
One thing Grubhub, Uber Eats, and others do well is promote themselves. Consider how they promote their platform. They send out email campaigns, promotional cards, signage, etc. Now it’s time to spread the word about your brand in the same fashion, without losing your customer base to competitors. One easy way to convert your customers is by getting branded promotional cards for your restaurant and taping them to your takeout containers. Avoid just dropping them in the takeout bags or stapling them to the outside because you’ll run the risk of the Grubhub staff member tossing it out.
Do you have a hold message or voicemail for your phone line? Record a new one stating your website-only special and your website URL. Print your special on all of your takeout menus. Add branded table tents to every table. Think about all of the places your customers can see and put something there that mentions your branded online ordering. You’ll be sure to convert those customers in no time.
Download our case study to see how a restaurant owner converted his customers from Grubhub and Uber Eats and saved over $100,000 in third-party marketplace fees working with ChowNow.
3. Remove Grubhub from your restaurant’s website.
If you have multiple online ordering buttons listed on your website, you will most likely confuse your customers. How will they know which option to pick? This is a major online ordering mistake.
If you’d like to prevent customers from ordering on Grubhub, the first step is to make sure their button is not visible on your website. If a customer has a choice between “Order on Grubhub” and “Order Online,” they will be more inclined to choose Grubhub because they recognize the name. Instead of running this risk, don’t give them an option!
4. Be transparent about why Grubhub is bad for restaurants like yours.
Your loyal customers deserve to know why you don’t want them to order from Grubhub. Be honest and open with them about the commissions they take. Customers care more than one might think and will always appreciate your honesty. Establish how they can help your business instead of hurt your business, by ordering directly from your branded ordering channels.
Share some reading material with your customers to help the cause. Here are some suggestions:
- Soggy Fries vs. Sagging Profits: Restaurants Face Delivery Dilemma (The Wall Street Journal)
- Why Uber Eats and Grubhub Partnerships Are Risky for Restaurants (CNN)
- Ex-Food Network Star Says Delivery Apps Killing Restaurants (Fox Business)
- 4 Myths About Third-Party Restaurant Delivery—Busted (ChowNow)
5. Get new customers through a restaurant-friendly marketplace.
If you’re still interested in acquiring new customers through an online ordering marketplace, make sure to sign up with one with restaurant-friendly pricing. Believe it or not, it is possible to sign up for a service that doesn’t charge you again and again for orders processed through their app.
With a ChowNow Direct subscription, you can not only take unlimited, commission-free orders through your website and mobile, but you also have the option to get listed on the fair-for-all ChowNow Marketplace. Our commission-free marketplace is good for you and good for your diners, allowing you to keep 100% of your profits while also helping your diners skip any hidden fees.
Even better, we equip you with the tools to convert newly acquired customers to your own ordering channels. ChowNow provides your restaurant with a Dashboard complete with customer email addresses and ordering behavior, so you can communicate with your customers directly. New customers and free repeat business? That sounds like a win-win.
Want more tips for converting your customers to your branded ordering system? If you’re a ChowNow client, reach out anytime and my team and I are here to chat! If you’re not taking online orders through ChowNow yet, get started with a free demo today!