How to workout more sales with an online food delivery portal like Grubhub, Seamless or Just Eat

Many restaurant owners ask themselves: should I implement an online ordering system for my website or should I just work with an online food delivery portal like Grubhub, Seamless or Just Eat? Well, there are advantages and disadvantages to consider, so the answer to this question might be black, white or... grey.

Advantages of working with an online food delivery portal

The biggest advantage that comes to one’s mind is that these portals have a huge number of users, which could become your potential clients. So it must be a very good channel for acquiring customers.

The big portals invest a lot in marketing, resources that a small restaurant could not even dream of. The more clients they get, the bigger the pool for the restaurant becomes. So at least in theory, you would need to focus only on food.

In terms of tools, these online food delivery websites offer to the restaurants a complete set of services: online menu, checkout, marketing promotions, etc.

Disadvantages of working with an online food delivery portal

On the other side:

While there are many users, there are also thousands and thousands of restaurants. Depending on your area, the competition could get quite high and you might struggle getting viewed by users.

Many times, increasing your sales through them translates into promotions / discounts or advertising (pay to get listed higher). Note these extra costs (that reduce your margin) and then add the commission that the portal takes per each order.

Quite often, these portals’ traction is comparred with global marketplaces from other industries like booking.com or airbnb.com. But actually, there is very little that such portal can do in order to bring you clients from the other side of the planet, even from a city nearby. There are mundane logistical limitations that simply cannot make this fly globally anywhere in the world: the food gets cold, the clients get anxious waiting, the traffic jam make delivery costs higher, etc. So what the portals mainly do is to resell to restaurants (in a pay-per-order model) the same nearby demand that can be reached anyway in those few miles radius that is traditionally covered by the restaurant effectively. Then the question is: can the restaurant do this local marketing and delivery more effectively directly or it is better to outsource this to someone else and “buy” the “daily order intake” from them in the pay-per-order model?

How should your restaurant work with GrubHub, Seamless or Just Eat?

Should you even consider the food delivery portals? Definitely. They could indeed be a nice source of new clients. But you need to make sure that:

  • You work with them with a clear goal of acquiring new customers and
  • You can do this in an affordable manner.

To make it clear: if you want to build your own client base, you need to have your own website and Facebook page with an online ordering system that you can control. That is not GrubHub, nor Seamless nor whatever other competitor of them. The customers that are visiting your property pages are yours. You can capitalize on your own client base more effectively as you don’t need to pay commissions each time they order!

Use the food delivery portals only to acquire new customers

Since the orders coming from your properties are free of commissions, you should aim to acquire new customers from the portal and turn them into loyal customers that order from your website or Facebook page.

How do you bring the new clients to your website? It depends on the clients:

Those that discovered you from the ordering website and love your food are the easiest to convert. First, they need to know that you have a website and that you take online orders from there. Make sure you slip an info flyer in their delivery bag or use a “no touch seal” (more on how to do this here). Second, customers usually choose the easiest path to order. If you are using our online ordering system, you can confidently advertise a better ordering experience and the real time confirmation of the orders. This becomes an incentive to switch from the delivery portal.

On the opposite pole you have those that picked you for the promotion. Those are the hardest to convert, as most likely they will search for another promotion (from your restaurant or another) when ordering the next time. Those will need some stronger incentives to follow you on your website (like a loyalty program). Put yourself into their shoes and offer them good reasons for becoming your loyal customers.

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Be aware of the “reverse” effect

Food portal consolidators only make money if more people come to their portal/app and order food from there. It’s in the fiber of their business model to poach your clients to go to them and then resell their orders back to you. So make sure you are not trading off more than you wanted to sign-up for.

If you already have a good customer base ordering from your website and start with a delivery portal to acquire new clients, pay attention NOT to migrate your customers from your own website to the portal. This is not something likely to happen naturally, as your clients already have the habit of visiting your website, but it’s good to keep an eye on how the orders volume change per sources. Once again, it’s important that you use a good ordering system, as customers tend to follow the easiest ordering path, with less friction.

However, with some portals you need to do more to make sure they are not draining you of your clients. As mentioned before, it’s their very business to take away your clients and many of them really go overboard. So you should also check that:

  1. None of your portal partners are extra-promoting their portal over your own restaurant brand name, with targeted Google AdWords campaigns. Here’s an example: http://prntscr.com/8ltrjb
  2. None of your portal partners are trying to over-SEO and redirect your prospects to their portal through “dummy” websites. They do this by using your own restaurant name or brand thus trying to confuse people that are searching for your establishment.

Examples of “dummy” websites looking “quite” similar:

http://prntscr.com/8ltokn http://prntscr.com/8ltp6o http://prntscr.com/8ltpjq

If you sport things like these over your restaurant name and website domain, the only thing we can recommend is to cut the collaboration with such portal. Or just let your clients go... Unfortunately there is nothing in between.

Make sure you afford the online food delivery portal

Do the math. Can you afford paying these commissions? Of course you can increase the prices, but this also comes with the cost.

In the model above, the extra costs you have with the online food delivery portals can be seen as an investment, just like you would invest in promoting on Facebook or advertising offline. However, you still need to ask yourself: are these new customers bringing enough extra value to cover for the initial investment?