Top 10 ways to boost restaurant profits with online ordering

I know that online ordering can be very profitable. At Canter’s Deli in Los Angeles, we’ve spent thousands of hours researching and testing new ways to do it right. As a result, over the past three years online ordering has become over 30% of our business!

But figuring out online ordering can expensive and time consuming. Today there are over 180 online ordering companies! How can restaurateurs deliver great food and service and figure out how to work with all these new services?

That’s why I’ve written down everything we've learned at Canter’s Deli and working with hundreds of popular restaurant brands across the country. I hope these tips help you to be more successful and avoid mistakes!

Some of the things you'll learn...

• How to choose online ordering services
• How to negotiate rates
• How to manage online orders
• How to control costs
• How to build great menus
• How to package correctly
• How to win more customers
• How to avoid costly delivery mistakes

Here’s my personal email address. Please reach out. I’m happy to answer any questions you have about online ordering: [email protected]

How to choose online ordering services

TIP #1: Learn from others and do your own math

Over the past few years nearly 200 online ordering services have launched across the globe and they're each a bit different. They charge different fees to restaurants. Some offer delivery services; others don’t. Some require special technology and processes be followed. The key to choosing the right ordering services is doing your homework, talking to other restaurant owners and operators about their experiences, and understanding the impact that each different online ordering services may have on your top and bottom lines. How will changes in processes and technology required by a particular service impact your restaurant’s operational efficiency and expenses? How will fees charged by ordering services impact your unit economics and profitability? Once you've narrowed the list of online ordering services available in your area, order them according to reach and target audience; then talk to other restauranteurs to get their input about the quality of service and value of each service. With this information in hand, obtain approximate rate information for each service -- from the service directly or other restaurateurs. Use all of this information to rank the services in priority order.

TIP #2: Think big but start small!

Once you’ve finished your homework it’s important to consider using multiple online ordering services. Some services excel in specific geographies or locations. Others specialize in niches like catering and special dietary concerns. Some will be willing to negotiate favorable rates. Some online ordering services may be willing to offer valuable promotional services and perks. The largest services may have the biggest reach to potential customers but you may be competing more for access to those customers. The bottom line is that layering multiple online ordering services is almost always the best strategy. It allows you to extend your visibility and reach to potential new customers; it gives you more leverage to negotiate the best deals with services; and it hedges your risk should one or more services not work out. Even if an online ordering company is only sending one order a week to your restaurant, that is one order you would not have received without it. At the end of the year, that one order a week can add up to a couple thousand dollars in additional revenue per year.

Also, don’t forget that online ordering services invest money to reach new potential customers for you and the potential lifetime value of those new customers may be tremendous -- so you need to understand how each service will market and promote your restaurant. Deciding which services to use requires research and some negotiation and you will learn through trial and error but it is important to expand your horizons.

However, particularly if you're new to online ordering, you want to start with one or two service in order to establish processes that work for your restaurant. "Nail it before you scale it" is the right approach.

How to negotiate rates

TIP #3: Try to negotiate everything

Most things in life are negotiable, but not everything. It’s the same when it comes to online ordering. You may be able to negotiate things like the rates you will pay online ordering services and special perks and promotional opportunities. You can sometimes negotiate which new technologies and processes you are required to use. Different services have different things they’re willing to negotiate and with a little effort and conversation you will be able to learn what is possible. Another advantage of using multiple online ordering services is leverage in these negotiations. Also, when you’re using multiple services it makes it easier to walk away from a deal knowing that all of your eggs aren't in one basket.

Things to negotiate:

• Commission fees (how much you pay each service for orders)
• Promotional opportunities (web marketing)
• Activation/Onboarding Fees Peripheral rental/data costs

TIP #4: Use these negotiating techniques

1. You catch more flies with honey than vinegar (so try to build a genuine and friendly relationship based on courtesy and trust with the online ordering salesperson), 2. Don’t be afraid to ask for a bit more than what you need (that way after negotiating you may end up closer to what you actually wanted all along), 3. Don’t get emotional or upset (remember it’s business and if an online ordering service refuses your initial request it may just require more creativity or time, so don’t spoil the relationship), 4. Do your research (before you negotiate, know what commission rates other restaurants are paying services and know how they negotiated terms and what their experience with each ordering service have been).

How to manage online orders

TIP #5: Prepare to handle multiple services

If you sign up with one online ordering services they will probably give you a dedicated tablet computer to use for their service. If you sign up with 10 online ordering services you may have up to 10 tablet computers. That’s a lot of technology that your employees will need to manage. Make sure you have a way of keeping all those devices secure, available, and charged. Also make sure that your employees are properly trained to use each device. The key to handling multiple online ordering services is to document detailed standard operating procedures for each online ordering service in plain language. Use that documentation to train all employees and be sure this documentation is available (printed and laminated) and visible in the same location as your tablet computers. Create a simple report for yourself that includes the following information: number of orders placed by each online ordering services each day; total dollar value of orders placed by each service; average ticket order for each service; time of day of orders placed; number of errors, missed orders, or customer complaints for each service; and percentage fees paid to each ordering service. You may not be able to easily obtain all of this information automatically for each online ordering service but gradually over time you should be able to obtain much of it. You will be able to use this information to make better decisions about which services to keep, which to discontinue, and how to improve the performance of each one.

How to control costs

TIP #6: Start slow and adapt as you go

Restaurateurs are often worried about running out of food or not keeping up with online orders, so they choose not to sign up for any, or stick to only a few services. What they don’t realize is that the way restaurants are getting discovered is changing, and lack of a strong online presence is a greater threat than most anything else. Start with a number of online ordering services you are comfortable with, keep track of your logistics, and modify as needed. Once you are comfortable, consider which other services could bring further value to your restaurant, and add another. Soon you will have optimized your processes, grown brand awareness, and increase online and in-store sales.

How to build great menus

TIP #7: Remember the Three P’s

Your goal is to build an online ordering menu that drives profit and delights customers. The three main factors to consider when preparing and revising your online ordering menu are: popularity, profitability and packaging. Initially you can assess popularity or demand based on in-store sales. Once online, review sales monthly to understand which items are most popular and consider ways to leverage this popularity. Perhaps you can offer different versions of the popular items or volume-based pricing for popular items. Similarly you should periodically analyze the profitability of your most popular online orders. Are profit margins sufficient for these items? Should you adjust pricing? Can you produce these items at a lower cost? Finally, adequate packaging is essential to delight online ordering customers. Are your items arriving intact? At the right temperature and quality? Is the packaging secure? Is the packaging safe? Is the packaging appropriate for the items being delivered? Your success with online ordering will depend on your ability to master these Three P’s. Failure to do so generates dissatisfied customers, online complaints and damages your restaurant’s reputation.

How to package correctly

TIP #8: Learn to do it right

Some items travels well, some don’t. Before considering packaging, it is important to understand that your entire menu probably won't work online. Menu engineering is a vital aspect to online customer satisfaction. Once your menu has been tailored to exclude items that won’t hold up in a car for 30-60 minutes, it is important to run tests on the food on the online ordering menu. I have actually ordered every item from my restaurant online to see how it holds up. This process helped me to realize that I needed to redesign packaging for items like french fries. My personal recommendation is to use a resource like IFS to consult with for better packaging solutions.

How to win more customers

TIP #9: Promote your online ordering program

Signing up for multiple online ordering services is just the start. To succeed at online ordering you must partner with online ordering services to promote your restaurant through direct marketing and special offers -- both online and offline. Depending on the popularity of your restaurant you may be able to leverage free or discounted promotional services offered by the online ordering services. However you should also be prepared to invest and promote your restaurant and most popular menu items on a saturation basis via direct mail and via digital advertising. One-time saturation mailing is rarely effective. Once you have optimized your menu you need to experiment with small batch saturation mailings and location-based digital advertising to see what promotional investments work best for your restaurant and target customers. There are agencies that specialize in this type of promotional advertising. For any promotional investments be sure that you account for the delay or lag in response rates so that you do not negatively impact cash flow. In other words, don’t invest in large promotions that require sizable up-front payments. You need to spread your promotional investments and payments over a longer period of time.

How to avoid costly delivery mistakes

TIP #10: Actively manage delivery drivers

Not every online ordering service offers delivery drivers so you need to be sure that you have contracted with a reputable delivery service so you can handle all orders. There are many different Restaurant Delivery Services (RDS) that specialize in food delivery and their availability varies. Be sure to interview these services to compare pricing. Will they accept tips from customers? Will they integrate with the online ordering services you are using? Do they guarantee a minimum delivery time?

Be sure to speak with other restaurant owners and operators about their experiences with RDS's before making decisions. You should establish a process, even basic to start, for collecting customer feedback to determine whether RDS's are performing as expected.

About Ordermark

Ordermark helps restaurants succeed at online ordering by sending all orders to a single printer in the kitchen. Visit us online at https://www.ordermark.com for more information.