One of the most publicized challenges facing the restaurant industry as of late is the millions of dollars in fees operators have paid to third-party ordering platforms. And as restaurants reopen for on-premises dining, we’re likely to continue seeing steep fees from third-party reservation and ordering marketplaces. Losing revenue, and customer data, to third parties must be balanced with new customer acquisition and marketing strategies, but the operative word here is balance.
In this post we’ll examine why direct interactions are better for both restaurant operators and guests, and how restaurateurs can proactively drive more direct business.
According to Oracle’s report on dining trends in 2021, over 80% of consumers in the US and UK prefer to order directly from a restaurant (33% by phone, 32% online, 15% by app), compared to 18% of consumers who favor ordering from a third-party service. It’s safe to assume the same sentiment would hold true for reservations.
Third-party marketplaces can be effective marketing channels, exposing a restaurant to new customers. But when a diner books or orders repeatedly through third parties, operators continuously pay an acquisition cost -- even for repeat business. With a strategy in place to convert new guests from third-party marketplaces to direct booking and ordering channels, operators can gain more control over their business.
Third-party platforms reduce thin restaurant profit margins by taking commissions on orders and reservations. Case in point: Some third-party delivery apps charge a $350 activation fee to sign up for their platform, and then may take up to 30% for each delivery order they fulfill. To put that into perspective, a restaurant that does $100,000 in monthly delivery sales would pay $360,000 to the third-party annually.
Prioritizing a direct ordering and booking strategy can increase profit margins and build deeper relationships with guests. There are cost-effective solutions readily available for restaurants to manage online ordering for delivery and pick-up seamlessly.
In fact, SevenRooms’ ROI calculator can help you determine how much you could save by switching to a direct online ordering solution with low monthly fees. All you have to do is input details related to your existing delivery and pick up business, and we’ll calculate your estimated savings automatically.
For most of the hospitality industry’s history, personalization was executed through professional maître d’s with superhuman memories that stored endless details about the establishment’s best customers. From what regular guests liked to eat and where they liked to sit -- to important dates like birthdays and anniversaries. Tribal knowledge and black books have since been replaced by CRM systems and data augmentation to enhance the customer experience.
Third-party marketplaces store data under what’s commonly known as a ‘guest profile,’ but it’s difficult to extract, use, and share the data with other systems, or even with other restaurants within a portfolio. Owning your guest data is core to being able to deliver highly personalized services and experiences. Direct reservations and ordering platforms make this easy.
Leveraging third-party marketplaces as a new customer acquisition strategy, and then putting your time and energy into converting customers into direct patrons for future visits will help you control cost and increase customer engagement. Here are our top 5 tips for making it happen:
Step 1: Ensure all your ordering and booking links on your website and social media profiles go to your direct ordering and booking solution
Step 2: Add direct links to your Google listing. Google My Business listings display links to third-party platforms by default. Change your restaurant’s links to avoid sending potential direct customers to third-party websites.
Follow these instructions for changing the online ordering and reservations links to direct links in your Google My Business listing
Step 3: Communicate to your guests that you prefer them to order and book directly. Send an email to your entire guest database, post on social, share with guests who call or walk-in. Make it part of every interaction.
Step 4: Offer third-party customers incentives to convert to direct diners. If customers find your restaurant on third-party platforms, present them with compelling delivery and takeout offers directly from your restaurant and demonstrate the benefits. Create promotions that give customers a discount for ordering or booking directly in exchange for joining your loyalty program or giving you their contact information. Include these promotional inserts in delivery bags of third-party customers, or into check holders for dine-in guests.
Step 5: Maintain direct diner loyalty through omnichannel marketing powered by guest profiles. Once third-party guests have given you their contact information and consented to receive marketing messages from you, you can build guest profiles for them through SevenRooms and turn them into direct diners.
SevenRooms Guest Profile Example
Some guest engagement platforms, like SevenRooms, seamlessly integrate with cloud-based POS technology that is already in use at the restaurant. This means operators can track spend and customer order history in real-time, tying detailed POS information into guest profiles including total spend and item level spend. SevenRooms is pleased to partner with Oracle for a direct integration with MICROS Simphony.
When your CRM and POS are connected, guest profiles become gold for your service and marketing efforts. The profiles are a place for your restaurant to save information about guests through every touchpoint, like reservations, online orders, and dine-in experiences. The more you know about your guests, the better you’re able to anticipate their needs and target them with personalized service and marketing messages.
Here are some examples of how you can personalize the dine-in and off-premises experience when you have access to spend and order history data:
In addition to personalized service, access to guest data allows restaurants to target their marketing efforts and effectively demonstrate the benefits of booking direct:
For more information about SevenRooms and Oracle MICROS Simphony, visit our listing in the Oracle Cloud Marketplace.
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