The restaurant industry has had to change dramatically in order to stay ahead of the curve—especially over the past few years. Many restaurants have tapped into the rapidly growing delivery segment as a way to earn more revenue. As a restaurant owner or manager, you may have witnessed first-hand how profitable delivery can be for your business.
Read on for some practical tips and strategies for maximizing your profits through delivery services.
The benefits of offering delivery
From increased revenue to reaching new customers, the benefits of offering delivery services at your restaurant are abundant. We live in an age where convenience matters, and people appreciate being able to order food to their doorsteps when they crave it. “It goes without saying that delivery services offer an alternative revenue stream that has proven successful for many restaurants,” says Brian Deck, CEO of Smooth Commerce. “Not only can delivery help increase sales by reaching customers who are unable to visit your restaurant in person, but it also has the potential to reach an entirely new customer base.” While on premise dining is still a popular form of entertainment, your restaurant can save on labour costs by having delivery drivers pick up food from the restaurant and deliver it to customers, rather than hiring additional staff to handle delivery orders.
Tips for pricing delivery menu items to maximize profits
A lot of thought goes into menu development—after all, food is the reason people come to your restaurant—but what about your food pricing strategy? “Pricing alone is an important decision factor for customers when it comes to delivery, so it’s crucial to get those numbers right in order to increase your restaurant’s bottom line,” says Deck. Here are some things to consider when pricing your delivery menu items.
- First and foremost, consider the cost of ingredients. Make sure that the prices you charge for delivery menu items cover the cost as a bare minimum, as well as any additional costs associated with delivery, such as packaging and delivery fees.
- You’ll also want to consider any competition, so it’s a good idea to research prices of similar menu items offered by competitors to ensure that your prices are competitive. For example, what do the other restaurants in your vicinity charge for a burger and fries? Adjust your prices accordingly.
- Many restaurants adjust prices based on demand. Consider raising prices during peak hours and lowering prices during slower periods to help maximize delivery profits.
- You can also offer discounts and promotions to attract customers and increase sales. One way to do this is by bundling menu items together and offering them at a discounted price.
- Finally, it’s important to keep track of your costs and revenues along the way so you know what’s working as well as what might need improvement. Make adjustments as necessary to optimize your delivery menu pricing.
Strategies for improving delivery efficiency
When it comes to delivery, a consistent, quality food experience helps ensure customers become your delivery regulars. Customers also value efficiency, so, if you don’t deliver quickly (ideally, in 30 to 60 minutes), chances are your customers will take their business elsewhere. “It’s important to take a customer-centric approach and put yourself in their shoes,” says Deck. “When you take a close look at your delivery strategy and address the areas that could prevent customers from ordering, you have a better chance of increasing your delivery profits,” says Deck.
Here are some strategies for improving delivery efficiency and reducing costs.
- Set yourself up for success by leveraging the latest technology to streamline processes and reduce errors so your delivery efficiency is as high as possible. Zoom in on your delivery routes so you can plan the most efficient routes for your drivers, taking into account traffic, weather, and other factors that affect the bottom line.
- Be customer centric, and implement real-time tracking. This allows customers to track their orders and creates a greater sense of transparency, ultimately increasing customer satisfaction and trust.
- Continuously monitor and measure the performance of your delivery operations to identify areas for improvement and make adjustments as needed.
Ways to promote delivery services to customers
Restaurants that offer delivery are a dime a dozen, and customers have their pick of the crop. It may seem like a challenge to stand out in a crowded market, but these tips can help your business level up.
- Leverage social media, such as Instagram, to showcase your food delivery service. Instagram and its users thrive on being visual, so share engaging photos, videos and behind-the-scenes content to give customers a peek into your operation. Social media is a vehicle to engage customers and prospective customers by answering their questions in real time and promoting any special offers. With social media, you can also publish targeted content to reach potential customers who are likely to be interested in your delivery services. Once your social media presence is established, you can also collaborate with social media influencers to promote your business in a way that may feel more authentic than targeted advertising.
- Email marketing is a powerful tool for increasing overall brand awareness, and is a low-hanging fruit for promoting your delivery service if you already have an established email list. Sending the right messages (for example, emails about delivery discounts or promotions) can help establish greater brand loyalty and convert potential customers into profits.
Operating a restaurant is no walk in the park, and operating a delivery segment adds a whole other layer of complexity, but with these practical tips and strategies, you’ll be better armed to maximize delivery profits at your restaurant in the near future.